Automatic Data Processing (ADP) ADP
ADP has delivered 203% TSR under CEO Rodriguez; Pershing Square owns just 2% of common stock and its nominees lack the HCM and technology experience to improve on this trajectory.
Thesis
ADP defends against Pershing Square's 2017 proxy contest by arguing that under CEO Carlos Rodriguez the company has delivered 203% total shareholder return, outpacing the S&P 500, HCM peers and Pershing Square's own fund. Management contends it has already executed the transformation Ackman demands: 580bps of net operational margin expansion since FY11, 7% revenue CAGR, $11.3B returned to shareholders, and divestiture of $5B of non-HCM revenue (Broadridge, CDK Global). The rebuttal exposes that Pershing Square actually owns just 2.0% of common stock, not the 8.3% it has publicly claimed (the balance is unvoteable call options). It then attacks Pershing's three nominees as having no HCM or technology experience and warns shareholders by spotlighting Ackman's recent disasters at Valeant (-94% TSR), Borders (-99%), JCPenney (-57%) and Target (-42%).
SCQA
ADP is the global leader in Human Capital Management — ~700K clients across 110+ countries, $12B FY17 revenue, 42 consecutive years of dividend increases — led by CEO Carlos Rodriguez since November 2011.
Pershing Square has launched a last-minute proxy contest seeking three board seats based on a thesis ADP claims misunderstands its pass-through-driven margins, while misrepresenting an 8.3% stake that is actually only 2.0% common stock.
Shareholders should vote the WHITE proxy card to re-elect all of ADP's incumbent directors and reject Pershing Square's three nominees, who lack HCM and technology experience and would derail a working transformation.
Continued execution of the existing strategy targets 7-9% revenue growth and ~500bps of operational margin expansion through FY20, extending the 203% TSR under Rodriguez that has already outperformed the S&P 500 and HCM peers.
The three reasons
- 1
ADP delivered 203% TSR under CEO Rodriguez, beating S&P 500 and HCM peers across every time period
- 2
Pershing actually owns just 2.0% of common stock, not the 8.3% it publicly claims (rest is unvoteable call options)
- 3
Pershing's nominees have zero HCM/tech experience; Ackman's recent campaigns destroyed value at Valeant, Borders, JCPenney, Target
Primary demands
- Vote the WHITE proxy card for all of ADP's incumbent director nominees
- Reject Pershing Square's three director nominees (Bill Ackman, Veronica Hagen, V. Paul Unruh)
- Allow management to continue executing its existing HCM transformation strategy
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Precedents cited
- Pershing Square at Valeant (-94% TSR, 2015-2017)
- Pershing Square at Borders / Barnes & Noble (-99% TSR, 2007-2011)
- Pershing Square at JCPenney (-57% TSR, 2010-2013)
- Pershing Square at Target (-42% TSR, 2007-2009)
- ADP prior divestitures: Broadridge spin (FY07), CDK Global tax-free spin (FY15)
Notable slides (6)
Notes
Misfiled in 06_Trian_Partners — this deck is ADP management's defense against Pershing Square's 2017 proxy contest, not Trian-related material. Nelson Peltz/Trian had no disclosed involvement. Classic management-response playbook: lead with TSR brag, demonstrate governance hygiene, expose activist's misrepresentation of stake (2.0% common vs claimed 8.3%), turn the activist's own track record into anti-precedents (Valeant/Borders/JCP/Target charts), and marshal sell-side analyst quotes (JPM/Morningstar/Evercore/Baird) supporting management. Useful specimen for studying corporate defense rhetoric. Outcome: ADP won the proxy fight in November 2017; Ackman's nominees were defeated.