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DuPont beats Peltz, but did anyone win?

After a months-long proxy fight with activist investor Nelson Peltz, DuPont (DD) is claiming victory.

Peltz’s Trian Partners is admitting that shareholders at the chemical giant’s annual meeting rejected an effort to place Peltz and three others on the board.

Peltz and Trian led a spirited campaign against CEO Ellen Kullman and the board, claiming DuPont has been under-performing and needs new direction. Kullman pushed back, saying her firm has put in a solid performance…and today’s decision confirmed that.

“We are pleased with the outcome of the vote and especially appreciate the strong expressions of support from so many of our shareholders for our strategic transformation and the continued execution of our plan.”

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But Wall Street didn’t agree-- DuPont shares sinking on news of the Peltz defeat. And as Yahoo Finance Editor-in-Chief Andy Serwer points out, that downward move puts the stock basically even with the performance of the S&P 500 (^GSPC).

“It’s crazy because Peltz came in about two years ago and since then the stock has outperformed the market, which is why I think he ultimately was unsuccessful-- why do you want to unseat the current management and board if the stock is doing OK,” he explains. “But now that he’s defeated the stock took a big hit today and so you’re basically matching the market. That is not outperformance and that’s not what shareholders want.”

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Carol Pepper, founder of personal wealth advisory firm Pepper International, says despite the negative Wall Street reaction to the vote, DuPont still comes up on top because Peltz’s plan to boost the company’s value wasn’t a winning formula.

"DuPont’s management team won for good reasons,” she argues. “People didn’t want to see it broken up, over-levered. That’s sort of old school and that really doesn’t work in this market today.”

Dupont is a rare loss for Peltz, but as Serwer points out, the company took steps to steal some of his thunder ahead of the vote.

“Nelson Peltz has been around the block many, many times and he is good at what he does, rattling the cages,” he says. “He’s done it at Snapple (DPS), Wendy’s (WEN), Kraft (KRFT). But people are kind of hip to his game so you kind of pre-empt it by doing a lot of this stuff yourself.”

Serwer notes it’s not rocket science for management to figure out how to win a proxy fight…but the tough part is in the execution.

“The real best way to battle these guys is not have your stock undervalued,” he says. “And when they come, do everything you can-- not leveraging the company’s future and throwing away cash willy-nilly-- to make the company perform on the short-term and set it up for the long-term, too.”

But Serwer adds that task takes its toll on corporate executives.

“I spent some time with Ellen Kullman over the past couple of years, this weighed extremely heavily on her,” he explains. “She was battling Nelson 24/7.”

And the fight may still not be over. In its concession note, Trian says:

“Regardless of the voting results, we believe that going forward, DuPont stockholders will be less tolerant of continued missed earnings guidance, extraordinary charges, value-destructive acquisitions and divestitures, executive compensation that is not aligned with performance, and operating metrics such as revenue growth and margins that fail to meet DuPont’s own targets. We will continue to closely monitor DuPont’s performance.”

Stay tuned.

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