ADP CEO: Bill Ackman is a few years late with his ideas for us
The largest payroll processor in the world, Automatic Data Processing (ADP), is responsible for paying one out of six of workers in the US. But the company has been making headlines recently because it’s fighting a proxy battle by activist Bill Ackman.
But ADP CEO Carlos Rodriguez told Yahoo Finance he agrees about many of Ackman’s pushes for change.
“We probably agree on a lot of different things from a thematic standpoint: The need to transform our technology at ADP, the need to be efficient, to improve margins,” Rodriguez said. “But a lot of the information that he gathered, I think as a result of not talking to the company directly, led him to some conclusions that really were incorrect.”
However, Rodriguez emphasized that Ackman’s inclusion on ADP’s board of directors would be a negative.
“We have a very strong, independent board with all the skills necessary — including technology experience — for what the strategy of the company is,” he said.
He added that ADP is already undergoing the key initiatives Ackman is emphasizing.
“What I would say is that maybe he’s a few years late in terms of the ideas that he has, because the board and the management team have been working on the technology transformation, on margin improvement, on consolidating our footprint — a lot of the things that Bill has observed that I think are important for any company to do.”
‘Size isn’t necessarily an impediment to success’
And as Ackman pushes for a 1200 basis point margin improvement, Rodriguez highlighted the 580 basis point improvement since 2011, with another 500 basis point expansion expected by 2020.
Rodriguez highlighted the company’s focus on research and development, on which the company spends $800 million annually, and innovation labs, including 1,000 employees working on next-generation technology.
ADP CEO Carlos Rodriguez discusses the company’s proxy battle with activist Bill Ackman
“Today we have 83% of our clients on our new cloud technology … We have the number one mobile application in the human capital management space, we have data and analytic solutions that we’ve put out for our clients … We are believers in the transformation of technology and we are adopters of it,” Rodriguez said.
Rodriguez also defended the company’s large size against attacks by Ackman, who has called ADP a “lethargic and inefficient sleeping giant.”
“Size doesn’t have to bring with it bureaucracy,” Rodriguez said. “There are lots of other very large companies that are nimble and that are still creative and are still growing, like ADP, prove that size isn’t necessarily an impediment to success.”
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Nicole Sinclair is markets correspondent at Yahoo Finance
For more on Yahoo Finance’s interview with ADP’s CEO, please see:
ADP CEO on proxy battle: ‘It’s really about growing the top line’
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