Procter & Gamble Faces Showdown With Activist Investor Peltz

Gladys Abbott
July 17, 2017

"As a member of the board, Mr. Peltz would seek to help the company increase sales and profits, regain lost market share, and address the company's structure and culture, and we believe that he can contribute far more value operating from within the company's boardroom than by merely advising the company from the outside", Trian wrote in its proxy materials.

The announcement by Trian marks its official launch of its biggest ever proxy fight, with the activist investor up against a consumer products giant worth $222.6 billion.

Peltz's fund, which owns about $3.3 billion of P&G's stock, urged shareholders to vote for Peltz at the company's shareholder meeting, citing his track record of working with managements to turn around consumer companies.

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. The shares are down 5% from their peak in late 2014.

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"We need a game-changing attitude at P&G", Peltz told WSJ.

P&G's filing also noted that last week during a meeting between members of the board at P&G and Trian, that Trian said it would move forward with the campaign to have Peltz elected to the board because the company had not be moving quickly enough to improve overall performance. "The board is confident that the changes being made are producing results, and expresses complete support for the company's strategy, plans, and management".

Trian said P&G has underperformed the S&P 500 and the company's corporate peers over the last decade.

Trian said it is not pushing for P&G to break up, to replace its CEO or directors, cut its pension benefits or reduce marketing and research and development spending. P&G is expected to hold its annual shareholder meeting in October.

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