Bill Ackman, CEO of Pershing Square Capital, speaks at the Wall Street Journal Digital Conference in Laguna Beach, California, U.S., October 17, 2017. REUTERS/Mike Blake
October 19, 2017
By Svea Herbst-Bayliss
NEW YORK (Reuters) – Automatic Data Processing Inc is already making many of the changes activist shareholder William Ackman is advocating, but it will take time to see results, Chief Executive Officer Carlos Rodriguez said in an interview on Wednesday.
“We have a pretty good track record of being able to deliver good improvements in our own business without making massive one-time job cuts,” Rodriguez said.
He defended his six-year record at ADP and said Ackman’s proxy contest – through which the billionaire investor is seeking three board seats – is hurting the human resources software company.
After acquiring a stake in the company earlier this year, Ackman said he wanted ADP to become more efficient, slim down its real estate holdings and cut what he calls a bloated bureaucracy.
But Rodriguez said he and the board have been working on all of those things for years. Ackman’s request to pick up the pace on change could be dangerous to the company, which he characterized as important to the U.S. economy and millions of workers globally.
Ackman’s goals can only be achieved quickly by eliminating 20,000 of ADP’s 58,000 employees, Rodriguez said.
“His public potshots are not good for our associates, they are not good for the clients and they are not good for anyone,” said the CEO, who has a goal of improving margins by 500 basis points over the next three years.
A representative for Ackman did not immediately respond to a request for comment.
Shareholders will decide on Nov. 7 whether to back Ackman and his director candidates. ADP’s board has said his nominees bring no new ideas or skills to the table.
With the vote less than four weeks away, Rodriguez said “there is nothing I’d like more than for this to go away.”
(Reporting by Svea Herbst-Bayliss; Editing by Lauren Tara LaCapra and Lisa Shumaker)