Key Points
- The 2025 proxy season has seen a marked rise in “vote-no” or withhold campaigns against directors.
- These campaigns, which can be launched any time, without warning, can result in high withhold votes against directors, even when the activist only issues a single press release, creating significant pressure on boards to voluntarily effect board, management or strategic change in response.
- Companies that regularly assess director skill sets, engage early and often with key investors, communicate their strategy and explain why each director has been selected to serve, will be better positioned to confront these potential activist attacks.
Withhold campaigns are not new. However, according to Diligent Market Intelligence, 33 distinct activist withhold campaigns took place in the 12 months ended June 30, 2025, up from 23 in the same period of 2023–24 and 24 campaigns over the same span in 2022–23.
In a “vote-no,” or withhold, campaign, an activist encourages other shareholders to vote against the election of one or more directors at a shareholders’ annual meeting. The strategy is particularly effective at companies that combine (a) a requirement that each director in an uncontested vote win a majority of votes cast with (b) a director resignation policy. In those cases, any incumbent director who falls short of a majority must promptly tender a conditional resignation, leaving the remaining board members to decide whether to accept the resignation (typically upon recommendation of the board’s nominating and governance committee).
While the primary objective for a vote-no campaign is to force the resignation of one or more directors from the board for failure to achieve a majority of the votes cast, a secondary goal is often to demonstrate strong shareholder dissatisfaction with the company’s performance if enough votes are withheld. Recent notable withhold campaigns illustrate how even a “loss” can be a win in catalyzing change at a company to thwart a full proxy fight in the following year.
What’s Driving the Increase in Withhold Campaigns
Three principal forces seem to be driving this trend, with cost chief among them.
According to Deal Point Data, through the first half of 2025, the eight proxy contests that went to a shareholder vote in the U.S. cost activists a combined $45.9 million, while the target companies spent $69.1 million defending against such efforts.1
A withhold campaign can significantly reduce these expenditures by eliminating the need for an activist to identify, vet and promote alternate director nominees, while still exerting pressure on target boards if the activist is able to achieve high withhold votes against incumbent directors.
Timing is another factor. Activists who miss advance-notice deadlines, or who identify a new issue after the nomination window closes, can still coalesce investor dissatisfaction around a vote-no narrative.
Finally, persistent tariff uncertainty and market volatility in 2025 may have made some fund managers reluctant to bankroll full proxy fights, even as they remain convinced that board refreshment is warranted at the companies they have targeted.
The success of some recent “Vote No” campaigns underscores the importance of a company articulating, well before its proxy statement is filed, how each director’s expertise aligns with the company’s strategy.
Variations on ‘Vote No’
Tactically, activists have three principal approaches to withhold campaigns at their disposal.
A single letter or press release. The most minimalist and cost-effective campaign is to issue a single communication announcing the activist’s intention to vote against specified directors and explaining why. Because the Securities and Exchange Commission’s (SEC) proxy rules do not consider the issuance of a public statement that merely communicates a shareholder’s voting intent and the reasons for it as a “solicitation,” this approach entails virtually no regulatory hurdles and can be undertaken at minimal cost.
Historically, this type of minimalist withhold campaign has not had great success. However, the recent withhold campaign launched by Impactive Capital at WEX Inc. shows that more established activists who are able to get their message amplified by the media can have an outsized effect on election results with minimal effort.
Impactive, a 7% shareholder of WEX, issued a single press release just three weeks before the company’s 2025 annual meeting, announcing its plan to vote against three long-tenured directors because it claimed that its “value enhancing ideas” (e.g., to split up the company’s three business segments) and request for a board seat had been dismissed. Notwithstanding the absence of a formal solicitation, all three of the directors targeted saw their support from shareholders decline by more than 30 percentage points, including WEX’s CEO and chair, who received just 64.3% of “for” votes cast.
While none of these directors resigned as a result of the election, Impactive argued in a subsequent press release that the significant withhold votes demonstrated a “crisis of confidence” in the board. Impactive also disclosed that it intends “to nominate at least four directors for election at next year’s annual meeting, barring a significant reversal of WEX’s underperformance or approach to engagement in the coming months,” creating significant pressure on the company for the upcoming year to improved its performance or rationalize its strategy with the larger shareholder base.
Multiple letters or press releases. An activist can also launch a withhold campaign through an exempt solicitation, which involves the issuance of several public letters or press releases urging shareholders to withhold support from incumbent directors standing for election, yet stops short of furnishing them with a proxy card or means to vote.
Under the SEC’s proxy rules, if the activist’s stake in the target company exceeds $5 million, the activist must file most written communications with the commission, which can help to provide a larger platform for the activist’s campaign, but the activist does not need to file its own proxy statement before soliciting votes.
Generally, these types of exempt solicitations have had mixed results, as the activist must rely solely on the company’s proxy card to obtain support. But in one successful effort, Ancora Holdings Group pursued an exempt solicitation at Forward Air Corp. in May 2025, contending that directors who approved the 2023 acquisition of Omni Logistics should be removed. Successive filings, amplified by supportive recommendations from proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis, culminated in the board chair’s resignation after he failed to receive a majority of “for” votes cast and the voluntary departure of two additional directors after they received high withhold votes, even though they technically survived the vote.
Full solicitation, but without alternative nominees. The most aggressive path, and generally the most effective type of withhold campaign, is a full solicitation. Through this method, the activist disseminates its own proxy statement and card, replicating many elements of a contested election but urging “withhold” or “against” votes rather than urging shareholders to vote “for” alternative nominees.
For example, H Partners Management, a beneficial owner of approximately 9.3% of Harley-Davidson, Inc., solicited proxies from shareholders on H Partners’ blue proxy card to “withhold” their votes against three directors with 17-, 18- and 29-year tenures. In advance of the 2025 annual meeting, Egan Jones and Glass Lewis reportedly sided with H Partners, while ISS recommended that shareholders vote in favor of all of Harley-Davidson’s nine nominees standing for re-election.
All incumbent directors ultimately received a majority of votes cast. However, H Partners declared a “partial victory,” noting that, as a result of its campaign, Harley-Davidson had reportedly committed to several other shareholders that three directors would resign by next year’s annual meeting, the board would appoint a new, external CEO and the outgoing CEO would not serve in an executive chair role.
H Partners incurred approximately $1.5 million in solicitation costs through its campaign at Harley-Davidson and, while ultimately unsuccessful at the ballot box in the abstract, within three months of the annual meeting, Harley-Davidson announced the appointments of a new, external CEO and chair of the board.
What Companies Can Do To Prepare for ‘Vote No’ Campaigns
For boards, the use of withhold campaigns by activists who are achieving meaningful results with less expense underscores the importance of articulating, well before a company’s proxy statement is filed, how each director’s expertise aligns with, and advances, the company’s strategy.
- Director biographies should emphasize expertise germane to the company’s industry and strategic direction, and proxy materials — particularly director matrices — should explicitly connect each director’s experience to concrete value drivers.
- Continuous, proactive engagement with top investors remains essential regarding the company’s strategy and board composition.
- Where appropriate, boards may wish to preview succession planning and board refreshment initiatives to demonstrate responsiveness to shareholders.
In short, the 2025 proxy season shows that boards need to remain vigilant even after a nomination deadline passes, as vote-no campaigns are likely to continue to remain an important and cost-effective lever in the activist tool kit. Boards that anticipate the underlying critiques, and address them proactively and transparently, will be best positioned to preserve investor confidence and avoid being caught off guard next proxy season.
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1 Data is for campaigns targeting U.S.-domiciled companies with market capitalizations greater than $500 million.
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