Editor’s Note: The following is an opinion by former Representative Thomas B. Evans, Jr.
The direction of DuPont and similar companies may well be resolved on May 13 at the annual meeting of the DuPont Company. There are some stockholders – and particularly those represented by hedge fund managers – who look only for maximum return on this investment, mostly in the short term. They even minimize important elements like research.
Others believe that employees and the greater community in Delaware, as well as dozens of other locations in America and overseas, where DuPont operations are located, should be the high priority.
Those who look solely at monetary value to shareholders over the short term are misdirected. Nelson Peltz falls in this category. Peltz and his investment company, Trian, are trying to gain seats on the DuPont board of directors and make management changes to boost stockholder value.
However, by not also placing a priority on employees and the greater community, the proposed changes will not be as successful on the DuPont earnings front – Peltz’s highest priority for the company.
It is a misdirected approach and one that “stinks of greed.” Not only are Peltz and others like him harmful to companies, but they do not serve our free enterprise system well in the long run.
Adam Smith, the guru of our capitalistic system, said several hundred years ago that too much greed would destroy our free enterprise system.
Compensating employees reasonably and with a fair relationship to the value they bring the company is the proper way to proceed. It increases productivity and adds to the bottom line. In too many situations, CEOs make 200 hundred times and more than the average worker does. This destroys the spirit of a company and negatively affects its earnings.
Finally, corporations like DuPont have contributed enormously in making their communities a better place to live. I have seen this personally in Old Hickory, Tenn. (a DuPont Rayon plant); Seaford (the Nylon Capital of the World); and the worldwide headquarters in Wilmington.
My father, Tom Evans Sr., worked at all three places as an engineer.
The DuPont Company sponsored golf clubs at these locations and they contributed substantially to a more enjoyable life for employees and their families. (The amount paid for membership was made affordable for all employees.)
Employees of DuPont were also encouraged to become involved in their community and in the war effort during World War II.
There may be no immediate measurable impact on quarterly earnings for this philosophy, but in time, it creates a real team effort. As a result, there is tremendous value for our country, the community and employees of DuPont, as well as the stockholders.
That value should not be understated.
Thomas B. Evans, Jr., represented Delaware in the U.S. House of Representatives from 1977 to 1983.
This column first appeared in the News Journal.