P&G’s busi­ness struc­ture takes cen­ter stage in Trian proxy tiff

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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.

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