Automatic Data Processing Inc. rejected activist investor BillAckman's nominees for the board of directors, saying his candidatesare no improvement on the current board and setting the stage for aproxy battle at the payroll and human resources outsourcingprovider.

ADP will instead nominate its 10 existing directors forre-election at the annual meeting later this year, the company saidin a statement Monday. In spurning Ackman's candidates, the boardvoted unanimously to follow the recommendation of its nominatingand corporate governance committee, according to the statement.

“We have determined that adding Mr. Ackman's nominees would notbe an improvement,” ADP Chairman John Jones said in the statement.“Unlike Mr. Ackman's nominees, ADP's directors have a deepunderstanding and appreciation of the current state of ADP'sbusiness and its clients.”