DuPont Alters Bylaws as Activist Expected to Reveal Stake
DuPont Co. (DD) changed its bylaws to provide payouts to executives fired in a takeover and to alter how special meetings are run, days before an activist investor is expected to reveal a large stake in the chemical maker.
Chairman and Chief Executive Officer Ellen Kullman would receive three times her annual salary and bonus and other executives would get twice their compensation if fired after a company takeover, Wilmington, Delaware-based DuPont said today in a regulatory filing. Another bylaw change approved by the board yesterday sets Delaware as the jurisdiction for resolving fiduciary duty and shareholder rights disputes.
The changes follow a July 17 CNBC report that Trian Fund Management LP, co-founded by activist investor Nelson Peltz, has acquired “a very big” stake in DuPont, the biggest U.S. chemical maker by market value. The deadline for institutional investors to report second-quarter holdings is Aug. 14. Anne Tarbell, a managing director for Trian, didn’t immediately respond to a phone call seeking comment.
The change-in-control provisions are similar to ones in place for DuPont’s peers and other large companies, Michael Hanretta, a company spokesman, said by phone today. Payment to an executive terminated in a takeover is commonly known as a golden parachute.
“The purpose of these plans is to reduce uncertainty and distraction for key employees in the event of a change in control, and to retain key employees,” Hanretta said.
DuPont also altered bylaws on how special meetings of stockholders are called and conducted, including a requirement to provide advance notice for anyone nominating directors or proposing other changes.
All of the changes are part of DuPont’s regular review of governance, including bringing bylaws in line with best practices and peers, Hanretta said.
DuPont rose 0.5 percent to $59.71 in New York. The shares have gained 33 percent this year.
DuPont last month announced it’s exploring options for its performance-chemicals unit, which makes white pigment, Teflon coatings and Freon refrigerants.
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