Among practitioners, it is a customary cliché to say that all proxy contests—just like all trials—are unique and idiosyncratic. There is some truth to that easy generalization, but it also misses the forest for the trees. Some obvious truths stand out in the recent battle between Trian Fund Management and DuPont that will apply to future contests:

What Explains DuPont’s Victory? DuPont won only a narrow victory, despite enormous advantages. Press accounts have reported that DuPont won 52 percent of the vote. This close margin may seem surprising, given (1) DuPont’s very large market capitalization (over $68 billion), (2) DuPont’s very successful recent performance (it has beaten the return on the S&P 500 index for a number of years); and (3) DuPont’s large retail ownership (over 30 percent, which shareholders usually support management). Add to this the further fact that DuPont’s CEO (Ellen Kullman) ably portrayed herself an “agent of change,” responsive to shareholder concerns, rather that the defender of a Maginot Line. Early on, she agreed to spin off DuPont’s major chemical division (now called Chemours). Finally, Trian Fund did not own that much stock (only about 2.7 percent). All in all, this was the largest public company ever subjected to a proxy fight for board seats. Hence, the question lingers: Given DuPont’s size, success, and flexibility, and the absence of any “wolf pack” with a sizeable stake, why was the margin of victory so close?

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