E.I. du Pont de Nemours and Company (DuPont) DD
DuPont is a chronic underperformer under CEO Kullman; electing Nelson Peltz and three nominees unlocks $2-4bn of excess costs and drives DuPont stock to $120 by 2017 (21% IRR).
Thesis
DuPont has delivered bottom-quartile EPS growth versus its peers over 3-, 10- and 20-year horizons, and the 16-year unaffected stock decline reveals that CEO Ellen Kullman's 'higher growth, higher value' strategy has failed despite >$34bn of divestitures. Trian argues the root cause is conglomerate complexity: five of seven segments trail peers on both organic growth and EBITDA margins, while $2-4bn of excess corporate costs burden the business — evidenced by Axalta (the former Coatings segment) generating 68% more EBITDA under private-equity owners in the same year. With the CEO having sold 54% of her stock and management reporting nine different 2011 EPS figures, Trian seeks four board seats led by Nelson Peltz to eliminate bloat, rationalize the portfolio, and restore accountability. Trian targets $120/share by year-end 2017, a 21% IRR.
SCQA
DuPont is a 212-year-old diversified chemicals and industrials conglomerate operating seven segments spanning agriculture, nutrition, performance materials, electronics, safety and industrial biosciences, with a ~$35bn revenue base.
Under CEO Kullman, DuPont has delivered bottom-quartile EPS growth, trailed peers in five of seven segments on both growth and margins, and carries $2-4bn of excess corporate costs — as Axalta's post-spin EBITDA uplift exposed.
Elect Trian's four nominees — Nelson Peltz, John Myers, Arthur Winkleblack and Robert Zatta — to the board to assess corporate structure, eliminate excess costs, fix capital allocation and strengthen governance.
Implied target of $120/share by year-end 2017, a 21% IRR, based on 9.9x NTM EV/EBITDA with peer-level margins, prudent leverage, 10% dividend CAGR and full excess-cost recovery.
The three reasons
- 1
DuPont is bottom-quartile EPS growth vs peers over 3-, 10- and 20-year horizons
- 2
Axalta's EBITDA jumped 68% post-spin in the same year — DuPont carries $2-4bn of excess corporate costs
- 3
CEO Kullman sold 54% of her DuPont stock — she doesn't believe her own 'higher growth' strategy
Primary demands
- Elect Trian's four nominees (Peltz, Myers, Winkleblack, Zatta) to the DuPont board at the 2015 Annual Meeting
- Assess corporate structure — determine whether the existing portfolio can deliver best-in-class growth/margins or should be separated
- Eliminate $2-4bn of excess corporate costs and ensure Fresh Start productivity flows through to the bottom line
- Reassess capital allocation (R&D, capex, M&A) and return all excess free cash flow to shareholders with a 10% dividend CAGR
- Improve corporate governance, transparency, and compensation alignment; reject Chemours' entrenchment provisions
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Precedents cited
- Axalta (ex-DuPont Coatings) under Carlyle/Berkshire — EBITDA +150% post-spin
- Heinz (Trian board role, later acquired by 3G/Berkshire)
- Wendy's / Tim Hortons
- Ingersoll-Rand / Allegion spin
- Mondelez / Kraft Foods split
- Snapple turnaround (HBS case study N9-599-126)
- Kraft spin from Mondelez — shareholder-friendly governance template
- Time Inc. spin from Time Warner — governance template
- PayPal spin from eBay — governance template
- Triangle Industries / American National Can
Notable slides (6)
Notes
Filed as proxy presentation (DEFA14A exhibit c81061_ex-1) for DuPont's 2015 Annual Meeting. Campaign-defining deck in the most-watched activist proxy fight of the year; Trian nominated Peltz, Myers, Winkleblack, Zatta (Ed Garden as alternate). Custom 'DuPont Can Be Great' branding and microsite. Stake figure (2.7%) taken from slide 36's Trian track-record table — deck does not restate it explicitly on a dedicated slide. Thesis is primarily governance + operational + cost-cutting rather than breakup — Trian is expressly 'open-minded' on portfolio separation (slide 29) even though it diagnoses conglomerate complexity. Strong use of CEO-quote-contradiction (slide 29 'Rhetoric vs Reality'), before/after framing (Coatings/Axalta, slide 21), and peer-gap charts (slides 12-13, 16-17). Trian lost the proxy vote on 13 May 2015; Kullman stepped down later that year and the Dow-DuPont merger followed in December 2015 — outcome context (not in document).