Peltz wants to be on board in move to change P&G’S fortunes
NELSON PELTZ, the veteran activist investor, is standing for election to the board of Procter & Gamble, the US consumer goods giant, to influence what he sees as a much-needed turnaround.
Mr Peltz’s Trian Fund Management owns roughly $3.3bn (£2.5bn) shares in the $225bn maker of Crest toothpaste and Gillette razors.
He said he had tried to get P&G to expand the board to enable him to join it without an election showdown at the company’s AGM but in spite of “numerous constructive meetings” he was rebuffed and will now contest a seat against the existing directors.
In what it said was an attempt to show it would be a collegiate player, Trian insisted Mr Peltz’s first move if he is elected would be to recommend the re-election of the director who lost their seat. Trian, one of the five largest investors in P&G, said the Cincinnatibased consumer goods group had suffered “disappointing results over the past decade” and that it wanted to “help the company address the challenges it is facing”. P&G’S shares have underperformed peers such as Colgate-palmolive and Johnson & Johnson, as well as the broader S&P 500 index, in the past decade.
Trian is well-known for seeking to break up companies it invests in to realise bigger returns for shareholders. However, Trian said it was not looking to split up P&G nor looking to replace the chief executive or increase debt. The fund has also said that it has no desire to slash research and development or marketing spending, although it claimed P&G suffered from excessive costs and bureaucracy.
Trian’s analysis found that P&G’S $10bn cost-cutting programme, which it launched in 2012, had had “no discernible impact on profits or sales growth” and it was not confident the additional $13bn in cost savings would lead to better performance.
Mr Peltz said he would resign from at least one of the four directorships, that includes Mondelez International and The Wendy’s Company, he currently holds if he joined the P&G board. The AGM is likely to take place in October.