E. I. du Pont de Nemours and Company DD
DuPont is a chronically underperforming conglomerate; electing Trian's four nominees forces structural review, cost cuts, and governance reform to unlock $120+/share by 2017 — a 21% IRR.
Thesis
DuPont has delivered bottom-quartile EPS growth versus every peer group over 5, 10 and 20 years, missed long-term targets repeatedly, and seen its unaffected stock price decline 11% over 16 years despite continual portfolio restructuring. Trian's diagnosis: DuPont is an over-complex conglomerate with $2-4bn of excess corporate costs (proven by the Axalta carve-out, where the same business added $229m of EBITDA under new owners), dilutive M&A like Danisco (margins down 33%), and uneconomic ROIC of 5.0% versus an 8.4% cost of capital on two-thirds of revenue. Electing four highly qualified nominees — Nelson Peltz, John Myers, Arthur Winkleblack, Robert Zatta — would close management's information advantage, end 'crony' compensation, fix Chemours' poor spin governance, and drive DuPont toward an implied $120+ share price by 2017, a 21% IRR.
SCQA
DuPont is a 200-year-old diversified industrial and chemicals conglomerate with seven segments, ~$35bn in revenue, and a Chemours spinoff in flight; it has restructured continuously since 1998.
Despite endless 'higher growth, higher value' rhetoric, EPS growth is bottom-quartile across every peer group and time horizon, margins lag peers in 5 of 7 segments, ROIC sits 40% below WACC, and the board lacks the information to hold management accountable.
Elect Trian's four nominees to the board to assess corporate structure (including separation), strip out $2-4bn of excess corporate costs, fix capital allocation, end 'crony' compensation, and rebuild governance — VOTE THE GOLD PROXY CARD.
Trian's Summary White Paper modeled an implied target value above $120 per share by year-end 2017 — a 21% internal rate of return for shareholders, with additional upside from $2-4bn of excess corporate costs.
The three reasons
- 1
DuPont's EPS growth is bottom-quartile vs every peer group over 5, 10 and 20 years
- 2
$2-4bn of excess corporate costs — Axalta proved DuPont was burdening Coatings with $229m of overhead
- 3
Conglomerate complexity and dilutive M&A (Danisco margins down 33%) require board-level intervention
Primary demands
- Elect Trian's four nominees (Nelson Peltz, John Myers, Arthur Winkleblack, Robert Zatta) to the DuPont board
- Assess corporate structure, including potential separation of the conglomerate portfolio
- Eliminate $2-4bn of excess corporate costs and ensure productivity savings flow through to the bottom line
- Reform capital allocation: cut value-destroying R&D, raise dividend, return more capital to shareholders
- Improve corporate governance, transparency of reporting, and alignment of executive compensation with performance
- Fix Chemours spinoff governance (staggered board, supermajority, anti-takeover provisions)
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Ellen Kullman (CEO) and Alexander...
Present
Present
Present
Present
—
Yes
Yes
Yes
Active
4/5
N:5 V:4
Precedents cited
- Axalta / Coatings carve-out (DuPont sold Coatings in 2012; same business EBITDA grew 150% under new owners)
- Heinz transformation (Trian board engagement, 2006-2013)
- Snapple turnaround (Harvard Business School case study)
- Triangle Industries / American National Can (Peltz built Fortune 100 industrial)
- Family Dollar board defense and sale to Dollar Tree
- Ingersoll-Rand / Allegion spin
- Mondelez / Kraft, Time Inc / Time Warner, PayPal / eBay, Gannett (good-governance spin precedents)
Notable slides (6)
Notes
Quintessential proxy-fight investor deck and arguably the most-studied activist campaign of the 2010s. Strong SCQA spine: opens with proxy advisor endorsement and GOLD card branding, builds through underperformance evidence (peer gap charts on multiple horizons), diagnoses root causes (conglomerate complexity, dilutive M&A, excess costs), then closes with governance reform and 'DuPont Can Be Great.' Page 24 (Axalta carve-out) is a standout 'before/after via comp' rhetorical device. Page 33 (Rhetoric vs Reality) is a clean two-column CEO-quote-contradiction format. Page 35 (nine versions of 2011 EPS) is a memorable accountability gotcha. Author attributed to Nelson Peltz as Trian CEO and lead nominee. Stake of 2.7% taken from page 41 TSR table. Outcome (filled later): Trian narrowly lost the May 2015 proxy vote but Kullman resigned in October 2015; the Dow-DuPont merger and subsequent three-way split followed in 2017 — effectively executing Trian's breakup thesis.