The Trian Fund Management investment firm on Monday said it nominated Nelson Peltz for a board seat at Procter & Gamble to shake up the stalled consumer-products giant.
Peltz, an activist investor whose Trian Partners investment fund holds a $3.3 billion (R42.77 billion) stake in the United States producer of razors, laundry detergents, diapers and toothpaste, also wants the company to ward off threats to market share from smaller competitors.
This move comes after Peltz was denied a seat on the Board last week. For the last two years, executives urged investors to be patient. The company is structured improperly as a "matrix organization" and needs help to better position itself for growth. It seeks a board seat at almost all of its companies so that it can tap the "perfect information" only insiders have and can change the discussion about what is working and what isn't.
The Cincinnati-based group whose brands include Gillette, Tide and Pampers, is struggling to navigate changing consumer habits. Peltz railed against the company's "suffocating bureaucracy", but noted he was on good terms with CEO David Taylor.Trian said it wants P&G to cut costs more efficiently, and that it does not want to replace Taylor, any board directors, or to break-up the company.Since Taylor became CEO in November, 2015, P&G's stock has gained 0.3 percent. Shares of rival Johnson & Johnson are up 15 percent in the same period, Colgate-Palmolive Co.is up 11 percent and Kimberly-Clark Corp.is up 9 percent. Should Mr. Peltz's Trian Fund Management LP win, which is far from guaranteed given how much support it must gain from other shareholders, it would mark a new milestone for a shareholder-activism movement that has shaken up some of the biggest US companies in recent years. P&G's quarterly organic sales, which excludes acquisitions and divestitures, has fallen just once during his one and half years at the helm.
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Here are a few things to know about the proxy fight between Procter & Gamble Co and Trian. For this year, the consumer goods giant expects a 2-3 percent rise in organic sales growth.BATTLE LINESThe Trian-P&G battle comes as activist investors, emboldened by years of successful campaigns for changes at corporations across the US and overseas, use their growing coffers to seek bigger targets. "I like the man".
In a statement, P&G said: "The Board is confident that the changes being made are producing results, and expresses complete support for the Company's strategy, plans, and management". Trian said in a press release that its bid to get Peltz on the board centers on P&G's continuing underperformance, costs, complexity and culture.
Trian said that it's not looking to break up P&G, replace Taylor or remove other board members.