Kullman's exit will still have some asking whether her fight with activist investor Nelson Peltz was worth it.

By Stephen Gandel
October 5, 2015

DuPont CEO Ellen Kullman, who had been at the chemical giant for nearly three decades, had ran it for nearly seven years, and had recently survived a brutal fight with an activist investor, decided to leave her job on her own, according to a source.

On Monday, DuPont DD announced that Kullman would be stepping down as CEO and leaving the company on October 16. A source close to the company said the decision to leave had been Kullman’s. But when the executive approached several board members, there seemed to be a mutual agreement that, after seven years at the helm, it was time for Kullman and the company to part ways. The decision was finalized as late as Thursday of last week.

The source said Kullman’s exit was not prompted by any ultimatum from activist investor Nelson Peltz, whose Trian Fund Management is a large DuPont shareholder and fought a bruising proxy battle to gain board seats with the company this spring. Kullman won that fight, but only narrowly, and it clearly left her bruised. Kullman told Fortune in April that having to fend off Peltz was the hardest thing she had had to do in her career. She felt many of the attacks Peltz and his team had lobbed at her were unfair, and it clearly pained her.

Read: How DuPont went to war with activist Nelson Peltz.

Kullman was the rare executive who decided to fight an activist investor all the way to a shareholder vote and was hailed for her victory. More and more executives have decided to settle with activists, giving them board seats or agreeing to other demands. On Monday, Nelson Peltz announced that he had taken a $2.5 billion stake in General Electric. GE CEO Jeffrey Immelt said he welcomed Peltz’s investment. Peltz has yet to ask for a board seat there.

 

The fact that Kullman is now out, less than five months after her victory, will cause many to think Kullman and DuPont might have been better off if she had struck a deal with Peltz. And if DuPont ends up splitting up or cutting research, as Peltz has suggested it should, it will once again fuel the debate over whether activist investors have too much power.

Kullman took over DuPont during the financial crisis, and she was praised for role in stabilizing the company after it was hit hard in the recession. But some criticized her for being too cautious. Kullman was set on selling off the company’s most cyclical divisions, to protect the company from another downturn. But some divisions she sold off, like DuPont’s coatings business Axalta, ended up being very profitable under new owners. Kullman’s recent problems are in part due to a weak global economy and were out of the CEO’s control.

Nevertheless, DuPont’s recent spinoff of its chemical division, Chemours, was supposed to highlight the strength of DuPont’s core businesses. Instead, after the spinoff, DuPont’s shares continued to slide. On the eve of reporting another disappointing quarter, Kullman decided it was time to go.

Board member and former Tyco CEO Ed Breen is taking over as interim CEO. But the source at the company said an outside executive search firm has been hired to look for a new CEO. Kullman decided it was best to leave the company before a replacement was picked to give the board the ability to chose one on its own. The source said the next CEO is likely to come from outside the company.

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