ADP CEO Rodriguez Slams Pershing Square's Ackman As Proxy Battle Heats Up

Aug 10 2017 | 8:59pm ET

ADP CEO Carlos Rodriguez didn’t mince words when asked on CNBC about Bill Ackman’s activist interest in his company, saying the Pershing Square founder reminded him of a "spoiled brat" and blasting the hedge fund manager’s research into the payroll processor. 

Ackman’s Pershing Square hedge fund disclosed an 8.3% stake in the payroll processing company last week and nominated three people – including Ackman – to the company’s board on Tuesday after being rebuffed in efforts to delay today’s nomination deadline. 

In revealing its stake, which has been amassed primarily through derivatives, Pershing Square said it thinks there is an “enormous opportunity” to boost ADP operating performance through faster growth, reducing operating costs and increasing efficiency. However, unlike many activist targets, ADP’s performance has been strong under Rodriguez - in the last six years, ADP’s total shareholder return of 202% is well in excess of the S&P 500’s gain of 128%, and several times that of Pershing's 29% over the same period. And none less than Omega Advisors CEO and former ADP board member Leon Cooperman suggested in an email last week that Ackman’s push might not be “intelligent or appropriate.”

Rodriguez, who said the company was in the process of scheduling a meeting with Ackman for early September, also took issue with some of Pershing Square’s research, saying it is relying on “disgruntled ex-employees” for its conclusions. That said, Rodriguez also said he would be willing to listed to Ackman if he has “come up with something or stumbled on some kind of idea that would enhance the value of ADP.”

Rodriguez’s candor almost certainly sets the stage for a proxy battle with Pershing Square, whose minority slate of director nominees will likely be contested by the company in the runup to its annual meeting this November. 

Pershing Square did not immediately comment on the interview, according to Reuters, which said the company preferred to respond during an August 17 conference call during which it plans to discuss its position in ADP.

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