The DuPont Proxy War Gets Juicy

Adventure… A war of words… Fighting between top-level movers and shakers… Ugly accusations!

No, I’m not talking about a soap opera miniseries. This a real-world drama playing out right now at DuPont (DD).

It’s a battle between the current DuPont Board of Directors and Trian Partners, a fund management team out of New York with a vested interest in the chemical company.

Trian is trying to convince shareholders to oust the current DuPont board, and it’s willing to play dirty to get what it wants.

The final, shocking episode will air on May 13. That’s when the chemical conglomerate’s annual meeting takes place.

At that time, shareholders will have the opportunity to vote for four new Directors of the Board.

Who will win, and what’s in store for this far-reaching chemical company?

The List of Grievances

Trian purchased a stake in DuPont of approximately 2.7%, or $1.8 billion, in March 2013.

Since then, Trian has been vocal about its desire to replace the current board, saying it wants to hold them accountable for “consistent underperformance.” In April, the fund manager launched its “DuPont Can Be Great” campaign aimed at shareholders.

The thing is, DuPont’s stock price over the last five years doesn’t look too shabby, with a $65-billion market capitalization.

No Sign of Poor Performance: Dupont Five-Year Share Price

Still, Trian executives say DuPont’s value could and should be much higher. All the company needs is the right board in place.

In fact, Trian executives believe that DuPont’s implied target value per share could be in excess of $120 by the end of 2017.

Trian has been harping on a few specific statistics to back up its complaints:

  • The earnings per share (EPS) in the last three years was below the EPS in 2011. If management had hit their 2010 five-year target, EPS would be $6.45 for 2015. Currently, the company is on track to hit a 2015 EPS of $4.00 to $4.25.
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    Author: Travis Esquivel

    Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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