ADP Rejects Ackman's Nominees to Board -- WSJ
August 22 2017 - 3:02AM
Dow Jones News
By Cara Lombardo
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 22, 2017).
Automatic Data Processing Inc. board members have rejected
activist investor William Ackman's bid for a board seat and those
of two other people nominated by his firm, Pershing Square Capital
Management LP.
ADP's board instead plans to nominate its 10 existing directors
for re-election, leaving Mr. Ackman to plead his case for board
seats directly to investors.
Pershing Square, which owns an 8% stake in ADP, earlier this
month tapped its founder, Mr. Ackman, for a seat on ADP's board,
along with Veronica Hagen, the former chief executive of materials
company Polymer Group Inc., and V. Paul Unruh, a former Bechtel
Group executive.
But ADP board members voted unanimously to reject all of them,
announcing Monday morning that its nominating committee "determined
that none of the Pershing Square nominees bring additive skills or
experience."
Mr. Ackman fired back in a statement Monday afternoon. "The fact
that the board believes that the company's largest owner with an
8.3% stake does not deserve even one board seat speaks to their
insularity and lack of shareholder perspective," he said. "By
contrast, the cumulative ownership of the board including the
company's CEO is less than 0.09% of shares outstanding."
Mr. Ackman has repeatedly clashed with ADP Chief Executive
Carlos Rodriguez, whom he would like to see replaced.
Mr. Rodriguez earlier this month called Mr. Ackman a "spoiled
brat" during an appearance on CNBC.
"Adding Mr. Ackman's nominees would not be an improvement," said
John Jones, chairman of ADP's board. "Unlike Mr. Ackman's nominees,
ADP's directors have a deep understanding and appreciation of the
current state of ADP's business and its clients."
Mr. Ackman, who is known for aggressive tactics but typically
gains board seats through negotiations rather than proxy fights,
said last week that ADP's stock value could more than double by
2022. He thinks the company needs to build its own capabilities
rather than buying them to prevent startups from further
encroaching on its market share.
The board's rejection of Mr. Ackman's bid doesn't come as a
surprise. Shortly after the nominations were announced, ADP took
the unusual step of disclosing demands Mr. Ackman had made
privately and said in a statement it believes it already has a
"strong and independent board."
After Mr. Ackman presented his ideas for ADP last week on a
conference call lasting several hours, the company issued another
stinging statement. "We strongly disagree with many of the
assertions made by Mr. Ackman in today's presentation, which
betrays a fundamental lack of understanding of the current state of
ADP's business and strategy."
(END) Dow Jones Newswires
August 22, 2017 02:47 ET (06:47 GMT)
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