Trian Fund Management, investment vehicle of DuPont activist shareholder Nelson Peltz, which currently owns shares in the chemical giant worth around $1.8 billion, has urged the other shareholders to hold the company's board of directors and management accountable for its "consistent underperformance" and "protect their investment" by voting to elect Trian's candidates Peltz, John H. Myers, Arthur B. Winkleblack and Robert J. Zatta to the DuPont board at the annual general meeting on May 13.

Myer is a former CEO of GE Asset Management, Winklebach a former executive vice president and CFO of H.J. Heinz Company, Zatta a former acting CEO and long-time CFO of Rockwood Holdings.

Trian says DuPont is attempting to "distract and mislead" shareholders from the company's "real issues" - which Peltz and the fund see as "a consistently subpar performance and lack of confidence in the company's future."

To illustrate the perceived lack of confidence on the part of DuPont's management, the fund says CEO Ellen Kullman "seems to believe DuPont's shares will be worth no more than $72 per share in 2017 as she exercised options and sold over half of her equity position" - worth about $80 million - at prices of $72 or less after Trian first invested. Most of these options did not expire until 2016 or 2017," it contends.

Trian says the fund, on the other hand, believes that, with its nominees on the board, "DuPont's implied target value per share could be in excess of $120 by the end of 2017."

In its own letter urging shareholders to vote for its candidates for director - including former LyondellBasell CEO Jim Gallogly and Edward Breen, former CEO of Tyco International, both appointed earlier this year - DuPont said it has "delivered total shareholder returns of 266% over the past six years, outperforming both the S&P 500 and the company's proxy peers."

"Importantly," DuPont says, the growth of its continuing businesses after the spin-off of its Performance Chemicals businesses into the new Chemours "demonstrates the strength of the next generation DuPont and shows that our plan is working.

"Despite this proven track record, DuPont continues, "Trian Fund Management seeks to replace four of your highly accomplished directors with nominees who do not have the relevant skills, expertise, or experience possessed by the directors they seek to replace."

The DuPont letter also contains statements by Gallogly and Breen, revealing that they had been approached by Trian to join the fund's dissident slate. "It was clear they wanted a director who would push Trian's agenda to break up the company," Gallogly says, asserting that, "I didn't agree with that."
"Trian's plan to break up and add leverage to DuPont is part of the playbook that they've applied to companies in other industries, and it has produced negative results outside their core competency," Breen says.

The chemical group accuses Trian of "attempting to dismantle the leadership of the board and remove the chairs of several key committees in an effort to advance their agenda and thwart DuPont's strategy and introduce ‘a high-risk, value-destructive agenda' that is not in the best interests of shareholders."