Hedge Funds

ADP CEO unleashes on Ackman, calling hedge fund activist trying to remove him a 'spoiled brat'

Key Points
  • ADP CEO Carlos Rodriguez tells CNBC that Bill Ackman reminds him of a "spoiled brat" who wants a schoolteacher to give him an extension.
  • Pershing Square took an 8 percent stake in ADP and has nominated three directors, including Ackman.
  • Rodriguez says Ackman "doesn't know what he's talking about" and hasn't shared any ideas yet for improving the payroll processor's business.
PRO Uncut: Carlos Rodriguez

The CEO of payroll processing company ADP on Thursday likened activist investor Bill Ackman's moves against his leadership to that of a "spoiled brat" who "doesn't know what he's talking about."

Carlos Rodriguez of Automatic Data Processing made his comments on CNBC after Ackman's Pershing Square took an 8 percent stake in the payroll company and nominated three people, including Ackman, to the ADP board. Rodriguez said Ackman had requested an extension to the nomination deadline, citing vacation plans and the fact that he "simply wasn't ready."

"It kind of reminds me a little bit of a spoiled brat in school asking the teacher for an extension for their homework," Rodriguez said on "Squawk on the Street" in an interview with David Faber.

Rodriguez said Ackman requested a 30- to 45-day extension on the nomination deadline, then revised it down to a week, but then added he might need more time after that.

ADP revealed last Friday that Ackman's Pershing Square Capital Management took an 8 percent stake in the company, mostly in derivatives.

Rodriguez said Ackman called him to lay out "a series of reasons why" Rodriguez should not be CEO.

"I honestly can't make heads or tails of what's going on," Rodriguez said. "What it feels like is I'm negotiating with someone about buying a used car. And this is not a used car. This is a company that has 58,000 employees, $50 billion market cap and a lot of shareholders that we have of responsibility toward."

Rodriguez said the company is in the process of scheduling a meeting with Ackman in "early September."

The two men attended Harvard together, but despite suggestions they may be friends, Rodriguez said he met Ackman "once, 31 years ago in college" and is not on "his holiday greeting card list as far as I can tell."

Last week, Omega Advisors Chairman and CEO Leon Cooperman, who served on ADP's board for two decades through 2012, told Ackman not to interfere with the payroll processor's operations. Rodriguez was named CEO in 2011.

"This is a quality management that has done a great job over many years for the shareholders," Cooperman wrote in an email to Ackman. The email was obtained by CNBC's Scott Wapner. "The idea that you can tell these guys how to run their business doesn't strike me as intelligent or appropriate."

Rodriguez said ADP was open to ideas Ackman had for improving the business, but noted that the activist's information so far seemed to come mostly from "disgruntled, former employees."

"I'm directly saying he doesn't know what he's talking about," Rodriguez told CNBC on Thursday. "Frankly we haven't heard any ideas yet because he wasn't ready to share his ideas, but should he have come up with something or stumbled on some kind of idea that would enhance the value of ADP, of course we're going to listen to him."

Shares of ADP came off session lows to trade about 0.3 percent lower at midday Thursday after the interview. Shares are down nearly 9 percent for the month.

In a statement Friday, ADP compared it six-year stock performance under Rodriguez to Pershing Square's hedge fund returns from 2012 to 2016.

"Since Carlos Rodriguez became CEO nearly six years ago, ADP's total shareholder return of 202% is well in excess of the S&P 500 TSR of 128% - and is many multiples of Pershing's TSR of 29%."

Ackman has stumbled recently with high-profile bets on Valeant Pharmaceuticals and Chipotle Mexican Grill.

— CNBC's Tae Kim and Angelica LaVito contributed to this report.

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