P&G concedes defeat to activist investor with board role

Gillette
Procter & Gamble is behind brands including Gillette

American consumer goods giant Procter & Gamble has added an activist investor to its board, conceding defeat after a battle which has dragged on for almost a year. 

Trian Fund Management's chief executive, Nelson Peltz, will be joining P&G's board effective from March 1 and will also be added to the company's director slate for the annual general meeting next year, P&G said. 

Trian has built up a 1.5pc stake in the $233bn (£175bn) group, which is behind brands including Gillette razors and Crest toothpaste, since February, when it took a $3.5bn holding. 

Since then, it has been trying to get Mr Peltz added to P&G's board citing the company's "disappointing results over the past decade". 

It launched a proxy fight in July, after Mr Peltz was rebuffed in his efforts to get P&G to expand its board to enable him to join, meaning he was contesting a seat against the existing directors. 

P&G had lobbied against his appointment, issuing a report in September which directly took aim at Mr Peltz, claiming he had previously destroyed long-term value in companies when he took a place on the board.

This prompted Mr Peltz to give an interview in which he said P&G's management were "overseeing a melting ice cube" and said it was "dangerous" to allow things to carry on as they were at the company.

In the original vote tally after the meeting in October, P&G claimed victory against Mr Peltz, though this was disputed by an independent vote tally last month.

In a letter to shareholders on Friday, P&G conceded that Mr Peltz had won "almost 50pc of shares voted", saying the results were "extremely close".

Because of the strong backing given to Mr Peltz, P&G said it would be adding him to its board despite Mr Peltz having not officially won the vote against the existing directors, "after numerous discussions".

Chairman David Taylor said: "We respect Nelson Peltz as a highly engaged shareowner and investor, and look forward to his contributions as a member of P&G’s board."

P&G increased the size of its board to 13 from 11, also adding Novartis chief executive Joseph Jimenez as a director. 

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