Proxy season is under way, stirring the usual boardroom battles. One of the more anticipated struggles will unfold on May 6 at Sotheby’s annual shareholder meeting in New York, where hedge fund activist Daniel Loeb will push a slate of three director nominees — one of whom is himself. Investors in the 270-year-old auction house will wrestle with the issues that often accompany aggressive activist campaigns. Has Loeb, who is loosely aligned with another activist, Richard (Mick) McGuire, already pushed Sotheby’s far enough? Will the pair try to replace William Ruprecht, Sotheby’s CEO for 14 years? Will Loeb’s presence on Sotheby’s board produce destructive acrimony, or will he instigate enough change to boost the share price, then cash out and stroll away, as he did with Yahoo last year after winning three board seats and helping to install Marissa Mayer as CEO?

Activist investors are ubiquitous these days. But the Sotheby’s campaign run by Loeb, CEO of $14 billion-in-assets, New York–based Third Point, and McGuire, who heads $2.7 billion Marcato Capital Management in San Francisco, is activism at its most hyper. Sotheby’s is what activist investors seem to like best: a company that is not severely troubled but lacks a plan for putting assets to more-productive use — and boasts a pile of cash that can be channeled into dividends and share buybacks.

Corporate cash hoards may be the biggest reason activism has thrived. But what’s become obvious is that a dividend and buyback strategy won’t suffice forever, particularly given the powerful run-up in stocks. Companies will have to invest their cash in R&D, new products, geographic expansion or M&A to spur growth. Those demands, in turn, will put pressure on activists to engage boards and managers in more-complex, longer-term strategies.

There are signs that the climate is already changing. M&A and capital spending are up in the first quarter, and the stock market has grown more discriminating. Activism has been so successful as a strategy that new funds have launched to join the fun. Relatively easy targets like Sotheby’s are more rare than they were, and they tend to attract crowds, driving down returns over time. That overcrowding — a familiar dynamic in finance — has pushed activists to look further afield, to companies that require tough operational turnarounds or to larger businesses operating on much brighter stages.