P&G Fires Back as Proxy Advisory Firm Endorses Peltz
" Cincinnati Business Courier (09/22/17) Brunsman, Barrett J."
Procter & Gamble Co. (PG) is questioning Glass Lewis & Co.'s analysis, following the proxy advisory firm's endorsement of Nelson Peltz's efforts to be elected to the consumer product company's board. Peltz's Trian Fund Management has a $3.5 billion stake in P&G. "Glass Lewis fails to recognize that P&G has delivered consistently strong operating results over the last five years, excluding the effects of currency, while executing its transformation of the company," P&G said. "P&G has delivered constant currency core earnings per share of 11% on average." Glass Lewis recommends that shareholders vote for Peltz, who has vowed to shake up the company if elected to the board. "In lieu of leveraging P&G's scale to aggressively pursue compelling growth opportunities and meaningfully streamlined architecture, investors have been offered a nearly perpetual series of half-step rebuilds," Glass Lewis stated in a press release issued early on Sept. 22 by Trian. "While P&G is quick to point to the company's existing restructuring effort, we consider there are relatively few decisively favorable metrics on which the board can hang its hat with confidence. In contrast, we find Trian more readily identifies a number of problematic trends—from (total shareholder return) to operational growth metrics to market share—that suggest P&G's existing trajectory is less than attractive." P&G says it has delivered total shareholder return of 28% since David Taylor became CEO in late 2015.
Jana Claims EQT-Rice Energy Deal Synergies 'Grossly Exaggerated'
" Reuters (09/20/17) Swamynathan, Yashaswini"
Jana Partners is stepping up its pressure on EQT Corp. (EQT) to ax its $6.7 billion acquisition of Rice Energy Inc. (RICE). In a letter on Wednesday to EQT's board, Jana declared the oil and gas producer's expectation to save $2.50 billion after its acquisition of Rice Energy was "grossly exaggerated." The hedge fund said its research indicates the merger with Rice Energy's assets would raise the average lateral length of a well by fewer than 1,000 feet, not the 4,000 feet estimated by EQT. "Given the massive disparity between EQT's claims and what our analysis reveals, we are forced to question whether the Board conducted adequate diligence before approving this transaction," the hedge fund said. Jana, which owns a 5.8% stake in EQT, instead wants EQT to spin off its midstream business. Its letter comes just days after hedge fund D.E. Shaw & Co LP called on EQT to separate its production and midstream units once it closes the Rice Energy deal. Meanwhile, an EQT spokeswoman said the company is "confident that the present value of synergies to be realized are in excess of $2.50 billion."
BlackRock CEO Fink Says He Is Committed to Gender Diversity
" Reuters (09/20/17) Hunnicutt, Trevor; Kelly, Stephanie"
BlackRock Inc. (BLK) CEO Larry Fink on Sept. 20 said the company must reflect its customers in terms of gender. "The reality is in the world more than 50% of household wealth is managed by women," he said, speaking at the Bloomberg Global Business Forum in New York. "And so if I'm going to be a mirror of my clients, we are going to need more women in our firm." Some 39% of its workers are women, with 43% of its total hires and 29% of those brought aboard in senior leadership positions last year being female; the company has four women on its board. BlackRock has been pressured by activists to support shareholder-fronted propositions at the companies in which it invests and vote against boards to spark improved corporate citizenship. For his part, Fink has urged executives to concentrate on boosting long-term value for shareholders, instead of merely meeting short-term profit targets. Lack of diversity is a leading issue; but Fink noted that potential U.S. withdrawal from the Paris climate accord also has piqued investor interest in environmental, social, and corporate governance issues.
'Pissed Off' P&G Shareholders Barraged With Robocalls, Mailings Amid Campaign-Style Fight
" Cincinnati Enquirer (09/20/17) Tucker, Randy"
Nelson Peltz's proxy fight against Procter & Gamble (PG) resembles a political campaign, with both sides lobbying shareholders for their support via social media, robocalls, and mass mailings. Former P&G employee Stan Shadwell already voted his shares for P&G's 11 director nominees, but that has not stopped the outreach. "We've been bombarded," Shadwell said. "We've had at least six or seven pseudo-proxies mailed to us with just Peltz's name on them. And we received another set from Procter, encouraging us to vote for the blue proxy." In addition, Shadwell said, he and his wife have received several robocalls in recent weeks from Peltz and P&G operatives. "It's pissing people off,' Shadwell said, noting that many of his fellow shareholders also feel harassed. The level of activity in the proxy fight is somewhat surprising even to a veteran of corporate wars—Daniel Karson of Kroll Associates Inc., which offers advice in such proxy contests. "I had not heard of robocalls other than in political campaigns, but if they are being made now, I'm not that surprised because, I think, the activist investors are feeling a little more wind at their backs." He said proxy contests have evolved from when most of the attention of activist investors was directed at institutional shareholders. Today, Karson noted, proxy fights are much more "granular" public relations contests for institutional and individual shareholder support.
It's Not Oppression of Minority Shareholders: SES
" Economic Times (India) (09/21/17)"
Proxy advisory firm Stakeholders Empowerment Services (SES) is siding with Tata Sons ahead of Thursday's annual meeting, stating that the company's proposal to convert from a public limited company into a private limited one is not oppression of minority shareholders as alleged by its former chairman. Cyrus Mistry, whose family owns an 18.4% equity stake in Tata Sons, has argued the move will restrict his family's rights to transfer or sell shares. "SES analysis concludes that the proposal does not change anything adversely for shareholders. It does not find anything wrong with the proposal from the governance point of view and the proposal cannot be said to be an oppression of minority," said JN Gupta of SES. Under the 2013 Companies Act, shares of a public limited company are freely transferable—unlike shares of private companies, which require board approval. However, SES argued that as Tata Sons' Articles of Association already limits the free transfer of shares, it overrides the requirements of the Companies Act. "The shares were neither freely transferable before, nor will they be now … Therefore, with Tata Sons becoming private company, there is no variation in the rights of any member, as far as transfer of shares is concerned," said SES. "All shareholders have lived with these restrictions for a century, why protest now? ... SES feels that in such a situation the majority has every right to take action to protect its character, provided it does not trample on rights of minority, which it is not doing."
New Chairman of BHP Billiton Promises 'Fresh' Look at Business
" Financial Times (09/20/17) Hume, Neil; White, Edward"
BHP Billiton's (BBL) new chairman, Ken MacKenzie, promised "to bring a fresh perspective to the existing review process" for the Anglo-Australian company's portfolio of mines and assets. Last month, the company bowed to pressure from investors in putting its U.S. shale oil business up for sale and delaying a move into potash. Elliott Advisors, which holds a 5% stake in the company, called MacKenzie's appointment a "constructive step." Elliott has been pressuring BHP to deliver better returns. Among other things, MacKenzie said that during a recent "listening tour" investors brought up the topic of "board refreshment." He noted that the company is reviewing the metrics it uses to pick non-executive directors in light of "technological and other changes." MacKenzie added, "As incoming chairman, I spent much of the past three months engaging with shareholders and other stakeholders around the world in order to better understand their perspective. I plan to engage with investors on a regular basis."
ValueAct's Morfit Leaving Microsoft's board
" Seattle Times (09/19/17) Day, Matt"
Microsoft (MSFT) announced Tuesday that G. Mason Morfit, president of ValueAct Capital, is leaving its board of directors after three years. His departure caps a reign of success and improved market value since the hedge fund first called for changes five years ago. When ValueAct announced in April 2013 that it had acquired a roughly 1% stake in the company, Microsoft stock was trading below $30 a share. On Tuesday, it was worth $75.44 a share. ValueAct has recently reduced its holdings to about 9 million shares, having sold 7 million shares this summer in a more than $500 million sale. Morfit, who in May took on more responsibility at ValueAct as chief investment officer, will not seek re-election to Microsoft's board when his term expires in November, the company said. It has appointed Pepsi (PEP) CFO Hugh Johnston to its board, effective immediately. When ValueAct first invested in Microsoft, the company was struggling, as misses in smartphones and Internet applications saw it lose clout to competitors like Apple and Google. Its stock price lagged for more than a decade after the dot-com bust. Four months after announcing its stake in Microsoft, ValueAct secured a deal with the company for board representation. Morfit joined the company's governing council in March 2014, a month after Satya Nadella succeeded Steve Ballmer as CEO. Some speculated that ValueAct may have accelerated Ballmer's exit, although Ballmer has disputed that claim.
Huntsman Responds to False and Misleading Comments From White Tale on Proposed Merger With Clariant
" PR Newswire (09/19/17)"
Huntsman Corporation (HUN) issued a statement Tuesday in response to a letter from White Tale Holdings—the investment vehicle controlled by hedge funds 40 North and Corvex, which now owns a more than 15% stake in Clariant. In the statement, Huntsman President and CEO Peter Huntsman dubbed White Tale's strategy "destructive," describing its "false attacks" on the company's performance and portfolio as a "self-serving attempt to derail" the merger with Clariant. "Since March 2016, we have delivered more than we promised: free cash flow in excess of our peers and more than $2 billion of deleveraging, the separation of our Pigments and Additives business, and significant growth in our downstream specialty and differentiated businesses. Our total shareholder return over that time has been above 150%, which is far more than Corvex has delivered to its investors," the statement reads. Huntsman also notes that the company has "delivered long-term and sustainable value to its stockholders" and has a strong operational track record—most recently demonstrated by the company's acquisition and transformation of the Rockwood businesses. "I have not met with White Tale and have no intention to do so," Huntsman added. "Their activism is all about the short-term, break-up value of Clariant and is not about Huntsman."
Mistrys Warn Listed Tata Companies on Tata Sons' Move to Go Private
" Times of India (09/19/17) Zachariah, Reeba"
Cyrus Investments, owned by the Mistry family, has penned a letter to the boards of six listed Tata companies urging them not to support Tata Sons' move to become a private limited company. Cyrus Investments warned that subsequent stake-sale restrictions curbs will be "contrary to the interests of public shareholders" and that the Tata companies will struggle to divest their shareholding in Tata Sons if it moves from a public to a private limited company. The six companies together own an 8.8% stake in Tata Sons, which is estimated to be worth at least $4.3 billion, and the Mistrys own 18.4%. The letter comes ahead of Tata Sons' annual general meeting on Thursday, during which shareholders will vote on amendment to its Articles of Association and Memorandum of Association to become a private limited company. The resolutions, if passed, would have an "adverse and detrimental impact" on companies holding Tata Sons shares, the letter stated. The change in Tata Sons' legal structure requires 75% shareholder approval. Tata Sons' move will also result in "dilution" of governance standards, declared Cyrus Investments, and will not necessarily ensure minority protection.
Sina Hits Back as Aristeia Urges Reforms
" Financial Times (09/19/17) Feng, Emily"
One of China's oldest internet companies, Sina (SINA), is defending itself against Aristeia Capital, the Connecticut-based hedge fund that has launched a proxy fight against the company. Sina questioned Aristeia's intentions in a statement on Tuesday, declaring it does not believe that the hedge fund "is truly interested in governance," and rather in "implementing a short-term and self-serving agenda." The fund is pressuring Sina to boost shareholder value by enacting a series of corporate governance reforms, including either a sale or merger of Sina or its microblogging platform Weibo, a reverse merger in which Weibo acquires Sina, or a repurchase of Sina shares. Aristeia—which holds a 3.5% stake in the company, making it the fourth-largest shareholder—has nominated two candidates to Sina's five-member board, arguing that the existing board exercises undue influence over finances and operations and has resulted in a significant undervaluation of the company. Currently, Sina itself is valued at less than its 46% holding in Weibo. According to Aristeia, "Sina is in fact not being governed for the benefit of all of its owners, but rather for the personal advancement or desires of a select few insiders." This marks the first proxy battle launched against a Chinese company by a foreign shareholder.
Reckitt Benckiser Replaces Long-Serving Chairman Adrian Bellamy
" Financial Times (09/19/17) Daneshkhu, Scheherazade"
Reckitt Benckiser announced Tuesday that it is replacing two longtime directors, including its chairman, following shareholder pressure. Adrian Bellamy had chaired the company for 14 years, and Judy Sprieser headed the remuneration committee for 13 years. Both will be replaced with other directors. For years, shareholders have criticized the length of tenures of both individuals—specifically with Sprieser managing the committee that determines the pay of Rakesh Kapoor, one of the best-paid CEOs in the U.K. Shareholders were most adamant at Reckitt's annual meeting last year. ShareSoc, an association of individual investors, said at that meeting that Kapoor's 2015 pay packet of £23 million was "indefensibly high," and the Railways Pension Scheme voiced "significant concerns about the quality of board governance." Samuel Johar, chairman of London-based headhunters Buchanan Harvey, said on Tuesday: "The move was overdue—six to nine years as chairman is more in line with best practice for a company of this size."
Teva Should Ditch Generics, Focus on Branded Drugs, Investor Says
" Times of Israel (09/19/17) Solomon, Shoshanna"
Teva Pharmaceutical Industries Ltd. (TEVA) shareholder and tech entrepreneur Benny Landa is calling on the drug manufacturer to sell its generics business and instead focus on developing specialty medications, or split the company in two. "For the long-term health of the company, in my opinion, Teva has to carve out generics and remove it from the focus of Teva's business," said Landa in an interview with The Times of Israel. Landa declined to disclose the size of his stake, but said he holds "enough shares in Teva to have a voice, and get the board's attention." He is reported to own tens of millions of dollars' worth of Teva shares. Landa, who led a proxy fight in 2014 in an effort to shake up Teva's board, said new CEO Kåre Schultz will have to prioritize setting out a strategy for the company. To "wean itself from generics," Landa said, Teva's only options are to sell its generics business or split the company into two, with each branch specializing in either branded drugs or generics medications. If the new CEO is to succeed, Landa said, the chairman of the board will need to pave the way by "getting rid of the old guard directors," lest they undermine Schultz. "Teva's board is an old boys club that needs refreshing," Landa added, with too many directors having served for too many years.
Aristeia Capital Launches Proxy Fight Against China's Sina
" Wall Street Journal (09/19/17) Steinberg, Julie"
Aristeia Capital LLC is waging a proxy fight against Sina Corp. (SINA), proposing that the Chinese Internet company explore a potential sale of itself or its stake in popular microblog service Weibo Corp. (WB). The fund is seeking changes to narrow the valuation gap between Sina and Weibo, the Twitter-like company in which Sina owns a roughly 46% stake. Aristeia—Sina's No. 4 shareholder, with just over a 4% holding in the company—said it launched the campaign after attempting to hold private talks with Sina's executives, including Chairman and CEO Charles Chao, regarding its suggestions. Aristeia finally met with Chao and other Sina board members in Hong Kong last month after submitting two nominees for election as independent directors, a source said. They left frustrated with what they considered to be management's dismissive treatment of their views. The hedge fund has proposed various strategies to maximize value, including a possible sale or merger of Sina; a reverse merger in which Weibo would absorb Sina; a spinoff of Weibo shares to Sina shareholders; a sale of Sina's Weibo stake and distribution of proceeds; or a buyback of Sina's shares. Aristeia is also critical of the company's governance, with Chao holding a permanent seat and the four other board members—of which only one comes up for re-election each year—having longstanding ties to the company. In addition, Aristeia argues the company has made unnecessary stock issuances to related parties, including Chao, and excess cash from the issuances still sits on its balance sheet.
Blue Harbour Builds Up 6.2% Stake in Auto Supplier Adient
" Wall Street Journal (09/15/17) Benoit, David"
Blue Harbour Group LP has become Adient PLC's (ADNT) third-largest shareholder with a roughly 6.2% stake, marking its biggest investment ever at about $410 million. Blue Harbour's bet is based on a belief that Adient can radically improve its margins, increase share buybacks, and adjust its network of joint ventures in China, Blue Harbour partner Peter Carlin said in an interview. He believes management is on that track and supports the work it is doing but still thinks the market is missing value in the company. Blue Harbour's holding in Adient comes less than a year after the automotive-seat supplier was spun out of Johnson Controls International PLC (JCI) into a stand-alone company. The strategy mirrors one Blue Harbour demonstrated last year with a hugely successful investment in BWX Technologies Inc. (BWXT), another company that had just undergone a breakup. The investment was Blue Harbour's most profitable ever, and the fund attributes its profits almost entirely to gains made after that split. Adient has already been working to improve its profit margins, and Blue Harbour predicts that even more increases are coming, Carlin said. Meanwhile, the stock trades at lower multiples than competitors, so Blue Harbour is urging management to redouble its share repurchases. Blue Harbour also said the complexity of Adient's Chinese business, which is based on 17 joint ventures with car manufacturers there, has damaged its stock value. It believes Adient should consolidate the joint ventures or better show investors how it makes money there.
Clariant May Join Swiss Blue-Chip Index if Disputed Merger Succeeds
" Reuters (09/15/17) Miller, John"
Clariant's proposed $20 billion merger with U.S.-based Huntsman (HUN) could push the combined company into Switzerland's blue-chip Swiss Market Index (SMI). However, the deal must first survive a challenge from U.S.-based funds Corvex and 40 North, whose White Tale has taken a roughly 10% stake in the Swiss specialty chemicals maker in an effort to convince shareholders to reject the transaction. Two-thirds of Clariant shareholders must support the deal for it to proceed, and a vote is expected by January. If the deal succeeds, HunstmanClariant, with a market capitalization of around $15 billion, could challenge other firms on the cusp of SMI membership and potentially eject an existing member. "Joining Switzerland's leading index would make Clariant much more relevant for Swiss funds," said Kepler Cheuvreux analyst Christian Faitz. However, Corvex's Keith Meister and 40 North's David Winter and David Millstone say Clariant's specialty chemicals businesses are a poor fit with Huntsman's commodity operation, but without publicly offering a specific alternative, analysts say prospects of the transaction succeeding are favorable. "Right now, the only thing that could really change this merger story is for White Tale to find a group of investors, somebody to buy Clariant completely," Baader Helvea analyst Markus Mayer said.
D.E. Shaw & Jana Campaign for EQT
" ValueWalk (09/15/17)"
D.E. Shaw has sent a public letter to EQT (EQT) indicating that it would support the natural gas producer's bid for Rice Energy (RICE) only if it commits to certain actions that the hedge fund says could unlock an extra $8 billion in value. The hedge fund, which holds a 4% stake in EQT, wants the company to immediately appoint midstream specialists to the board; commit to splitting itself in two after the transaction, separating the combined company's production and upstream assets from its midstream assets; and moving forward with a merger of two separately listed partnerships, EQT Midstream Partners and Rice Management Partners, which EQT Midstream would control. D.E. Shaw suggests that EQT Midstream itself would be a potential takeover target. Jana Partners, a 6% shareholder in EQT, recently launched a solicitation to vote down the deal, and some observers think D.E. Shaw could end up boosting Jana's campaign. Jana, the hedge fund led by Barry Rosenstein, wants to split the company on broadly the same lines as D.E. Shaw and could benefit from the support of D.E. Shaw's portfolio manager, Quentin Koffey, who is leading his fund's campaign.
EQT Says It Is Exploring Options Amid Pressure to Split
" Wall Street Journal (09/14/17) Hufford, Austen"
EQT Corp. (EQT) announced it would explore its options amid growing shareholder pressure to split up the energy company, which plans to purchase Rice Energy Inc. (RICE) for $6.7 billion. The announcement came after D.E. Shaw Group called for EQT to separate its pipeline business from its exploration and production operations. Jana Partners LLC in July called for a similar breakup. The company said late Wednesday it had hastened its effort to address worries that its share price undervalues the combined pipeline and exploration businesses. The company said it would propose a plan in the first quarter of 2018, before its next annual meeting. It had previously vowed to come up with a plan by the end of 2018. D.E. Shaw, which owns 4% of EQT, sent a letter to the energy company early Thursday detailing its concerns. The subject had been under discussion for a while, according to sources. On Wednesday morning, before D.E. Shaw Group's position was disclosed, EQT's board had approved the creation of a special committee to consider alternatives for parts of the company after its deal with Rice closes, some sources said—a move the board had been considering for some time. Another source said D.E. Shaw had been engaging with the company before its public comments. Jana Partners, which owns a roughly 5% stake in EQT, wants the company to cancel the Rice purchase, while D.E. Shaw said in its letter that EQT should continue with the deal and then split the businesses. Both hedge funds say they want EQT to fully list its pipelines, which already trade publicly.
Yacktman Asset Management Backs Nelson Peltz in P&G Proxy Fight
" Wall Street Journal (09/14/17) Minaya, Ezequiel"
Yacktman Asset Management on Sept. 14 stated that it supports Nelson Peltz's addition to the board of Procter & Gamble Co. (PG). Yacktman Asset Management, which has a stake in the consumer-goods company valued at more than $1.3 billion, said in an open letter to the board that it intends to vote in favor of Peltz at a shareholder meeting scheduled for Oct. 10. "Yacktman believes that, after years of business and share-price underperformance, P&G shareholders deserve a highly engaged, shareholder-focused voice in the boardroom," the letter stated, adding that Peltz is the right choice to ask "the tough questions" at P&G and demand "strong execution from management." P&G has rejected Peltz's attempt to get a board seat, and said in a statement Sept. 14 that its 2017 results show that the plan it has in place is working. "While we did not ask for this proxy contest, we are taking the necessary steps to ensure that our shareholders understand the facts," the company said. "P&G is focused on creating value for the short-, mid-, and long-term and we are committed to preventing anything from derailing the progress we are making." Peltz's Trian Fund Management owns a 1.48% stake in P&G valued at $3.5 billion.
EQT Gets Pressure From Second Investor on Proposed Rice Acquisition
" Wall Street Journal (09/13/17) Hufford, Austen"
D.E. Shaw Group reportedly is rolling out a campaign against EQT Corp. (EQT), adding to pressure against the energy company after Jana Partners LLC launched its own shakeup attempt in July. D.E. Shaw is seeking a breakup of the company after it completes a $6.7 billion acquisition of Rice Energy Inc. The hedge fund, which owns 4% of EQT through in stock and options, will send a letter to EQT Thursday outlining its concerns, a source said. Jana Partners' earlier campaign against EQT called for the Rice purchase to be canceled and EQT to split its pipeline operations from the exploration-and-production business. Jana owns a roughly 5% stake in EQT. D.E. Shaw, meanwhile, wants EQT to move forward with the Rice purchase before separating the pipeline and exploration-and-production operations. Both investors say they want EQT to fully list its pipelines, which already trade publicly. D.E. Shaw then wants Rice's publicly traded midstream assets to be merged with EQT's pipelines business. It also wants EQT to appoint board members with experience running a midstream business or corporate-restructuring efforts. D.E. Shaw's campaign against a publicly traded company could foreshadow future activity: the letter is signed by Quentin Koffey, a D.E. Shaw portfolio manager who recently came over from Elliott Management Corp., where he helped run several campaigns.
ADP Sends Letter to Stockholders
" Marketwired (09/14/17)"
ADP's (ADP) board of directors sent a letter to stockholders on Thursday urging them to vote in favor of the company's 10 director nominees by the Nov. 7 annual meeting. "Over the last five years," the correspondence notes, "ADP has delivered a Total Shareholder Return (TSR) that has significantly outpaced the S&P 500, while driving strong revenue, margin, and EPS growth." It adds that since Carlos Rodriguez became CEO nearly six years ago, ADP has generated TSR of 203%, compared with 128% for the S&P 500 and 153% for peers in the human capital management space. The board has also returned $11.3 billion in share buybacks and dividends since FY 2011 and raised the annual dividend for the past 42 consecutive years. ADP acknowledges that Pershing Square Capital Management has nominated three candidates for election to the board but considers the hedge fund's plan "vague and risky." ADP says the board recently met with Pershing Square and conducted a thorough review of each of its nominees but determined that none "would bring additive skills or experience"to the board. Pershing Square's claim that ADP can boost operating margins by 1,600 basis points or 16% from its already strong margins "presents major business risks for ADP," the letter states, and could cause "serious harm to our client relationships, disrupt mission-critical technologies, and put ADP's client retention—and by extension the ADP business model—at significant risk." It adds: "Furthermore, Pershing Square has provided no clear roadmap on how it intends to accomplish the returns that it has targeted."
Pershing Square Responds to ADP Presentation
" Business Wire (09/13/17)"
Pershing Square Capital Management has responded to ADP's (ADP) Sept. 12 presentation to investors. According the Pershing Square, "ADP's 'Focused Transformation Strategy' demonstrates a lack of recognition for the enormous value-creation opportunity that exists at ADP. Despite various operational initiatives highlighted throughout the presentation, the Company's projected results in the presentation suggest that these initiatives will not drive any meaningful margin expansion...On Aug. 17, Pershing Square presented a detailed presentation highlighting ADP's significant underperformance and opportunities for improvement. Four weeks later, the Company has yet to respond to the substance of our arguments and the magnitude of the opportunity...Pershing Square is seeking to replace the three longest-tenured members of the Board who presided over ADP as it has underachieved its potential for years. The directors we seek to replace do not have technology or industry expertise, a criticism ADP has leveled at our Nominees, and include a business school dean, and two former industrial sector CEOs. Pershing Square's Nominees for ADP's Transformation bring a shareholder orientation along with a major ownership stake, fresh perspectives, and relevant expertise in business transformation, corporate restructuring, and cost efficiency execution to accelerate the necessary changes required for ADP to achieve its full potential."