By Jacob Bunge and David Benoit
Calpers, the California pension giant, cast its shares in favor
of DuPont Co. in the company's ongoing proxy fight with activist
Trian Fund Management LP.
The California Public Employees' Retirement System disclosed
Thursday that it had voted 6.15 million shares in favor of the
chemical company's slate, an amount that would make it a top 20
voter, according to an ownership count on FactSet.
In explaining its position, Calpers on its website cited the
performance of DuPont's stock and concerns about Trian's thesis for
the company, which it called "relatively short term." The pension
firm also applauded the company for steps it has taken to cut costs
and spin off its large performance chemicals business, adding that
the "case for further disaggregation of the business is
unclear."
Anne Simpson, the head of corporate governance at Calpers, said
in an interview that the pension fund spoke to both sides in the
campaign and reviewed Trian's thesis, but ultimately felt DuPont's
board had proven it had expertise and was doing the right things.
For instance, she said, Calpers concluded Trian's suggested
cost-cutting wouldn't add much to DuPont's own cost
initiatives.
"It's looking after your goose that lays the golden egg," she
said. "Trimming your goose isn't in your long-term interest."
Trian has had on its side the other large California pension
operator, California State Teachers' Retirement System, or Calstrs.
Itself a Trian investor, Calstrs has been pushing DuPont alongside
the activist fund.
DuPont and Trian have been engaged in a proxy fight since
January as Trian has sought four seats on the board, including one
for its co-founder and chief executive, Nelson Peltz. Trian has
criticized management's performance and suggested a breakup of the
company. DuPont has said its board and management are strong and
that a breakup would destroy value.
The vote is scheduled for May 13. The vote is expected to be
close, and each side has been campaigning heavily. Investors have
until the day of the election, Wednesday, to cast their
ballots.
DuPont in a statement said: "We are pleased Calpers supports the
election of all DuPont nominees and gratified by their vote of
confidence in our strategy, our progress and our performance."
Write to Jacob Bunge at jacob.bunge@wsj.com and David Benoit at
david.benoit@wsj.com
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