Published: Mon, July 17, 2017
Sport | By Gary Shelton

Procter & Gamble faces board seat fight from Trian Fund Management

Procter & Gamble faces board seat fight from Trian Fund Management

Peltz, an activist investor whose Trian Partners investment fund holds a $3.3 billion (R42.77 billion) stake in the U.S. producer of razors, laundry detergents, diapers and toothpaste, also wants the company to ward off threats to market share from smaller competitors.

"We've been advocates for a long time for cost reductions, simplifications for organizations and better incentives for management", Dibadj said in an interview. In fact, the Company's total return to shareholders over the last ten years was less than half that of its peers. Peltz's fund has also invested in PepsiCo - a stake that it said past year it no longer held - as well as Wendy's, Mondelez International and General Electric.

Some of Peltz's previous campaigns with USA corporate giants have yielded results. Historically, there have been executives who run business units and others who are in control of sales and marketing, which Trian argues clouds who has ultimate responsibility for profits.

Mr Peltz said he had tried to get P&G to expand the board to enable him to join it without an election showdown but in spite of "numerous constructive meetings" he was rebuffed and will now contest a seat against the existing directors. And within months, DuPont missed on its quarterly results, changed its CEO and opened back up to Trian helping it structure its pending merger with Dow Chemical Co. The request was deemed "unnecessary" by P&G directors in light of recent initiatives the company had implemented, according to the proxy filing.

Typically, Trian has tried to avoid the perception it fights companies.

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Trian has told P&G if it were to win a seat at the annual meeting, it would seek to renominate whoever lost, the people said, expanding the board by the one seat.

Calling P&G's financial results over the last decade "disappointing", Trian cited weak shareholder returns, deteriorating market share and excessive cost and bureaucracy in the Securities and Exchange Commission filing that announced the challenge. And comes when the company already is more than half-way through a nine-year, $10 billion cost-cutting program. In 2012, Bill Ackman's Pershing Square Capital Management disclosed a $1.8 billion stake in the company and pushed to replace then-CEO Bob McDonald, who was ultimately replaced the following year.

"Disruptive and existential threats are impacting the entire consumer packaged goods industry", Trian wrote.

The company has a market value of roughly $222.7 billion, based on the number of outstanding shares as of late March.

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