WALL STREET JOURNAL.
The Trian Fund Protests Too Much
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,
DuPont proxy battle is over Trian
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
Trian had multiple
disasters in the chemical industry, including when, in 2009, it quit
the board of chemical company
a week before Chemtura declared
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.
Yale School of Management
New Haven, Conn.