IN-DEPTH: Counting the cost of a proxy fight
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Proxy contests have never been so costly, or so central to corporate strategy. Since 2021, battles at ExxonMobil, Disney and U.S. Steel have pushed budgets into the 10s of millions, with companies and activists alike assembling teams of bankers, lawyers and campaign specialists. The question that looms over every fight is simple: does money buy success? The answer, however, is more nuanced.
According to Diligent Market Intelligence (DMI) data, companies expected to spend about $4.6 million on average on proxy fights for the 2025 season while activists had budgeted around $1.8 million. Proxy solicitation fees alone now run to more than $600,000 for companies and close to $200,000 for challengers. “Tens of millions are not wasted if they keep a board intact or win access,” Tanner Kaufman of FTI Consulting told DMI. “You really get what you pay for.”
Recent years have shown that companies almost always spend more, sometimes significantly more. “The high-stakes proxy contest is going to have pretty significant implications for the board, strategy and future of a company,” Kaufman explained. “Companies are incentivized to put the strongest defense team in place, sometimes hiring two banks or two communications firms just to prepare for every outcome.”
In 2015, the average proxy cost for an activist was just over $636,000 with companies spending almost three times as much at $1.6 million. By 2024, this had climbed to $4.4 million for companies with a further 5% rise recorded in 2025. For activists, costs had reached $1.6 million on average in 2024 and climbed a further 12% this year.
Winning doesn't come cheap
The outcome of the campaign can also reflect the cost incurred. Campaigns that end with the activist securing at least one seat are almost always the most expensive for the dissident in pursuit of the board coming in at an average of nearly $5 million this year compared with barely a third of that sum when such efforts fail. Companies, however, pay around $5.6 million whether they win or lose. Even settlements, while cheaper, still average millions for both sides. DMI data show that proxy contests that concluded with a settlement carried an average $3.7 million cost for issuers in 2025, with activists recording an average cost of $700,000.
That financial threshold has concentrated the field. A cohort of investors including Trian Fund Management, Icahn, Elliott Management, Mantle Ridge and Ancora Advisors account for many of the key contests advanced since 2021 with the biggest fights the preserve of activists with both the capital and the appetite to spend heavily year after year.
Cost drivers
An expanded and more sophisticated battlefield has also had an impact on proxy fight inflation.
“Once upon a time, campaigns were run by the triumvirate—the company, the lawyer and PR,” said governance advisor Keith Gottfried. “Now we see a much wider array of consultants.”
Regulatory changes have also fueled the rise. The universal proxy card, introduced in 2022, turned each director election into a separate referendum. That has multiplied the number of lines of attack and, with them, the costs. Campaigns today rarely rely solely on lawyers and PR. They now involve private investigators, stock surveillance firms and business-intelligence specialists who dig into directors’ backgrounds and shareholder movements.
The most expensive contests of the year illustrate how the costs have ballooned. At U.S. Steel, Ancora’s campaign stretched to an estimated $36.5 million, inflated by a books-and-records demand, a live investor webinar featuring its proposed CEO candidate, and a Washington lobbying push that intersected with a CFIUS review and presidential orders.
Elliott’s campaign at Phillips 66 cost roughly $33 million and stood out for its digital media use, including a dedicated podcast and YouTube series, while proxy statements reveal that the company itself hired more than 60 staff through its proxy advisor to solicit shareholders, with Elliott bringing in 48 staff for shareholder outreach.
Other options
The market uncertainty that reshaped the 2025 proxy season saw some players consider other more cost-effective options in their push for board change with an increase in the use of “withhold” campaigns, in which activists urge shareholders to vote against directors without nominating rivals. “The nomination notice is incredibly time-consuming and expensive,” Gottfried said. “A withhold campaign is a way to get around that, and I think we’ll be seeing more of them.”
Another popular option is the “conditional notice of withdrawal” where activists file nominations but withdraw once companies make concessions. Nelson Peltz’s first campaign at Disney ended in early 2023 after management promised cost cuts. More recently, Engine Capital called off its board push at rideshare service Lyft after the company expanded its buyback program in May. As Gottfried put it, “It’s a quid pro quo—it’s a lot cheaper and quicker.”
As they prepare for another season, activists themselves recognize the growing financial strain. “The economics that are on the table are factored into the strategy that investors pursue, and activism can get expensive,” Kenneth Mantel, a partner at Olshan Frome Wolosky, told a recent DMI webinar. “The type of activism that we’re typically dealing with when it comes to our clients, they are economically motivated. And really, they should be. That’s the way they’re going to add value for all shareholders.”
