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This article first appeared on Diligent Market Intelligence's Activism newswire. To register for a demonstration and trial of the product, click here.
CEO tenure has come under greater scrutiny in recent years as turnover accelerates across corporate America, with activist campaigns increasingly acting as stress tests for leadership.
According to Diligent Market Intelligence (DMI) Governance and Activism data, 6% of the 823 CEOs who departed U.S.-based companies in 2025 left within 12 months of an activist demand, up from nearly 3% in 2023.
John Grau, CEO of proxy firm InvestorCom, attributes this pattern to mounting pressure on CEOs during and in the aftermath of activist campaigns – both from investors and inside the boardroom. “When CEOs transition out of their role around an activist campaign, clearly these are situations where the CEO was pressured to step down, perhaps by board members or due to pressures around the campaign.”
Explicitly calling for a chief executive’s removal remains a high bar for activists due to the standard of proof required. “Targeting the CEO, that's transformative and disruptive to the company. You better explain why that is the necessary answer,” Ele Klein, global head of shareholder activism at McDermott Will & Schulte, told DMI.
However, in some cases where there is a perceived major case for change and widespread support for it, activists have been emboldened to escalate. At Air Products and Chemicals, Mantle Ridge succeeded in its bid to unseat the then-CEO and Chair Seifollah Ghasemi as well as install three of the four candidates on its slate. The dissident had rallied other investors to support its case for change with concerns the company had substantially trailed its industrial gas peers and the overall market for many years due to the board’s failure to affect a transition from Ghasemi, who had served in the role for a decade.
Harley-Davidson CEO and Chair Jochen Zeitz was also at the center of a withhold campaign by H Partners last year. "While we hoped to work constructively and in a private manner to resolve these issues with the board, these long-tenured directors made that impossible," argued H Partners as it rolled out its campaign in April. The motorcycle manufacturer won the fight after Zeitz, who had served on the board for 20 years, said he would retire by the end of the year.
Still, advisors note that shareholders typically expect boards - not activists - to determine when a CEO should be replaced.
According to Lauren Gojkovich, founder and managing partner of LDG Advisory, it's rare for an activist to go after the CEO. "Shareholders expect that the board is equipped to make that decision and directors are charged with being shareholder representatives in terms of oversight of strategy and that’s why we see so much of a focus on director refreshment and not CEO refreshment,” Gojkovich told DMI.
“A lot of investors believe that the number one job of the board is to hire and fire the CEO, and so, critiques of the CEO are an inherent critique of the board and its failure to manage the CEO,” she added.
In many cases, pressure on the CEO is indirect - embedded within broader critiques of performance, capital allocation or operational execution.
Such external intervention can widen the scope of boardroom debate, bringing simmering concerns about strategy and leadership to the surface.
“When an activist does get involved, it can open the Overton window in terms of what is allowed to be debated in the boardroom,” Gojkovich said.
“All of a sudden, the boardroom starts asking the uncomfortable questions that directors might have been thinking about but didn't feel free to express in the boardroom, one of those questions can be - are you confident in the CEO?”
Recent campaigns illustrate how that dynamic can unfold. Last July, consumer health group Kenvue named an interim CEO and opened a “comprehensive review of strategic alternatives” as it faced pressure from a number of activists including Starboard Value and Third Point Partners. Match Group also installed a new chief executive months after confronting activist scrutiny of its growth strategy.
Opposition to M&A, especially at the acquiring company, can also lead to unwelcome exposure for a CEO and amount to an investor vote of no confidence in a CEO's strategic vision.
“You are saying you don't trust the CEO and you have to imagine you've essentially derailed that CEO's strategic plan by voting down that deal,” Shaun Mathew, who leads the shareholder activism and hostile takeover defense practice at Kirkland & Ellis, told DMI in a recent webinar.
Following a January special meeting vote, STAAR Surgical failed to garner sufficient shareholder support for its merger agreement with Swiss eyecare giant Alcon after a months-long campaign by top investor Broadwood Partners and others. Just one week later, STAAR revamped its board in a deal with Broadwood with both the CEO and chair stepping down.
With DMI data showing M&A-driven activism at a five-year high, that pressure may intensify.
"We've seen a lot of CEO changes under activist campaigns, and I would expect that trend to continue, especially when M&A is a barometer of a CEO's success. If you can't sell a company because it's not performing well or lacks strategic differentiation, that's also a referendum on the CEO and may lead to a change there as well," said Sagar Gupta, portfolio manager at Anson Funds.
The forces testing CEOs may intensify in the year ahead as regulatory shifts and new tech disruption create flashpoints for shareholder scrutiny.
Observers told DMI that changes to the regulatory landscape such as the Securities and Exchange Commission’s (SEC) pause on the no-action process could push some investors to "vote no" campaigns instead.
“The lower number of shareholder proposals is going to force more 'vote no' campaigns and an increase in smaller activist campaigns and that's going to put more pressure on CEOs and companies in general,” Grau told DMI.
Falling behind on AI integration could also spell the end for some CEOs in what has become a very challenging time to run an organization, according to Glenn Welling, founder and CIO of Engaged Capital. "If you fall behind in the AI arms race within your industry and it has the potential to have a material impact on either revenue growth or profitability, you're probably not going to make it.”
As Gojkovich noted, companies that move quickly to harness the new technology “are going to soar" while those that lag "are just not going to be able to keep pace.”
