Jeff Mordock, The News Journal Pension funds California Public Employees Retirement System, or CalPERS, and the Canadian Pension Plan Investment Board, or CPPIB, voted for all 12 of DuPont's board of director nominees.
Trian, a New York hedge fund led by Nelson Peltz, launched a proxy contest in January to gain four of the 12 seats on DuPont's board. The company has opposed the Trian nominees claiming their plan to reduce costs and increase leverage would be "value destructive."
CalPERS, which manages the pension and health benefits for roughly 1.6 million California public employees, owns 6.15 million shares of DuPont stock. CPPIB performs similar services for 18 million Canadian residents and has 1 million DuPont shares.
"We believe the Trian focus is relatively short term with proposed financial measures which include cost cutting, which would reduce research and development," CalPERS said in a released statement explaining its vote. "The case for further disaggregation of the business is unclear. We note the board had agreed its Fresh State refocus and cost cutting plan before Trian launched their campaign and that company is delivering on this."
The Sacramento, California-based pension fund also criticized Train for refusing to reach a compromise with DuPont before the shareholder vote.
"We also note that DuPont made efforts to settle this matter by offering a board seat to one of the Trian nominees, and this was rejected," CalPERS said.
In February, Peltz met with DuPont Chief Executive Officer Ellen Kullman and Lead Independent Director Alexander "Sandy" Cutler. The sides discussed a potential compromise in which DuPont would support Trian nominee and former GE Asset Management Chief Executive Officer John Myers if Trian endorsed 11 of the company's candidates. DuPont officials said Peltz walked away from the agreement because the company would not select him as the potential compromise candidate.
CPBB did not issue a statement detailing the reasons for its vote.
Dan Turner, a DuPont spokesman released a statement praising CalPERS' actions.
"We are pleased CalPERS supports the election of all DuPont nominees and gratified by their vote of confidence in our strategy, our progress, and our performance. The Board and management are confident that we have the right strategy and team to continue to grow value for our shareholders and remain committed to executing on our transformation."
A Trian spokeswoman did not respond to requests for comment.
Calpers and CPBB are the first pension fund to announce their votes for DuPont's board. It is not known if the chemical giant's two largest shareholders, Vanguard Group Inc. and State Street Corp., which own 50 million and 44 million shares, respectively, will publicly reveal their votes.
Contact Jeff Mordock at (302) 324-2786, on Twitter @JeffMordockTNJ or jmordock@delawareonline.com.
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