Tuesday, February 10, 2015

The Most Egotistical of All the Activist Investors

While I would broadly claim that activist investors, with their penchant for running media campaigns putting themselves at the center of attention (and not the supposed problems with their targeted company), are egotistical, Nelson Peltz of Trian Management has raised the bar to a new level. You may recall from a month ago that Peltz took a small position in DuPont and started demanding changes, including having 4 of his directors put on DuPont's Board of Directors. One of the initial recommendations was Peltz himself. Fine, whatever. But that actually now appears to have been not only a request, but his highest demand. DuPont met with Peltz and agreed to let him have a director on the board, as long as it wasn't Peltz. No deal! Peltz insisted that he be the director or he was going to go home and hold his breath. Such an ego! What is so special in the little brain of this guy that he and he alone has to communicate it?

DuPont was quite fine to let him storm off as they immediately afterwards added 2 directors of their own choosing. Geesh Nelson, you could have had 1, but now you have nothing, and the board is that much bigger and more loaded with people favorable to the current management, so that you can even could consider that as a -2, meaning that the score for you suddenly swung by -3 in your direction. And you think you know how to run a company?

Esteemed fellow blogger Chemjobber pointed out to me a couple 1 and 2 articles in the Economist that give an alternate perspective of activist investors. They are well written and do provide an alternative perspective, but I'm having none of it because the articles tacitly assume that all this activism is unquestionably good and that these are good individuals that know what they are doing. Huh? So if you are an activist investor you are automatically qualified as competent? No other field on earth makes that claim. There are bad doctors, lawyers, cops, engineers, chemists, CEOs, teachers, professors, janitors, receptionists, salespeople, actors, singers, athletes and so forth, but bad activist investors? No, they are all quite skilled at their jobs.

Previous Years
February 10, 2012 - Birds and Gels and Arsenic

February 10, 2012 - A Sign Your Oven Might Not Be Working Properly

February 10, 2010 - Valentine's Day is Coming...


Chemjobber said...

I should point out here that it was an esteemed reader of mine who sent me the articles!

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