DuPont Adopts Poison Pill

The purchase of a small but growing stake by Trian Fund Management, an investment firm run by activist shareholder Nelson Peltz, has apparently alarmed DuPont brass enough for them to take measures against a hostile takeover. DuPont adopted a severance plan mandating that in the event of a change in control of the firm, top managers will get a lump sum payment of twice their annual salaries and bonuses should they be terminated. DuPont CEO Ellen J. Kullman will get three times her annual compensation. In addition to this “golden parachute” provision, the firm has changed its bylaws to make it more difficult to nominate new directors to the company. DuPont is the second major chemical firm to adopt a “poison pill” measure recently. Late last month, Air Products & Chemicals enacted similar provisions when Pershing Square Capital Management amassed a 9.8% stake.