Pershing Square, the hedge fund founded by well-known investor William Ackman, established a position in business services company ADP earlier this year.  Arguing that ADP was poorly managed–a problem Ackman said he could fix–he nominated himself and two associates for election to the board of directors of the firm.

Results of voting were released last week.  None of the three Pershing Square nominees were elected to the ADP board, despite Ackman being recommended by the three major shareholder advisory firms (the other Pershing Square nominees were recommended by two of the three).

Ackman has proclaimed this result as a victory for him, in that his nominees received about a quarter of the votes cast.

I’m not convinced.  Here’s why:

In early days of my career, institutional investors generally didn’t pay much attention to voting on corporate proposals. Generally, if they voted, they cast their ballots with management.  In the early 1990s, though, the SEC criticized the industry for this attitude and strongly reminded investment managers of their fiduciary obligation to study corporate issues carefully and vote their shares in the best interest of their customers.

I witnessed the early days of dealing with this new requirement.  Time had to be found for a meeting of all the portfolio managers who held a given stock. Consensus was very often hard to come by.   On the other hand, having having a money manager cast votes on both sides of an issue was at best a dubious proposition.  Lots of lawyers, both inside and outside counsel–none of whom had any clue about the relevant investment issues–had to get involved, as well.  A real mess.

Proxy solicitation firms saw a chance to radically transform their business.  They began to provide third-party voting advice, which was formulated by newly-hired teams of specialists in investment law.  These services were an instant hit.  Portfolio managers could get back to the work they knew best; investment management firms could rest easy, knowing that their taking advice from an objective third party would be a good  defense against any complaint they were not taking their fiduciary obligations seriously.

For at least the past twenty years, the policy of money management companies has been to follow the advice of firms like ISS, Glass Lewis and Egan-Jones, unless there are very strong reasons to do otherwise.  All three recommended that institutions vote to elect Ackman to the board.  Yet, despite the fact that institutions own 83% of ADP’s shares (according to Google Finance) neither Ackman nor the rest of his slate were elected.

This is not even a moral victory, in my eyes.  Just the opposite–it’s a surprisingly weak showing.  Of course,  the fact that the shares of JC Penney (JCP) are now trading below $3, can’t have helped.  JCP was another high-profile turnaround target of Pershing Square’s at $25 or so a few years ago,