By John Biers,AP
NEW YORK–The bitter fight between U.S. chemical giant DuPont and billionaire activist investor Nelson Peltz will at last be resolved at a showdown at Wednesday’s annual meeting. Barring a last-minute settlement between the two rivals, DuPont shareholders are set to either deliver a vote of confidence for chief executive Ellen Kullman, 59, or throw their weight behind the 72-year-old Peltz and his company, Trian Fund Management. The Wednesday vote in the mid-Atlantic state of Delaware is expected to be close and follows months of scathing attacks on both sides over the future of 213-year-old DuPont.
Shareholder will elect 12 board members consisting either of DuPont nominees or four Trian picks, including Peltz himself. The company had previously offered to support a Trian nominee other than Peltz himself, but Trian said no. Trian has spent US$8 million researching and publicizing his case, while DuPont has shelled out US$15.4 million fighting back, according to Bloomberg News.
History suggests a last-minute deal is still possible. Only one third of 603 shareholder resolutions since 2009 have actually gone to vote, according to Factset. Most have been settled.
Kullman has positioned herself as a reformer at DuPont, arguing she has returned billions of dollars to shareholders, restructured the company’s holdings and positioned it to capitalize on its research advances in chemicals and agriculture technology.
Installing Trian on the board threatens progress under way and would reward short-term investors not interested in the company’s long-term health, the company argues. ��Don’t be misled by Trian �X DuPont stands by its performance,�� the company said Monday in a point-by-point rebuttal to televised comments by Peltz on cost-cutting and research spending.
��Mr. Peltz’s statement simply demonstrates Trian’s lack of understanding of DuPont’s business.�� Trian, which holds 2.7 percent of DuPont, has depicted the company as a chronic and wasteful underperformer that repeatedly misses its profit targets. It argues DuPont’s appreciation on Wall Street is due to the expectation that Peltz will shake things up. Peltz retreated from an initial call to split up the company, even as he has insisted major change is needed. An April 24 Trian presentation blasted ��crony�� compensation packages at the company. Both sides are aiming their arguments at large DuPont shareholders expected to decide the outcome, including Vanguard, State Street and BlackRock. The company has picked up support from shareholders that include the California Public Employees Retirement System (CalPERS), the Canadian Pension Plan Investment Board, Robinson Investment Group and Boston Trust & Investment Management Company. Trian has been endorsed by two prominent investment advisory firms, Glass Lewis and Institutional Shareholders Services, which backed election of Peltz and John Myers, another Trian nominee.
��This is not a broken company – but there is compelling evidence that the dissidents are onto something in their critique,�� ISS said.
��Operating efficiency is not what it should be, yet instead of addressing the core issues, the board and management, at least in their communications with shareholders, are more inclined to obfuscation than accountability.��