(Repeats story published Wednesday with no changes)
By Svea Herbst-Bayliss
BOSTON, Oct 26 (Reuters) - Proxy advisory firm ISS on Wednesday recommended that shareholders largely vote for directors recommended by the board of Automatic Data Processing Inc, but also supported the election of hedge fund manager William Ackman.
While ISS said Ackman failed to make the case to replace three directors, it was complimentary about the skills the billionaire investor would bring to the boardroom and suggested electing him by withholding votes for ADP incumbent director Eric Fast.
ISS is the third influential proxy firm to release its report this week on the vote and ISS broke with Glass Lewis and Egan-Jones which both supported all three of Ackman’s proposed directors.
“ADP does not seem to be a company in need of major course correction,” ISS analysts wrote in their report.
“Dissident nominee Ackman would bring a strong understanding of the company, with the resources and analytical ability that his firm has demonstrated while digging deeply into ADP’s business, asking valid questions, presenting detailed data, and proposing solutions,” the report said.
ISS recommended shareholders withhold their votes for incumbent ADP director Fast, who chairs the audit committee, blaming him for some of the company’s “opaque” disclosures.
“We are pleased that ISS recognizes the serious issues and significant opportunities for improvement at ADP and recommends shareholders support my election to the board,” Ackman said in a statement.
Since August the human-resources software company has been embroiled in a fight with Ackman’s Pershing Square over ADP’s future. Ackman has criticized it for being inefficient while the company has said it is already working on improvements.
ADP’s share price has climbed 4 percent since early August when Ackman’s involvement in the company became known.
“The support of ISS validates our strong belief that ADP has the right strategy and board in place to continue delivering value for our clients, employees, stockholders, and the 40 million people globally who rely on our services,” ADP Chairman John Jones said in a statement.
Pershing Square is seeking to replace the three longest serving directors: Jones, Fast and Glenn Hubbard. It is backing Ackman, Veronica Hagen and Paul Unruh. ISS wrote that Hagen and Unruh “also appear to be credible candidates.”
Both sides are crisscrossing the country to line up support from investors ahead of the Nov. 7 vote.
Ackman’s firm has an 8.3 percent economic stake of which 2.0 percent are in common shares. He can vote only the common shares.
Reporting by Svea Herbst-Bayliss; Editing by Leslie Adler and Lisa Shumaker