E.I. du Pont de Nemours and Company DD
DuPont is a bloated conglomerate hiding $2-4bn of excess corporate costs and crony compensation; Trian's board nominees can unlock $120/share by 2017 — a 21% IRR.
Thesis
Trian argues DuPont under CEO Ellen Kullman is an underperforming conglomerate whose recent stock rally has been driven by activist pressure rather than fundamentals — EPS remains below 2011 levels and 44% of sales sit in low-growth segments. Excess corporate costs burden the portfolio by an estimated $2-4 billion, as proven by the Coatings/Axalta carveout where EBITDA jumped 68% the moment the business left DuPont and 150% by 2014 under private-equity ownership. Management compensation paid 113% of LTIP target despite bottom-quartile TSR, agriculture R&D has yielded negative returns including a $1bn Monsanto patent verdict, and the CEO herself sold 54% of her stock after Trian invested. Trian's Summary White Paper implies a $120 share price by end-2017, a 21% IRR, assuming a 9.9x blended NTM EBITDA multiple, peer-aligned margins, 2x leverage, and return of excess free cash flow — with further upside from removing corporate waste.
SCQA
DuPont is a diversified industrial conglomerate spanning Agriculture, Nutrition & Health, Industrial Biosciences, Performance Materials, Safety & Protection, and Electronics & Communications — a sprawling portfolio held together by a heavy corporate center.
EPS sits below 2011 levels, 44% of sales are in zero-growth segments, the Coatings/Axalta spin proved DuPont loaded $229m of excess costs onto one unit alone, and the Board rewards management despite 25th-percentile TSR.
Vote the GOLD proxy card to elect Trian's four nominees, enforce best-in-class margins, strip out the estimated $2-4bn of excess corporate costs, reform compensation, and return excess free cash flow via a 10% dividend CAGR.
Trian's model implies a $120 share price by year-end 2017 — roughly a 21% IRR from current levels — with further upside as the $2-4bn of excess corporate costs is removed from the cost base.
The three reasons
- 1
DuPont carries $2-4bn of excess corporate costs — Coatings EBITDA jumped >150% under new owners (Axalta)
- 2
44% of sales sit in low-growth segments; recent share-price strength driven by Trian, not fundamentals
- 3
Management paid 113% LTIP payout despite 25th-percentile TSR, and CEO sold 54% of her stock after Trian invested
Primary demands
- Elect Trian's four nominees to DuPont's Board via the GOLD proxy card
- Eliminate $2-4bn of excess corporate costs across the portfolio
- Achieve best-in-class operating performance with peer-aligned revenue growth and margins
- Maintain 2x net debt/EBITDA with investment-grade rating and return all excess free cash flow to shareholders
- Grow the dividend at 10% CAGR
- Reform compensation practices that reward management despite bottom-quartile TSR
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Precedents cited
- DuPont's own Coatings / Axalta carveout (EBITDA jumped 68% as-reported, 150% by 2014 under new owners)
Notable slides (5)
Notes
Proxy-fight materials prepared for the 13D Monitor (Ken Squire's activist investing service) ahead of DuPont's 2015 Annual Meeting. Every page carries the 'VOTE THE GOLD PROXY CARD' footer banner — a hallmark of active solicitation. References Trian's prior September 2014 Summary White Paper and February 2015 'Referendum on Performance and Accountability' presentation (DuPontCanBeGreat.com). Slide 5 is a single red '?' over 'Management's Plan For DuPont' — a memorable rhetorical blank-slide device. Slide 10 (Axalta/Coatings case study) is the strongest piece of evidence and visual storytelling — a three-panel before/after/after comparison proving the 'excess corporate costs' thesis. No stake % disclosed in this particular document. Campaign outcome in May 2015: Trian narrowly lost the proxy fight, though DuPont later split into three companies (Dow-DuPont merger) — a de facto vindication of the breakup thesis.