Corporate Governance in Crisis: Why Activist Investors Are Ousting S&P 500 CEOs at Record Rates

You can practically sense a change in the way American boards are managed. This fall, if you walk by any corporate headquarters with glass walls, you’ll notice that the lights are still on late into the night.

Directors are in lengthy meetings inside, reviewing succession plans and performance charts while secretly worrying about the next hedge fund letter that might arrive in their inbox. The old tolerance, the willingness to give a CEO three or four years to “turn the ship,” seems to have vanished.

The numbers clearly convey the story. Twenty-seven CEOs of large multinational corporations were fired in 2024 as a result of activist campaigns—nearly three times as many as a few years prior. That already impressive record appears destined to drop once more. So far in 2025, 25 CEOs have resigned due to pressure, with S&P 500 companies accounting for about a fifth of these resignations. It’s difficult to disagree with Jim Rossman of Barclays’ description of last year as “almost a shareholder revolt,” given the number of campaigns that continued into the summer, which is typically a quiet time of year.

The calculus of patience has evolved. After roughly six quarters of poor shareholder returns, activists usually take action, and the pandemic justification has finally run out. CEOs are now directly questioned about why they overestimated e-commerce demand, why an acquisition stalled, and why margins continue to decline, instead of blaming supply chains or lockdowns.

The new battlefield is execution rather than strategy. Additionally, boards have begun taking action before the activists even arrive, possibly sensing the direction of the wind. The exits at Boeing, Nike, Stellantis, and Hertz occurred without a public campaign ever emerging; these days, the mere murmur of activist interest seems sufficient.

This has a demographic component that isn’t given enough attention. Over 11% of S&P 500 CEOs are between the ages of 65 and 69, up from about 7% in 2017. Boards delayed successions that are now arriving all at once by holding onto their leaders during COVID and again during the inflation shock. In the meantime, the group of executives in their late fifties, known as the natural successors, has become less numerous, accounting for only about 25% of S&P 500 CEOs today as opposed to over 36% in 2018. Boardrooms that ought to have been considering this five years ago are experiencing awkward bottlenecks as a result of what governance experts refer to as “bunching.”

It’s possible that, following years of leadership inertia, what we’re witnessing is more of a correction than a crisis. Investors appear to think that activism is asking difficult questions, reviewing strategy, and revitalizing leadership—things that boards should have done themselves. And the data supports that. Even among higher-performing companies, the Conference Board has observed that CEO turnover at large-cap firms increased in early 2025, indicating that boards are now taking proactive rather than reactive measures. According to 61% of CEOs and directors, succession planning will be more important for valuation in five years than it is now. That’s a subdued acknowledgement that the old way is dying.

Nevertheless, the trend is unsettling in some way. Timelines are getting shorter, pressure is genuine, and not every CEO who is fired deserves to be fired. The term “the rise of the CEO gig economy,” coined by Challenger, Gray, and Christmas, sounds clever until you consider that gig work typically entails insecurity, churn, and short horizons—not exactly the conditions under which great companies are built. It’s still unclear if activism is accelerating or sharpening American capitalism. One thing is for sure: the corner office, which used to be the most stable position in business, is now one of the most contentious.