E.I. du Pont de Nemours & Co. on Wednesday prevailed in shareholder voting, winning a proxy contest showdown against activist investor Trian Fund Management and pitting CalPERS and CalSTRS and other pension funds on opposite sides of a corporate governance dispute.
Shareholders elected all 12 of DuPont's nominees to the company's board of directors at the annual meeting, according to a DuPont news release. Voting tallies were not available.
The $305.3 billion California Public Employees' Retirement System, Sacramento, backed DuPont, voting its 6.15 million shares, representing 0.7% of the company's shares, in support of DuPont's board nominees.
The $191.2 billion California State Teachers' Retirement System, West Sacramento, voted its 3.6 million shares in support of Trian Fund Management's four board candidates, including Nelson Peltz, Trian founding partner and CEO. CalSTRS also voted for eight DuPont nominees endorsed by Trian to complete the 12-member board.
CalSTRS also invested $300 million in Trian's activist hedge fund in April 2011.
The C$239 billion ($196.5 billion) Canada Pension Plan Investment Board, Toronto, voted for all 12 DuPont nominees.
The $185.1 billion Florida State Board of Administration, Tallahassee, voted in favor of two Trian nominees, Nelson Peltz and John H. Myers, while withholding votes on the two other Trian nominees, Arthur B. Winkleblack and Robert J. Zatta. The FSBA also voted in favor of eight DuPont nominees recommended by Trian.
The C$154.4 billion Ontario Teachers' Pension Plan, Toronto, voted in favor of all four Trian nominees and the eight DuPont nominees endorsed by Trian.
Proxy-voting advisory firms split their recommendations.
Institutional Shareholder Services recommended clients vote in favor of Messrs. Peltz and Myers and withhold votes on Messrs. Winkleblack and Zatta, while voting for eight DuPont nominees.
Glass Lewis recommended clients vote in favor of Mr. Peltz and withhold votes on the other three Trian nominees.
Anne Sheehan, CalSTRS director of corporate governance, said in a statement, “While CalSTRS is disappointed Trian did not prevail in their bid to seat a slate of nominees to the DuPont board of directors, we are encouraged by the changes Trian Partners have driven at the company. DuPont has acted on many of Trian's early recommendations and, as partners with Trian, we are prepared to work from the outside toward long-term growth in collaboration with the board.
“The significant number of shareholders who supported Trian clearly reinforces their view. We expect the current board to continue to work diligently on the turnaround plan and to hold management accountable to their stated goals.”
Subodh Mishra, ISS spokesman, said in a statement, “ISS has always been in the business of making voting recommendations, with our clients as institutional investors making the final vote decision. We stand by our analysis while respecting the decision of DuPont shareholders.”
Trian, which holds 24.6 million DuPont shares, or 2.7% of the company's stock, issued a statement following the proxy-voting results, saying, “It appears that the Trian nominees were not elected to the DuPont Board. … The vote was close.”
“Trian's involvement in DuPont over the past two years has created substantial value for all stockholders,” the Trian statement said. “We don't believe … actions (taken by DuPont to improve corporate value) would have happened without our involvement.”
Ellen Kullman, DuPont's chairwoman and CEO, whose re-election to the board was supported by the pension funds and proxy-voting advisory firms and Trian, said in a statement, “Our board and management value the open dialogue and input we have received from our shareholders, and we look forward to continuing to execute our strategic plan to make DuPont a higher growth, higher value company.”
