NEW YORK: A costly monthslong battle over the direction of one of America’s biggest companies culminates on Tuesday with a shareholder vote at Procter & Gamble ( P& G) headquarters in Cincinnati.
The fight pits the maker of Gillette razors and Olay soap against activist investor Nelson Peltz, 75, a billionaire hedge fund chief who has pitched himself as the outsider needed to reignite P& G, the largest company by market capitalisation ever to face a proxy battle.
The grizzled veteran of highprofile boardroom brawls accuses the company of operating with excessive cost, being weak on innovation and missing the boat on key shifts in consumer behavior.
Peltz, whose firm Trian Partners holds 1.5 per cent of P& G shares, attributes declining market share in key businesses to P& G’s “slow moving and insular culture.”
His campaign has been fortified by support from respected proxy advisory services, including Glass Lewis, which said a new voice might help reinvigorate a giant that appears to suffer from a “degree of complacency.”
P& G counters that Peltz’s campaign is based on an outdated perspective on the company and ignores key hires of outsiders as well as progress since its decision in 2014 to divest dozens of underperforming products in order to target giant brands that resonate best with consumers.
Company executives also say Peltz’s campaign seems to be motivated mostly by short-term gain to the potential detriment of longterm performance.
“We strongly recommend you give us the opportunity to finish this transformation,” chief executive David Taylor said on an October 3 investor conference call.
Whoever wins, the battle has been costly.
P& G has estimated that it will spend US$ 35 million to try to keep Peltz off the board, while Trian has said it expects to spend US$ 25 million, according to securities filings.
P& G has reported revenue declines for the last three years, pointing to the drag from the strong dollar that has caused it to underperform against European rivals Unilever and L’Oreal in some key benchmarks. — AFP
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