ADP rejects billionaire investor’s attempts at board-level change

Bill Ackman is keen to shake up the payroll giant, claiming it is a “lethargic and inefficient sleeping giant”.

ADP has rejected attempts by billionaire investor Bill Ackman to add his own candidates to the US payroll giant’s board, attesting that the nominees – which include Ackman himself – would not improve things.

According to the Daily Telegraph, tensions between the two parties have been rising over recent weeks. Ackman’s Pershing Square Capital Management fund issued a 168-page report recently calling for major change at the “lethargic and inefficient sleeping giant”, in which it recently took an 8% stake.

As part of a bid to shake up the company, it also said that it wanted to add three of its own candidates, including Ackman, to the ADP board. Ackman believes that ADP could improve its operating performance by accelerating growth, improving the quality of its software and service offerings, slashing costs and boosting efficiency.

But ADP, which has a market capitalisation of US$50 billion, dismissed Pershing’s statement, claiming that none of its proposed nominees would “bring additive skills or experience” to its existing 10-member board, which it intends to re-elect.

The group’s chairman John Jones said: “Adding Mr Ackman’s nominees would not be an improvement. Unlike Mr Ackman’s nominees, ADP’s directors have a deep understanding and appreciation of the current state of ADP’s business and its clients.”

ADP also told the Reuters news agency that Ackman’s aim was to oust Carlos Rodriguez, who has been its chief executive (CEO) since 2011. But Pershing Square countered saying that it was willing to work with ADP’s existing management or a new external CEO.

In a TV interview last month, Rodriguez described the hedge fund manager as acting like a “spoiled brat”. In a recent filing, Pershing also said that Rodriguez had accidentally sent an email to Ackman, rather than the general counsel for whom it was intended, indicating that he did not find the investor’s willingness to work with him credible.