Peltz’s DuPont Downfall: Passive pansies and the retail ‘sheep’ investor
Peltz’s battle at DuPont took a hit, albeit minor, over the last day or so. The latest is that Calpers is backing DuPont, having called Peltz short sighted. It voted its measly 0.7% stake for DuPont nominees. They also didn’t like the idea of splitting up the company and increasing its leverage. Then, this morning, the Canada Pension Plan Investment Board Plan also voted against DuPont - having an even smaller stake than Calpers but being a top 100 shareholder.
Recall that Peltz has gotten support from ISS and Glass Lewis - to some degree - with the two proxy advisors only recommending 2 of Peltz’s 4 nominees.
But Vanguard will be the real kingmaker here. Along with State Street, the two own over 10% of DuPont. BlackRock’s in there too. What’s interesting is that Houlihan Lokey (h/t MoneyBeat) found that BlackRock has sided (even partially) with activist in 45% of 2014’s proxy battles, but State Street was at 24% and Vanguard at 21%.
And don’t over discount the sheep (retail investors) in the proxy battle, where DuPont has a large shareholder base of retail investors - over a third of its shares are owned by sheep, well more than most large companies. Sheep don’t fully understand activism and will likely vote against the wolf (Peltz), but unknowingly be leading themselves to slaughter under Ellen Kullman’s (the lion) reign.
Nonetheless, Peltz has his work cut out for him come next Wednesday’s DuPont shareholder meeting.