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A Quick P.S. On The Much-Watched Dust-Up With Activist Investors at DuPont

Another Of The Optimizer’s Governance Predictions Comes Through… In A Flash

As we predicted in our last issue (which we labeled our “Bad Advice Issue” in light of the many such examples described therein) “The incumbent directors - and most especially the CEO …won’t be allowed to survive a failure to turn the rapidly receding economic tides mighty fast.”

In one short quarter following her reelection - and her much heralded ‘big win’ - both in her adamant refusal to consider Trian’s Nelson Peltz as a nominee AND vs. the three Trian nominees that were ultimately on the ballot - CEO Ellen Kullman was gone in a flash, when DuPont lowered projected profits from $3.10 a share to $2.75. To totally ice the cake, the spun-off Chemours company - where we and many other investors were already incensed by the impossible 80% threshold that was required in the bylaws to change the bylaws - had to slash the dividend DuPont had assigned to it and saw its stock price fall by 64% in the quarter. DuPont stock - which was down 27% for the year (after losing 7% when Trian lost the vote) – rose 5.6% on the news. More news on the director front still to come, we predict.

We asked a good friend - who we know was in the thick of the DuPont/Trian negotiations - how such an intelligent, seemingly savvy and previously successful CEO could have been so intransigent about refusing to add Peltz to the board, which, we both agreed, would have saved the day for her, at least for a while. “Incredibly bad advice” said he…