Unlike his last proxy fight at DuPont, the activist's Trian Partners, which owns a $3.3 billion stake, is taking a more surgical approach to the $223 billion razors-to-detergent company, lobbying for a single board seat.
P&G has increased operating profit margins, to 20.6% past year from 19.1% in 2011, and says it ranks third in the industry - behind competitors that also charge high premiums. But any sign of an agreement was absent on Monday when both came out swinging. "P&G because of its suffocating bureaucracy, because of its matrix organization.it is structured improperly". Trian's previous battle with a consumer goods conglomerate was with PepsiCo Inc, where it pressured the company to spin off its beverage business from its snacks division, a campaign that the company never heeded though it did hand the investor a board seat in 2015 to make peace. The board also rejected Trian's concerns Mr. Taylor wouldn't deliver on pledged cost cuts, arguing the fear was based on prior management.
For instance, Peltz acknowledged during a CNBC interview that P&G is a "great company" that's backed by a "phenomenal" CEO David Taylor who hasn't yet lived up to his full potential. In contrast, the S&P 500 Household Products index .splrcprod , which includes Kimberly-Clark Corp and Clorox Co, has risen 12 percent over the same period.
Shares of P&G are up less than 4 percent this year. Since it started in 2005, it has only had two prior proxy fights - with H.J. Heinz Co. and DuPont Co. - and there were almost 10 years between them. If the report is correct, P&G would be the biggest company ever to face a proxy fight, (in which shareholders are persuaded to gather enough shareholder proxies to win a corporate vote). "I like the man". Trian said it was concerned that $13 billion of identified cost savings would not materialize given an "overly complex organizational structure and a slow-moving and insular culture".
"As one of P&G's largest shareholders, and given P&G's disappointing results over the past decade, Trian has a keen interest in helping the company address the challenges it is facing", Trian said in a statement.
But P&G said it was sticking with its current plan.
Company executives have been implementing a strategy to sell off lower-selling brands and refocus P&G on its 65 top-selling labels, including Pampers and Tide.
Because of P&G's size, Trian's ability to win support from other investors will be in a particularly bright spotlight, and it will have to convince them that its brand of activism can help companies and not distract from work already being done.