There are several delightful tidbits in this weekend’s FT interview with ADP CEO Carlos Rodriguez, who has been engaged in a bitter proxy fight with activist investor Bill ackman. For those who are familiar with the Pershing Square head, it will come as no surprise that he has long harbored megalomaniac tendencies. For everyone else, the following segment should be quite eye-opening.
As ADP chief executive Carlos Rodriguez recalls it, activist investor Bill Ackman told him he should step down the first time he spoke to him. The second time, he warned him there would be a public fight.
“He said: I know you don’t like the media, but I do and I’m really good at it,” Mr Rodriguez said. “And if this gets into a public battle, it’s going to be bad for you personally, it’s going to be bad for the company, but I’m fine with it because — and he said this — I’m told that I’m only second to Donald Trump in terms of number of clicks on the internet, and hence you will lose if there’s a public relations battle.”
It’s not clear what “clicks” Ackman was referring to: his official twitter account has 13.9K followers, and Ackman has tweeted a total of 9 times since joining Twitter this June. Perhaps Ackman has an inside look into google searches but we doubt that this is the smoking gun.
It gets better:
The fund manager also sought an extension of time from the board to nominate directors because he was going on holiday and needed more time to finish his presentation. According to Mr Rodriguez, Mr Ackman told him: “I can’t change my vacation plans. And by the way, even if I wasn’t going on vacation, my presentation isn’t ready. I haven’t finished the work,” he recalled.
“And I’m like: Well, OK. I’ll relay that back to the board.”
“The board had a discussion. The board said: Why in the world . . . and everyone’s scratching their heads like: Why would we grant an extension?” Mr Rodriguez said. “He’s had plenty of time. He’s had a whole year.”
We can therefore commiserate with Rodriguez’ summary of his Ackman interactions as “surreal”
Mr Rodriguez, who had never dealt with an activist campaign before Mr Ackman launched a proxy fight to win three seats on the board of the US HR and payroll processing company he runs, recounted in an interview the conversations that began in August this year, calling them “surreal”.
Perhaps the pressure finally got to bill – the stakes are certainly high: “Pershing Square has invested about 25 per cent of its funds in ADP, making the company its largest investment. The fund says that ADP can boost its profit margins by improving software and services, reducing operating costs and becoming more efficient.”
In any case, as the FT adds, “Ackman disputes Mr Rodriguez’s recollection of their conversations, and has publicly said he is willing to work with the ADP chief executive. ‘It’s disappointing that ADP continues to attack the messenger instead of addressing the important questions we have raised about ADP’s operational underperformance and its deteriorating competitive position.'”
As for attacking the messenger, there’s plenty to go around:
Mr Rodriguez is also critical of Mr Ackman’s record: after finishing 2016 down 9.6 per cent and 2015 down 16.2 per cent, his main fund is flat this year, though in 2014, he was up 36.9 per cent. In March this year, he apologised to investors over his disastrous investment in Valeant, which lost his funds about $4bn.
“Unfortunately, what he has left is destruction and chaos in his wake on a number of other companies that did not work out,” Mr Rodriguez said.
via http://ift.tt/2hYXvgr Tyler Durden