Bill Ackman Nominates Himself, 2 Others for ADP Board

August 8, 2017

Billionaire investor activist Bill Ackman took the next step in his campaign to shake up outsourcing giant Automatic Data Processing Inc. by nominating three directors to the company’s board — including himself.

Ackman’s Pershing Square Capital Management, which said last week that it owned about 8 percent of ADP, nominated Veronica Hagen and Paul Unruh alongside Ackman, according to a statement Monday. Ackman also said he would hold a public webcast on Aug. 17 to detail opportunities he sees for unlocking value at ADP.

ADP said in a statement that it would evaluate Ackman’s nominees for the board ahead of its annual general meeting later this year.

“ADP is open to constructive input from our shareholders and our board respects the right of shareholders to nominate directors,” the company said. “We believe our current board has the right balance of leadership continuity and fresh perspectives to help ADP continue our strong track record of delivering value to shareholders."

Ackman, 51, could use a win in his investment at ADP. In March he exited a high-profile investment in Valeant Pharmaceuticals International Inc. that cost his firm $4 billion. Pershing Square’s stake in Chipotle Mexican Grill Inc., which was hit by renewed food-safety concerns last month after a norovirus outbreak temporarily closed one of its Virginia restaurants, is worth almost $190 million less than when he acquired it last year.

His push for change at ADP has already drawn some criticism, including Monday from Omega Advisors founder Leon Cooperman, who said Ackman’s campaign was “foolish” and “not merited by the facts.”

‘Dead Wrong’

“This is something I happen to know quite a bit about and he’s dead wrong,” Cooperman, a former ADP board member, said on CNBC. He said the company has been tremendously successful and praised its chief executive officer, Carlos Rodriguez.

Ackman maintains there’s still significant room for improvement. He contends his board slate will help accelerate growth, improve margins and cut costs, making the company more competitive.

“We are pleased to nominate such superb independent directors to the board of ADP who will bring relevant skills, expertise and judgment to assist the board in achieving ADP’s maximum potential,” Ackman said in the statement.

Hagen, 71, was CEO of Polymer Group Inc. from 2007 until her retirement in 2013. She remained on the company’s board until 2015. Unruh, 68, held senior leadership positions at engineering and construction services firm Bechtel Group Inc., including vice chairman and chief financial officer, before his retirement in 2003.

CEO Targeted

ADP, which handles the paychecks of about 26 million Americans, has so far resisted Pershing Square’s demands since meeting with Ackman last week. The company said Ackman originally wanted five seats on the company’s 10-member board and had sought an extension of the Aug. 10 nomination deadline. Ackman also talked about potentially replacing Rodriguez with an outside candidate, ADP said.

New York-based Pershing Square said last week it was willing to work with existing management or an external CEO candidate to push for changes.

Pershing Square typically buys large stakes in a handful of big companies and agitates for executives and directors to make changes to boost shareholder returns.

With ADP’s market value close to $50 billion, Pershing Square’s stake is worth about $4 billion — by far its biggest single holding, according to data compiled by Bloomberg. Pershing Square said Monday in filing that it had an 8.3 percent stake in ADP.

ADP manages services including payroll, human resources and taxation for corporate clients. It also provides monthly U.S. employment data through its research institute.

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