ADP CFO Jan Siegmund Plans to Leave Company -- Update
12 Junho 2018 - 7:46PM
Dow Jones News
By Cara Lombardo and Maria Armental
Automatic Data Processing Inc.'s finance chief plans to resign
from his post, the payroll-processing company said Tuesday, a
departure that comes as the firm faces scrutiny from a trio of
activist investors.
Jan Siegmund will remain in the role while ADP looks for a
replacement, Chief Executive Carlos Rodriguez said during a meeting
with investors Tuesday. He said Mr. Siegmund had been planning to
leave for a while, but the company had "successfully convinced him
for some period of time now to stick around, because of all the
exciting things we have going on."
Mr. Siegmund joined ADP in 1999 and was tapped as CFO in
November 2012.
ADP executives on Tuesday outlined plans to increase margins and
accelerate the rollout of their newest platforms. The company,
which offers human-resources software that handles such tasks as
payroll processing and timekeeping, said it expects to reach its
target for adjusted earnings before interest and tax margin of
between 21% and 22% a year ahead of schedule.
Shares closed up 4% at $139.30 Tuesday.
As it tries to jump-start growth, ADP has been facing increased
pressure from activist investors including William Ackman.
Last year, the company defeated Mr. Ackman in a heated proxy
fight. Mr. Ackman had accused ADP of falling behind
technology-heavy startups, and said its margins were "vastly below
their potential." At the heart of ADP's problems, he charged, was
an "insular, bureaucratic and staid corporate culture."
Since then, Mr. Ackman has said he is encouraged by ADP's recent
performance, including accelerated bookings and improved business
retention. His Pershing Square Capital Management LP, which owns
about 7.2% of ADP, including derivatives, hasn't called for Mr.
Siegmund's departure.
Two other activist hedge funds, D.E. Shaw Group and Sachem Head
Capital Management, have also built stakes in the firm. The Wall
Street Journal reported in May that the investors hadn't decided
whether to push for changes at the company, citing people familiar
with the matter, but had separately met with ADP management.
Research firm Management CV last year criticized Mr. Ackman's
proxy fight as misguided but noted it raised some valid points. It
said ADP should change its CFO.
Mr. Siegmund, the research firm wrote, "is an ADP lifer (like
CEO Rodriguez) and is unlikely to be able to exact the hard cost
cuts and restructuring steps that would materially shrink ADP's
cost base and improve operating margins."
Renny Ponvert, Management CV's research director, said Tuesday
in an interview that Mr. Rodriguez needs a counterbalance to help
him run the company, rather than someone who "just works for him as
a clerical CFO."
ADP declined to comment on Management CV's criticism, but the
company has repeatedly defended its executives.
--Bowdeya Tweh contributed to this article.
Write to Cara Lombardo at cara.lombardo@wsj.com and Maria
Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
June 12, 2018 18:31 ET (22:31 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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