Investor Nelson Peltz is planning to launch a bid for a board seat at consumer goods giant Procter & Gamble (P&G), people familiar with the matter have told the Wall Street Journal.
Peltz is allegedly hoping that winning a seat will allow him to drive changes to help reverse P&G’s recent sluggish growth. 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).
Peltz’s Trian Fund Management is a key shareholder in P&G, with roughly $US3.3 billion of stock. But he would need substantial support from shareholders in order to win a vote at their annual meeting, which will take place later this year.
“We need a game-changing attitude at P&G,” Peltz previously told the WSJ. “We just can’t keep going along the same path.”
The news follows months of discussions about whether Peltz should be made a director at P&G, a proposal that was ultimately rejected, and squabbles over how to improve the company’s sales and growth.
P&G manufactures and sells a wide range of consumer products, owning hundreds of supermarket stalwarts like Gilette, Fairy, and Oral-B.
However, it has suffered in recent years from the slowdown in the global economy as well as from competition from startups. Its share price has been volatile over the past five years, and in 2014 it sold between 90 and 100 of its brands to focus on between 70 and 80.
“The Board is confident that the changes being made are producing results, and expresses complete support for the Company’s strategy, plans, and management,” P&G said in a statement.
P&G has said changes introduced from late 2015 will save $US10 billion in annual expenses by 2021, and has cut 24,000 jobs since 2012. But reported earnings for 2016 were still slightly lower than for the previous year, and net sales for 2016 declined 8% compared to 2015.
P&G’s returns have also lagged behind S&P 500 companies, with investors seeing about 4% over the last year compared to a 16% return for the S&P 500.
Trian has said that if it were to win a seat it would strive to create an extra one and renominate the person who lost, to ensure no existing members lose their positions.
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