P&G declares victory in proxy battle
But activist investor, his associates say they did not concede the fight.
Procter and Gamble shareholders rejected activist investor and hedge fund manager Nelson Peltz, according to a preliminary result offered by the company Tuesday.
However, the P&G shareholders meeting and the vote may not have capped what was widely thought to be the largest corporate proxy battle in history. Peltz and his associates said they want to see certified vote results, and they did not concede the fight.
P&G leaders, though, said the preliminary vote result restores the company to a continued “transformation” that they argue has already been well underway. Here’s what the vote was about: New York-based Peltz wanted a
seat on the P&G board to reinvigorate a consumer goods retail giant that Peltz and his supporters said had lost its way. Leaders of the Cincinnati-based company opposed his bid.
Said P&G CEO David Taylor on Tuesday: “We’re in a major transformation, and it is yielding results.”
Taylor said in a press conference that he didn’t have exact vote numbers, but he said he was pleased with the results. “We’re certainly happy with the outcome of the preliminary proxy contest.”
After the shareholders meeting, Peltz said the vote was close, and indicated he was surprised the company announced a result.
“The vote on a best-case basis is one percent for them, one percent against them,” Peltz told media. “That’s the margin we’ve estimated.”
Peltz also noted that he remains a big shareholder of P&G, with a $3.5 billion stake in the company.
“I’m here,” he said. “We’re going to do the best we can.”
“I am open to listening to, and we are open to listening to, ideas from wherever they may come,” Taylor said in his separate press conference.
Peltz had called for P&G to reorganize into three business units, shrinking down from 10.
How his placement as a company director would have affected local and regional employment was a question, P&G spokespeople had said in the weeks before Tuesday’s vote.
With more than $65 billion in revenue and more than 95,000 employees worldwide, P&G remains a huge employer in Ohio and the Dayton-Cincinnati corridor. The corporate giant oversees household brands that have stood the test of time such as Tide detergent, Pampers diapers, Crest toothpaste and other brands.
The company has a business center in Mason, with more than 1,500 workers. Also, a 1.7 million-squarefoot distribution hub for P&G products opened near the Dayton International Airport in Union nearly three years ago.
More than a third of P&G’s products move through that local facility. Supply chain company DHL has about 520 employees there; Impact has about 100 workers; P&G has about 140 workers there. There are about 760 workers total at the Union center, P&G said.
In all, P&G has about 11,000 Ohio employees, with about 10,000 employees in the Cincinnati area and about 3,400 in downtown Cincinnati.
P&G had asked shareholders to approve a slate of 11 nominees for its board of directors. But Peltz wanted one of those seats — and a new direction for the company.
With every passing day, it seemed the stakes in the fight got higher. It’s a “battle for the future of big brands,” the Wall Street Journal said Monday.
As the vote approached, Peltz appeared to be winning support. Last week, the California State Teachers’ Retirement System, which has some 5.6 million shares of P&G stock (NYSE: PG), said it was supporting Peltz.
The retirement system has been an investor with Peltz’ firm, Trian Fund Management, since 2011.
Peltz said earlier he had also picked up the backing of a trio of shareholder advisory firms.
Both sides — P&G and Peltz — have spent around $60 million in a campaign to win votes.