P&G’s business structure takes center stage in Trian proxy tiff
Trian Partners, the activist fund seeking a seat on Procter & Gamble Co.’s board, stepped up its criticism of the company’s business structure on Tuesday, a day after P&G’s chief executive attacked Trian’s proposed reorganization as “dangerous.” Trian released a 94-page plan to boost shares of the consumer products giant.
NEW YORK — Trian Partners, the activist fund seeking a seat on Procter & Gamble Co.’s (P&G) board, stepped up its criticism of the company’s business structure on Tuesday, a day after P&G’s chief executive attacked Trian’s proposed reorganization as “dangerous.”
Trian last week released a 94page plan to boost shares of the consumer products giant, ahead of the Oct. 10 shareholder vote on whether to elect fund cofounder Nelson Peltz as a P&G director.
P& G, the maker of Crest toothpaste and Gillette razors and which has a market value of $232 billion, is fighting to keep Mr. Peltz off the board.
Reorganizing P&G into three global business units (GBUs) with presidents of each unit solely responsible, is central to Trian’s plan to boost the company’s stock price, a stance it reinforced on Tuesday.
Speaking at the CNBC Delivering Alpha event, Trian co- founder and chief investment officer Ed Garden cited P& G’s president of Greater China selling and market operations, Matthew Price, to illustrate Trian’s criticism that accountability is unclear across the company’s existing GBUs.
“If sales really reports to GBUs, then which GBU does he report to?” Mr. Garden asked, referring to Mr. Price and demanding that P&G answer the question in writing.
Mr. Garden went on to ask if the reporting lines really demonstrate accountability.
“Everyone in the audience knows that if it’s a dotted line with someone reporting to you and you don’t control their compensation, then it’s a canard,” Mr. Garden said.
Trian is P& G’s fifth- largest shareholder with 1.5% of the stock.
P&G has said it already underwent a reorganization, dividing the company into 16 business units across six regions. CEO David Taylor highlighted the new organization at a Barclays conference last week, laying out the new structure in a slide titled “simpler, faster, accountable.”
On Monday, speaking to CNBC commentator Jim Cramer, Mr. Taylor criticized Mr. Peltz’s proposed structure.
“He’s proposed some things that could be very dangerous to the short term, which is reorganize the company right now,” Mr. Taylor said.
Shares of P& G closed down 0.5% at $ 93.51 on Tuesday. —
NELSON PELTZ, founding partner of Trian Fund Management LP, speaks at the WSJD Live conference in Laguna Beach, California, Oct. 25, 2016.