Nelson Peltz is drumming up support in his quest for a Procter & Gamble board seat.
Peltz, who has a $3.5 billion stake in P&G, issued a letter to shareholders that announced that proxy advisory firm Glass Lewis and fellow shareholder Yacktman Asset Management support him. The issue will be decided at the P&G Shareholders Meeting on Oct. 10.
Both P&G and Trian have been incessantly filing statements with the SEC to try to make their respective cases. Trian has argued that P&G’s stock has underperformed peers, that the organization is too bureaucratic. P&G asserts it already has a solid plan in place to improve, and that there’s no need for Peltz to join the board.
A recent filing from Trian includes a manuscript from an interview that former P&G chief financial officer Clayton Daley, who has joined Peltz in his proxy fight for a board seat. In that talk, Daley says that he was asked by another activist to get involved in a proxy fight and “chose not to” and to say “hey, let’s trust the board. Let’s trust the company to get the problems addressed.” (Activist investor Bill Ackman took aim at P&G in 2012, which resulted in the resignation of then ceo Bob McDonald.)
Daley said when Peltz came knocking five years later, he felt it was time to “get more actively involved.” In that same interview, Daley said that some of the brands P&G divested to Coty Inc. — like Wella, which he helped acquire — could have been growth drivers for the business, and that keeping the Gillette team at Gillette could have helped the business more aggressively stave off market share leakage to shaving startups like Harry’s and Dollar Shave Club.
Trian is advocating for a reorganized P&G, which would include three standalone global business units — one for beauty, grooming and health care, one for fabric and home care, and another for baby, feminine and family care. Each of those units would have regional leaders in charge of profit and loss. Trian also wants P&G to acquire and grow small and mid-size brands.
For its part, P&G has touted its improvements at Wall Street events and in SEC filings. It has said it is considering M&A again, and that a venture arm is also in consideration. One recent presentation declares that the business has outperformed its peers since November 2015. P&G also filed a detailed evaluation of Peltz’s former activist bets, and asserted that Peltz was not able to improve margins at Heinz while he was on the board.