Before Kullman's surprise retirement announcement, the billionaire fund manager was considering launching a second attempt to get representation on DuPont's board, people familiar with his thinking said on Tuesday.

"This goes a long way to inoculate the company from another proxy fight," said Damien Park, who works with companies facing pressure from activist shareholders as managing partner at Hedge Fund Solutions.

Representatives for Peltz's Trian Fund Management and DuPont declined to comment.

Feted with a standing ovation from shareholders in May when she prevented Peltz and three of his nominees from getting onto the DuPont board, Kullman, 59, presided over a 25 percent slide in the stock price in the intervening period, weakening her support among investors.

The 213-year old company, which makes Teflon and Kevlar, has appointed board member Edward Breen, a former CEO of Tyco, as interim chief executive and has hired a search firm to find a permanent replacement for Kullman.

Breen made six companies out of Tyco, a sprawling conglomerate beset by scandal and strategic flipflops, and several large shareholders in DuPont said he had a few months to ramp-up cost-cutting and reverse the stock price decline.

One investor said Breen was the perfect candidate to do the type of work Peltz was pushing for, removing the need for another boardroom battle.

"My expectation is that he will be super aggressive on the cost cutting and that the idea of an integrated science company is out the window," said one large institutional investor. "This is long overdue."

Kullman had blamed much of the stock price drop on global markets including a rising dollar but some investors had already grown restless with her leadership, complaining that she was not fully executing on the changes she initiated.

The $8 billion Columbia Dividend Income Fund exited DuPont during the second quarter, complaining that "free cash flow has deteriorated."

The Alpine Equity Fund told investors that DuPont has "lagged for the period when investors were disappointed after its board won a proxy battle with an activist shareholder who aimed to split the company."

Breen set out immediately on a charm offensive by calling top investors and assuring them of his plans to improve productivity and improve capital allocation.

Kullman's announcement has boosted the stock price over 12 percent.

Peltz' Trian Fund had been nursing a small loss for the year through late September, largely caused by DuPont's decline, people who had seen his numbers said.

Now with the share price up again, that loss could go away, vindicating his bet.

"I tell clients that even if you win a proxy fight, activists aren't necessarily going to go away. You can win the battle but still lose the war," said Chris Young, head of takeover defense practice at Credit Suisse.

(Additional reporting by Timothy McLaughlin and Ross Kerber in Boston, Greg Roumeliotis and Lewis Krauskopf in New York and Sneha Banerjee in Bangalore. Editing by Carmel Crimmins, Bernard Orr)

By Svea Herbst-Bayliss and Michael Flaherty