- Hedge fund billionaire Bill Ackman lost his bid to add three directors to ADP's board as shareholders voted to re-elect all the incumbents.
- Ackman disclosed an 8% stake in the HR-software and services provider in August. He said the company's profit margins were well below their potential and believed it could double its stock price in five years.
- The campaign turned bitter and personal, with ADP's CEO describing Ackman as a "spoiled brat" and Ackman reportedly threatening a damaging media campaign against the company.
- Ackman said Monday that he would continue to call for changes at ADP even if he lost the vote.
Bill Ackman's bid to add three directors including himself to ADP's board was rejected by the company's shareholders on Tuesday.
The billionaire founder of the hedge fund Pershing Square (NYSE:SQ) started a bitter proxy battle with the HR-software provider in August, calling for sweeping changes including the replacement of CEO Carlos Rodriguez.
Ackman, whose hedge fund disclosed an 8% stake in the $49 billion company, said the company's margins were "vastly below" their potential. He said ADP's stock price could double in five years without the company changing its dividend or capital structure.
Ackman's nominees were supported by less than 20% of ADP's shareholders, the company said. The loss may reverberate beyond this single trade for Ackman. Reuters reported on Monday that some of the billionaire's investors may pull investments from his fund if he loses.
"This process has sharpened our focus on the importance of insightful, strategic engagement with our investors, which, over the past few months, has given us a greater appreciation of our owners’ perspectives on our business and growth plans," Rodriguez said in a statement.
Ackman's bid turned bitter and personal. Rodriguez described Ackman as a "spoiled brat" on TV. He also said Ackman threatened a media campaign against the company — one the investor reportedly said he was poised to win because he was second only to President Donald Trump in terms of internet clicks.
ADP shares fell by about 1% premarket on Tuesday. They are little changed since Ackman began his proxy battle in August, and have more than doubled during Rodriguez's tenure as CEO.
Ackman said on Monday that he would not dump his stake in ADP if he lost the vote, and would continue to publicly call for changes.