Nelson Peltz has failed in his bid to take control of the DuPont board. The company’s shareholders elected all 12 of its board nominees and none of his in a major blow to the activist investor. This could also be construed as a setback for activist investors in general and a victory for the old guard and old school management and investors.
Vanguard Group, BlackRock Inc. and State Street Corp, the corporation’s three largest shareholders, were instrumental in the re-election of DuPont’s entire current board and in defeating Peltz. Bank of New York Mellon Corp., another stockholder, also voted for DuPont.
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But Peltz’s failure has hurt the company’s value. Its stock fell 6.8% on Wednesday, to $69.33. He reminded Bloomberg News that another elections for the DuPont board is only six months away saying, “We will take a watchful eye. It’s a long road, and we’ll see where the company goes from here.”
His Trian Fund Management had pushed for a breakup of the company. It released a statement saying, “Trian’s involvement in DuPont over the past two years has created substantial value for all stockholders. We are proud of the quality of our analysis and the role we have played as a positive change agent at DuPont.”
The firm also issued a threat as it looks ahead to the next vote saying, “DuPont stockholders will be less tolerant of continued missed earnings guidance, extraordinary charges, value-destructive acquisitions and divestitures, executive compensation that is not aligned with performance, and operating metrics such as revenue growth and margins that fail to meet DuPont’s own targets.”
DuPont CEO Ellen J. Kullman stated, “We are pleased with the outcome of the vote and especially appreciate the strong expressions of support from so many of our shareholders for our strategic transformation and the continued execution of our plan.”