Activist William Ackman Loses Bid for ADP Board Seats--Update
07 Novembro 2017 - 12:12PM
Dow Jones News
By David Benoit
ROSELAND, N.J. -- Activist investor William Ackman lost his bid
for three seats on the board of Automatic Data Processing Inc.
after a three-month fight over the future of the human-resources
company that turned personal and antagonistic.
ADP investors on Tuesday re-elected the entire 10-person board
at the annual meeting at its Roseland, N.J., headquarters,
according to people familiar with the matter. The shareholders
rejected Mr. Ackman and his two other nominees after the activist
had said the company had fallen behind technology-heavy startups
and needed to improve its margins.
ADP had argued it was already improving technology and was on a
path to improve its margins.
The stock had performed well compared with the S&P 500, and
some had questioned why Mr. Ackman and his Pershing Square Capital
Management LP had sought to target it in the first place.
Several investors, including one in the top 10, had told The
Wall Street Journal that they believed ADP needed to improve but
also trusted management and Chief Executive Carlos Rodriguez to
execute.
Big investors Vanguard Group and State Street Global Advisors
voted in favor of ADP, while BlackRock Inc. voted its shares in
favor of Mr. Ackman, according to people familiar with the
matter.
For Mr. Ackman, Tuesday's loss could raise new questions about
his ability to win support during a period of turmoil for his fund,
which has struggled and suffered a $4 billion loss after a bad bet
on Valeant Pharmaceuticals International Inc. Still, activist
fights are typically decided based on the issue on the table, not
the investor's recent performance.
Mr. Ackman has argued in recent days that he already had pushed
ADP to promise to improve operations and margins. Mr. Ackman has
said he intends to stay in the stock and believes the proxy fight,
win or lose, would create a path for ADP to improve in the coming
year or risk putting him on the board in 2018. He said he would be
judged as an investor on the stock performance, not whether he was
elected or not.
Mr. Rodriguez had attacked Mr. Ackman from the outset of the
fight, at one point even calling him a "spoiled brat" on
television, and he sought to discredit Mr. Ackman because of his
performance. ADP said it would complain to the Securities and
Exchange Commission over some of Mr. Ackman's accusations.
In turn, the activist had accused Mr. Rodriguez of misstating
private conversations about his requests and misleading investors
about what was happening.
Institutional Shareholder Services Inc., the biggest proxy
adviser, had suggested Mr. Ackman made valid points and supported
his election to the board. But instead of suggesting investors vote
directly for Mr. Ackman, ISS instead called for them to withhold
their votes from a sitting ADP director, opening a spot for Mr.
Ackman. ISS said electing Mr. Ackman's three nominees would
introduce too much risk, so it chose that unusual tactic.
Because most investors can only vote on one ballot or the other,
that opinion was a blow to Mr. Ackman because following ISS's
recommendation would lead investors to cast their ballots on
management's card. Mr. Ackman's election would only happen if more
investors turned in affirmative vote for him than those who
withheld.
Write to David Benoit at david.benoit@wsj.com
(END) Dow Jones Newswires
November 07, 2017 08:57 ET (13:57 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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