Pershing Square reacts to termination of Ceridian's termination of supposed whistle-blower

By Lisa Kerner

Charlotte, N.C., May 14 - Ceridian Corp. investor Pershing Square Capital Management, LP is "disappointed but not surprised" that the company terminated Gary Krow, president of its Comdata division, for disclosing confidential information to Pershing Square, a claim the investor denies.

"Ceridian's board continues a pattern of punishing whistleblowers for their alleged insubordination," according to a schedule 13D filing with the Securities and Exchange Commission.

Like former chief financial officer Doug Neve, Krow criticized the company's former chairman and chief executive officer Ronald Turner in a letter to the board, the filing stated.

"While the board of Ceridian perhaps wishes that neither Mr. Krow nor Mr. Neve had written letters criticizing senior management, we believe that Messrs. Krow and Neve were acting in the best interests of Ceridian and its shareholders when they did so," Pershing Square said.

"To this day, we have not obtained copies of the letters. At no time during the meeting with Mr. Krow or otherwise did Mr. Krow or his representatives disclose confidential company information to Pershing or its representatives concerning Ceridian, Comdata, or any of their affiliates."

The investor also noted that Ceridian has yet to set a record or meeting date even though the anniversary of the meeting has passed. "It is a practical impossibility for Ceridian to meet the Delaware law requirement of holding its meeting by June 11, 2007. Ceridian should immediately announce the date of its annual meeting so its shareholders may exercise their right to choose the board they wish to govern the company," Pershing Square added. .

On March 13, Pershing Square said it was disappointed that Neve resigned effective March 8 and credited the former CFO with re-staffing and rebuilding Ceridian's finance and accounting organization, restoring investor confidence and driving the margin improvement program in the company's human resource solutions division.

According to a previous SEC filing, Pershing Square reacted to news that Macfarlane, formerly with General Electric WMC Mortgage, was named Ceridian's new chief financial officer.

"We are puzzled by the board's appointment of a division-level finance executive as CFO, supporting a chief executive officer who similarly lacks public company experience," Pershing Square's William A. Ackerman added. "We need to better understand how the company's compensation and human resources committee concluded that this was the right hire at this time, and how the search - if any - was conducted."

Ackerman said that Ceridian's board "has a uniquely undistinguished track record managing the company's executive ranks."

In addition to Macfarlane, a number of former General Electric employees are now at Ceridian, including chief executive officer Katheryn V. Marinello, executive vice president of human resource Kairus K. Tarapore and Michael Shea, executive vice president of quality and service.

Pershing Square owns 20,532,734 shares, or 14.3%, of the Minneapolis information services company's outstanding stock.

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