Automatic Data Processing Inc. board members have rejected activist investor William Ackman's bid for a board seat and those of two other people nominated by his firm, Pershing Square Capital Management LP.
Pershing Square, which owns an 8% stake in ADP, earlier this month tapped its founder Mr. Ackman, Veronica Hagen, the former chief executive of materials company Polymer Group Inc. and V. Paul Unruh, a former Bechtel Group executive, for seats on ADP's board. But ADP board members voted unanimously to reject all of them, announcing Monday morning that its nominating committee "determined that none of the Pershing Square nominees bring additive skills or experience."
The board instead plans to nominate its 10 existing directors for re-election.
Mr. Ackman has repeatedly clashed with ADP Chief Executive Carlos Rodriguez, whom he would like to see replaced. Mr. Ackman and Pershing Square didn't immediately respond to a request for comment.
Mr. Rodriguez earlier this month called Mr. Ackman a "spoiled brat" during an appearance on CNBC.
"Adding Mr. Ackman's nominees would not be an improvement," said John Jones, chairman of ADP's board. "Unlike Mr. Ackman's nominees, ADP's directors have a deep understanding and appreciation of the current state of ADP's business and its clients."
Mr. Ackman, who is known for aggressive tactics but typically gains board seats through negotiations rather than proxy fights, said last week that ADP's stock value could more than double by 2022. He thinks the company needs to build its own capabilities rather than buying them to prevent startups from further encroaching on its market share.
The board's rejection of Mr. Ackman's bid doesn't come as a surprise. Shortly after the nominations were announced, ADP took the unusual step of disclosing demands Mr. Ackman had made privately and said in a statement it believes it already has a "strong and independent board."
After Mr. Ackman presented his ideas for ADP last week on an hourslong conference call, the company issued another stinging statement: "We strongly disagree with many of the assertions made by Mr. Ackman in today's presentation, which betrays a fundamental lack of understanding of the current state of ADP's business and strategy."
(END) Dow Jones Newswires
August 21, 2017 07:34 ET (11:34 GMT)