UPDATE 1-DuPont CEO Ellen Kullman to retire

6 Oct 2015 | Author: | No comments yet »

After-hours buzz: Illumina, DuPont, Container Store & more.

DOVER, Del. – The DuPont Co. on Monday announced that CEO and Chairwoman Ellen Kullman, who earlier this year fought off a bruising challenge from a major activist investor, will retire at the end of next week.Despite lowering its full-year earnings outlook, DuPont shares popped in after hours trading as the company said its chief executive will retire next week. The maker of everything from Pioneer agricultural seeds to Kevlar fabric also lowered its profit forecast and said it is accelerating its cost-cutting plan. Edward Breen, who was named to DuPont’s board in February, will serve as Kullman’s interim replacement while the company searches for a permanent successor.

She’s recently sparred with Nelson Peltz, the billionaire activist investor, who had been pushing for the break up of the blue-chip company and for seats on the company’s board. Shares of health technology firm Illumina plunged 15 percent in extended trading after the company projected lower-than-expected revenue for the third and fourth quarters.

The final months of her tenure were marked by the battle with activist investor and major shareholder Nelson Peltz, whose Trian Fund had sought more influence at DuPont, saying that the company was falling short of its potential. General Mills shares inched lower after the packaged-goods producers recalled 1.8 million boxes of gluten-free Cheerios cereal because they could contain an undisclosed allergen — wheat. The board plans on hiring an executive recruitment agency to help find a new chief. “…With a strong foundation in place now is the right time for a new leader to continue to drive the pace of change to capitalize fully on the opportunity ahead,” Ms Kullman said. Peltz and his investment firm, Trian Fund Management, fought a rare public battle against DuPont, the 213-year-old chemical manufacturer and maker of Kevlar and Teflon. Trian, insisting that DuPont needed change because it had repeatedly missed financial targets and still carried plenty of costs worth cutting, sought four board seats.

Many corporate boards in recent years have sought to settle with activists, aware of such investors’ growing appeal with mutual funds and other shareholders. Kullman took the unusual step of digging in and fighting against one of Wall Street’s best-known corporate dissidents, who has often gained board seats and prompted change without picking a public fight. But even those close to the company conceded that the investor base included a larger-than-normal group of individual investors, who largely back management teams. “As our chair and C.E.O., Ellen led DuPont through the global recession and the dramatic transformation of the last several years with the highest standard of integrity and commitment,” Alexander Cutler, DuPont’s lead independent director, said in a statement. Kullman’s departure, DuPont conceded that it had yet again fallen short, this time blaming the strength of the United States dollar and a weakening of agricultural markets in Brazil and other areas that reduced demand.

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