Influential proxy advisory firm Institutional Shareholders Services is expected to issue its much-anticipated report next week on the battle between activist investor Nelson Peltz and DuPont (NYSE:DD), after meetings with both sides in the long-simmering feud over the direction of the chemical giant, the FOX Business Network has learned.
The report by the advisory firm, known widely on Wall Street by its acronym ISS, could influence a shareholder vote next month on a proposal by Peltz that his investment fund Trian Fund Management take as many as four DuPont board seats. Trian, which owns 2.7% of DuPont, also wants major structural changes at DuPont including a breakup of the $65 billion conglomerate -- moves that current management under CEO Ellen Kullman has so far resisted.
ISS officials were to meet with DuPont executives Thursday after a meeting with Peltz’s team on Wednesday, according to people with direct knowledge of the matter. ISS typically takes a week to issue its recommendation after meeting with both sides of such corporate disputes. People close to process are expecting the ISS report next week.
A spokesman for ISS didn’t return a call for comment; a spokesman for DuPont declined comment; and a spokeswoman for Trian had no immediate comment.
In a proxy battle, shareholders like Peltz attempt to persuade other shareholders to agree with a slate of proposals to change the direction of the company and sometimes its management. Firms like ISS play a key role in refereeing such fights since they are considered independent in their analysis and recommendations.
Peltz began his proxy campaign against DuPont and Kullman in January after months of negotiations between the two sides. Kullman has rebuffed Peltz’s proposals including one that would make him a board member, giving him a powerful perch to exert pressure on other board members for his grander plans to break up DuPont and its myriad of businesses. Kullman has said such moves would be costly to the 212-year-old company; Peltz says they would create greater profits and drive shares higher.
Proxy fights are often acrimonious, and the Trian-DuPont battle has taken on a particularly nasty tone playing out on business television and in editorials that questioned whether activists like Trian have been good for shareholders. Yale management professor Jeffrey Sonnenfeld has sided with Kullman by attacking Peltz’s long-term record; Sonnenfeld maintains that that Trian’s returns have underperformed shares of many of its target companies including DuPont.
Peltz has shot back saying Sonnenfeld misrepresented his fund’s track record and investment style, which includes working with current management to enact shareholder-friendly changes.