Forum Home Page [see Broadridge note below]

 The Shareholder ForumTM`

Fair Investor Access

See related case examples of

Dell Inc.

appraisal rights for intrinsic value realization

and

Walgreen Co.

stock buyback policies

"Fair Access" Home Page

"Fair Access" Program Reference

For graphs of specific company and related industry returns, see

Returns on Corporate Capital

For graphs of specific company voting for the past 5 years, see

Shareholder Support Rankings

 

 

 

Forum distribution:

Distinguishing between activist's management of investment funds and management of enterprises

 

For the initial statements of Professor Sonnenfeld in response to the television interview of Trian's Nelson Peltz, and for Professor Sonnenfeld's original op-ed commentary on the broader issue of activist fund managers' performance as enterprise managers, see

 

Sources: Wall Street Journal, April 16, 2015 letter responding to Wall Street Journal, April 9, 2015 letter

THE WALL STREET JOURNAL.  |  Opinion


Letters 

The Trian Fund Protests Too Much

DuPontís soaring current performance predates any Trian involvement.

 

April 16, 2015

I want to correct any misconceptions from Trian CIO Ed Gardenís April 10 letter regarding my April 2 op-ed ďActivist Shareholders, Sluggish Performance.Ē I am more focused on the mediocre performance following Trian Fund Managementís board service than its investor success. An investor should care what happens beyond the media drama of the initial investmentís stock pop.

The entire costly, distracting DuPont proxy battle is over Trian founder Nelson Peltzís requirement that he or his principals serve on the DuPont board. So what happens when they join boards? Five out of 11 boards Trian has joined since Trianís inception well underperformed the S&P 500 during the period of its service.

Trian had multiple disasters in the chemical industry, including when, in 2009, it quit the board of chemical company Chemtura a week before Chemtura declared bankruptcy.

While DuPontís proxy battle isnít about how Trian performs as an investor, looking over the past three years, Trianís cumulative returns at 54% are far below the S&P 500 at 74.6% and far lower than several leading activist funds. That is not cherry-picking random years. Trian filed an SEC correction April 3 on Mr. Peltzís performance overstatement.

DuPontís soaring current performance predates any Trian involvement. Does Trian want to suggest it inspired DuPontís engine of innovation through history such as nylon, rayon, Teflon, Mylar, Neoprene, Tyvek and Lycra?

This 212-year-old global icon is one of the top three largest, most profitable, efficient, integrated chemical companies in the world, whose continuing innovation, employment and economic contributions should be celebrated, not hacked up in fire-sale auctions.

Prof. Jeffrey A. Sonnenfeld

Yale School of Management

New Haven, Conn.

Letters 

We Activists Have Beaten the S&P

We have generated a return of approximately 137% net of fees since inception, outpacing the S&P 500.

 

April 9, 2015 4:16 p.m. ET

Jeffrey Sonnenfeldís April 2 op-ed ďActivist Shareholders, Sluggish PerformanceĒ misrepresents data to present a misleading picture of Trianís performance. The fact is we have generated a return of approximately 137% net of fees since inception, outpacing the S&P 500 by approximately 2,900 basis points. Shareholder returns for Trian portfolio companies on which Nelson Peltz served or serves on the board, from the day we invested until today, outperformed the S&P 500 by an average of almost 900 basis points annually.

Mr. Sonnenfeldís selective use of data is blatant in citing Trianís returns for 2014 and 2012óbut not including 2013. Not only is his 2014 figure wrong (our return was actually 11% net of fees), but he omits 2013 when we were up 40% net of fees, significantly outperforming the S&P 500.

Mr. Sonnenfeld also leaves out context for DuPontís share price performance. As detailed in our white paper, we believe this performance is largely due to a cyclical recovery and Trianís involvement, not DuPontís earnings which are down since 2011. We donít believe itís a coincidence that the two days of greatest DuPont stock price outperformance versus the S&P 500 since 2009 were the day news first broke that Trian had invested in DuPont and the day Trian released its white paper.

Trian takes pride in working constructively with companies to create shareholder value. That is why we have nominated four highly qualified candidates for election to DuPontís board. DuPont can be great again, but it will require eliminating excessive corporate costs, bureaucracy and management rhetoricóand bringing the highest level of accountability to the boardroom.

Ed Garden

Founding Partner and Chief Investment Officer

Trian Fund Management, L.P.

New York

 

Copyright ©2015 Dow Jones & Company, Inc. All Rights Reserved.

 

 

 

This Forum program is open, free of charge, to anyone concerned with investor interests in the development of marketplace standards for expanded access to information for securities valuation and shareholder voting decisions. As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

This Forum program was initiated to address issues and objectives defined by participants in the 2010 "E-Meetings" program relevant to broad public interests in marketplace practices, rather than investor decisions relating to only a single company. The Forum may therefore invite program support of several companies that can provide both expertise and examples of leadership relating to the issues being addressed.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to access@shareholderforum.com.

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forumô is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the ďShareholder ForumĒ name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.