Procter & Gamble claimed victory in its battle with Nelson Peltz, saying the activist investor had been denied a seat on the consumer group’s board after the biggest shareholder challenge corporate America has seen.
But the battle appeared set to continue as investment firm Trian Partners, where Mr Peltz is chief executive, disputed the result of a shareholder vote, saying it was “too close to call”. Shares in P&G lurched 2 per cent lower on the news.
Mr Peltz, who wants to shake up management of the sprawling company, told CNBC the vote was “as close to a dead heat as possible . . . if anything, it’s plus or minus 1 per cent”.
Trian bought a $3.5bn stake in P&G in February, giving it a roughly 1.5 per cent holding and representing almost a quarter of Trian’s fund. Mr Peltz had argued that P&G, maker of household brands such as Tide detergent and Gillette razors, was stuck in the past and had failed to adapt to significant shifts in consumer tastes and shopping habits.
Trian’s defeat came a day after its chief investment officer was elected to the board of General Electric, raising expectations of success at P&G. Before the shareholder vote at P&G, Mr Peltz had won the backing of influential advisers, including ISS and Glass Lewis.
More than 400 shareholders attended the vote at P&G’s annual meeting in Cincinnati, Ohio. The company had warned earlier in the day that if a large number voted with paper ballots, it would need to tally votes individually.
David Taylor, P&G chief executive, said: “We’re certainly happy with the outcome.” He added that the company did not yet have a percentage breakdown of the preliminary voting results.
“The common message [from investors] is: the strategy the company is taking makes sense,” he said. “The push was: can we go faster? And that’s what we are working on.” Trian said in a statement: “It will take more time to determine the outcome. We await the certified election results by the independent inspector of election.”
P&G, like other big consumer goods companies, has lost market share and seen sales slow in recent years. The 75-year-old Mr Peltz has urged P&G, with a market value of $235bn, to invest in smaller, fresher products to appeal to young consumers.
Each side had spent months arguing its case, with Mr Taylor defending his record since taking over as chief executive in 2015. Trian poured $25m into the fight, while P&G hired a host of blue-chip advisers to defend the board and spent at least $100m, according to people familiar with the matter.
Mr Peltz has called on P&G to simplify its structure by cutting its number of divisions from 10 to three. He also wanted it to make more external appointments, as the company has a history of promoting from within. Its workers are often referred to as “Proctoids”.
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