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ADP in Proxy Fight with Investor

William Ackman, Pershing Square Capital ManagementADP is in proxy fight after the payroll services company, refusing this week to nominate three candidates for the board of directors submitted by Pershing Square Capital Management. The board unanimously rejected the group's candidates saying the rivals do not bring additional skill or experience to the board.

Pershing, led by activist investor William Ackman, had also asked ADP to extend the nomination process so it could name two additional candidates.

In a recent conference call, Ackman pointed to what he said were problems with Employer Services, ADP's payroll operations. "This is two-thirds of the profit of the business. It is materially underperforming its competitors in its potential," Ackman said.

Ackman went through an extensive discussion of the problems he sees with ADP. In particular, he noted, "We think ADP's back-end infrastructure remains quite disjointed, dated, and inefficient which somewhat limits the product capabilities, frankly, and makes it hard for the company to really provide world-class products."
He also faulted ADP for the way it integrates acquisitions.

John P. Jones, the company's non-executive chairman, said Pershing's choices would not represent an improvement.

"Unlike Mr. Ackman's nominees, ADP's directors have a deep understanding and appreciation of the current state of ADP's business and its clients, and what it takes to successfully execute on our 'All in on HCM' strategy," Jones said in a prepared statement.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
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