By David Benoit
A second proxy adviser has delivered a vote of confidence in
Nelson Peltz in his campaign to get on the board of DuPont Co.
Glass Lewis & Co. late Wednesday said shareholders should
elect the chief executive of activist investor Trian Fund
Management LP to DuPont's board in May, citing the chemical
company's earnings disappointments in recent years and its slowing
revenue growth.
"We believe Trian has identified legitimate concerns at DuPont,
primarily related to operational execution and management
accountability, " Glass Lewis wrote. "We believe Trian has
presented a compelling argument that Mr. Peltz is capable of
working constructively with the incumbent nominees during DuPont's
ongoing transformation process in order to drive greater returns
for shareholders."
One reason Glass Lewis said Mr. Peltz would add to the board was
it felt he would be a significant holder of the stock, helping
offset some investors' concerns that DuPont Chairman and Chief
Executive Ellen Kullman recently has cut her position.
Glass Lewis did also applaud DuPont management for creating
strong shareholder returns and for the steps it has taken to
transform the business.
Mr. Peltz is one of four Trian nominees to DuPont's 12-member
board. Saying that election of multiple dissident nominees is
"unwarranted," Glass Lewis didn't go quite as far as rival
Institutional Investor Services Inc., which earlier this week
backed Mr. Peltz and John Myers, another Trian nominee.
Mr. Peltz's role has been seen as the sticking point in the
proxy fight, which is one of the largest ever. DuPont has said it
would be open to a Trian nominee as long as it wasn't a Trian
principal, and Trian has said it wouldn't accept anything but a
Trian principal on board.
Neither DuPont nor Trian immediately responded to requests for
comment late Wednesday.
The proxy advisers, which recommend how to vote to large
shareholders, are seen as important voices and barometers in
shareholder campaigns, though companies sometimes have overcome
negative recommendations from them.
DuPont and Trian have been engaged in a campaign for shareholder
votes and the future of the chemicals company.
The shareholders are scheduled to vote May 13 at the annual
meeting in Wilmington, Del., though a settlement before that time
is a possibility.
Trian says the company's performance has lagged and that the
best solution would be to break it up, though the activist
maintains it would be open to other solutions if it gets on the
board.
DuPont says its stock performance has beaten the broader market,
that its board is already taking significant steps to change, and
that Mr. Peltz, if elected, would be focused on a breakup that
DuPont thinks is a bad idea.
Write to David Benoit at david.benoit@wsj.com
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