DuPont-Trian Proxy Fight: Communications Lessons Learned

The high-profile, prolonged and contentious proxy fight between DuPont and Trian Partners recently concluded in victory for DuPont as shareholders elected all 12 members of DuPont’s director nominees. This outcome – which The Wall Street Journal deemed a “landmark” setback for Trian – represented the culmination of an epic battle spanning two years and included a pitched debate concerning the increasingly outsized role of shareholder activism.

After all, even before Trian began publicly agitating, DuPont had taken significant steps to improve productivity, return capital to shareholders, and position the company for the future through divestitures and related strategic efforts. The results seemed to speak for themselves as DuPont’s stock outperformed the broader market. Nonetheless, Trian campaigned aggressively on the notion that DuPont suffered from bloated corporate overhead, misguided acquisitions, and general underperformance relative to peers.

As with many proxy and activist situations, DuPont’s communications strategy played a vital role in the outcome. At the risk of over-simplifying an immensely complicated situation, we believe there are nonetheless key communications lessons that apply to public companies contemplating how to: (1) prepare for and preempt an activist shareholder; and (2) decisively manage such a situation once it has developed.

Key considerations in this regard include the following:

Looking ahead, corporate boards and management teams should be sensitive to emerging trends among activist investors, and to the extent possible, ensure activist tactics are met with a commensurate and effective response. Perry Street looks forward to a continued dialogue in this regard with our clients and friends of the firm.

1 See Trian Issues Statement - businesswire.com


Jon Morgan
Jonathan Morgan

Key Points: