Activist investor Nelson Peltz is attempting to secure a seat on the board at Procter & Gamble, seeking faster changes at the consumer products company. The 180-year-old company, founded on a hand-shake agreement by a soap and a candle maker, issued a statement strongly backing its board and strategic plan.
Those are among the details in an SEC filing Monday, in which the hedge fund founder seeks a seat on P&G’s board. At one point, the two sides almost struck a truce in May that would involve P&G laying out certain performance metrics over the next year.
Trian, which owns roughly $3.3 billion of P&G stock, will seek a single seat for Mr. Peltz in a shareholder vote at the company’s annual meeting, likely in October, the people said. “P&G because of its suffocating bureaucracy, because of its matrix organization.it is structured improperly”. It seeks a board seat at almost all of its companies so that it can tap the “perfect information” only insiders have and can change the discussion about what is working and what isn’t. David Taylor, the longtime employee who became chief executive two years ago, drummed up some new costs to cut, but analysts appear underwhelmed by the company’s focus on “irresistibly superior” products. Should Mr. Peltz’s Trian Fund Management LP win, which is far from guaranteed given how much support it must gain from other shareholders, it would mark a new milestone for a shareholder-activism movement that has shaken up some of the biggest US companies in recent years.
P&G shares have underperformed the S&P 500 and the consumer-staples group for the past 10 years.
USA consumer products giant Procter & Gamble (PG) Monday became the target of potentially the largest-ever proxy fight. “They start to lose market share”, Peltz tells CNBC. “I like the man”.
P&G, which reports quarterly results August 2, has shown slowing sales growth over the past five years and the company has lost market share across most of its categories, Trian said.
P&G has said changes introduced from late 2015 will save $US10 billion in annual expenses by 2021, and has cut 24,000 jobs since 2012. Trian said in a press release that its bid to get Peltz on the board centers on P&G’s continuing underperformance, costs, complexity and culture.
Company executives have been implementing a strategy to sell off lower-selling brands and refocus P&G on its 65 top-selling labels, including Pampers and Tide.
Trian says that Peltz will nominate the director that he replaces, which would expand the Board to a new total of 12 members.