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Ahead of proxy vote, P&G pushes hard to keep Peltz off board
October 3, 2017 / 10:44 PM / 2 months ago

Ahead of proxy vote, P&G pushes hard to keep Peltz off board

(Reuters) - Procter & Gamble Co’s (PG.N) Chief Executive David Taylor urged investors to back its turnaround plan and vote against activist investor Nelson Peltz’s addition to the board, just days ahead of the largest proxy vote in corporate history.

FILE PHOTO: Nelson Peltz founding partner of Trian Fund Management LP. speak at the WSJD Live conference in Laguna Beach, California, U.S. on October 25, 2016. REUTERS/Mike Blake/File Photo

“We strongly recommend you give us this opportunity to finish this transformation,” Taylor said during a question and answer session with investors.

“We are executing and need to stay the course.”

The Q&A session was also attended by P&G’s chief financial officer, Jon Moeller, and board member Meg Whitman, the CEO of Hewlett Packard Enterprise (HPE.N).

Peltz, who has amassed a $3.5 billion stake in the Tide detergent maker through his Trian Fund Management firm, is locked in a public battle with the company since June over its future and is pushing for a seat on P&G’s 11-member board.

The activist investor has criticized P&G, saying that the company’s transformation is being hindered by its “suffocating bureaucracy” and has proposed shrinking P&G’s businesses into three largely autonomous units.

He has also said the board, which is largely composed of chairmen and CEOs of other companies, is disengaged with the company’s day-to-day affairs.

The logo of Dow Jones Industrial Average stock market index listed company Procter & Gamble (PG) is seen on a tube of toothpaste in Los Angeles, California, United States, April 25, 2016. REUTERS/Lucy Nicholson

On the call with shareholders, Whitman, Taylor and Moeller rejected Peltz’s allegations that P&G had an insular culture, stressing that the company’s streamlining had reduced complexities.

They also said board members were regularly in touch with the management to help it best respond to changing consumer preferences.

The tussle between P&G and Peltz intensified last month as both parties try to swing the votes in their favor at the annual shareholder meeting on Oct. 10.

The stakes are high as P&G, with a market capitalization of $235 billion, is the biggest listed U.S. company to face a proxy fight.

“After extensive due diligence we do not think the choice to add Mr. Peltz to this board is the right one,” CEO Taylor said.

Whitman said the board wasn’t against activists, but adding Peltz at this juncture wasn’t right as P&G was already deep into its transformation journey.

“It’s about the right board member at the right time,” Whitman said.

Reporting by Siddharth Cavale in Bengaluru; Editing by Anil D'Silva

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