Activist William Ackman Loses Bid for ADP Board Seats
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 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.
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.
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(END) Dow Jones Newswires
November 07, 2017 08:43 ET (13:43 GMT)