DuPont rejects activist request to change how directors are elected

A view of the Dupont logo on a sign at the Dupont Chestnut Run Plaza facility near Wilmington, Delaware, April 17, 2012.

Credit: Reuters/Tim Shaffer

(Reuters) - DuPont (DD.N) on Tuesday rejected a push to let shareholders split their votes between company-backed directors and those nominated by activist investors in an escalating proxy battle with Nelson Peltz.
Peltz's Trian Fund Management LP has been publicly critical of the company's performance and requested DuPont use a tool called a universal proxy, which has played a key role in company shake-ups.
A traditional proxy uses white cards that contain the company-backed nominees or gold cards that list the shareholder nominees. The universal proxy allows
shareholders to split their vote if they are not fully convinced of either party during a proxy battle.
DuPont said a universal proxy could compromise access and accuracy and issuing the card to all 600,000 individual shareholders could be cumbersome. A date for the shareholder meeting has not been set. Last year it was April 23.
The universal card played a key role in billionaire activist investor William Ackman's loss to Target Corp (TGT.N) in 2009 and his successful shakeup of Canadian Pacific Railway Ltd's (CP.TO) board a few years later.
Peltz's Trian said it was disappointed that DuPont chose to limit shareholder choice.
DuPont said on Tuesday it had consulted with experts and believes the use of a traditional proxy card remains the most reliable and accurate process for electing directors.
The industrial conglomerate said the use of a universal proxy card would also not allow holders to sign and return voting forms without marking a preference.
Trian, which owns a 2.68 percent stake in DuPont, has urged shareholders to vote for Peltz and three other nominees to the company's board.
DuPont has repeatedly snubbed Trian's demand and instead named two of its own nominees as directors in February.
Trian, which had previously called for a break-up of DuPont, said in February it was "open-minded" about keeping the company together, but criticized it for failing to meet earnings and revenue targets.
DuPont shares closed down marginally at $78.07 on the New York Stock Exchange on Tuesday.