A preliminary count by Procter & Gamble Co.’s (NYSE: PG) proxy solicitors indicates that P&G shareholders elected all 11 of the company-backed directors. Activist investor Nelson Peltz of Trian Fund Management was not among them.
At P&G’s annual shareholders’ meeting in Cincinnati this morning, Peltz said that the proxy solicitors told him that the vote was “extremely close and it may or may not be decided today.”
Reuters reports that the difference between “for” and “against” votes for Peltz to join the board is “within one percentage point.” Trian owns about $3.5 billion in P&G shares.
On Monday, Ed Garden, a co-founder of Trian, was elected to the board of directors of General Electric Co. (NYSE: GE) following a relatively brief and peaceful negotiation with the company.
Peaceful and easy are not terms one would use to describe Trian’s slugfest with P&G. Not only was it expensive — running to around $100 million — but the Peltz and Trian rarely involve themselves in proxy battles. Peltz recently called the proxy battle with P&G “probably the dumbest thing I ever did.”
Three proxy advisory firms — Egan-Jones, Glass Lewis, Institutional Shareholder Services — all supported Peltz in his quest for a board seat. In its recommendation, Egan-Jones said that P&G’s current board and management team “failed to maximize the company’s potential as evidenced by critical continuing loss of market share…”
Even if Peltz ultimately loses, P&G is almost certain to get shaken up. When Trian took on DuPont a couple of years ago, he didn’t win that one either. But within a year, DuPont’s CEO was gone and the company speeded up its cost cutting program ahead of the merger with Dow Chemical.
Judging by the movement in P&G’s share price, investors aren’t well-pleased with the reported outcome of the proxy vote. Shares traded down about 1.5% at $90.75 in the late morning Tuesday. The stock’s 52-week range is $81.18 to $94.67, and the consensus price target is $93.74.
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