Procter & Gamble (PG) has accused activist investor of pursuing a seat on its board “to satisfy his own agenda” in a letter to shareholders requesting they vote down his board ambitions.
P&G said today it “strongly recommends” shareholders vote against Peltz’s efforts to gain a set on its board and instead trust the existing board to steer the group back growth.
The consumer goods giant’s letter stated: “You are being asked to choose between a board and management team that are successfully executing a proven plan to build a better and more valuable company and Mr. Peltz, who has not offered any new, actionable ideas to deliver value beyond the plan that we already have in place.
“Mr. Peltz does not bring any new or needed skills to our board. We believe that adding him to the board would derail the very significant value creation progress we are making.”
P&G insisted it is already delivering growth and shareholder value with a “strategy and plan that is working”.
It said it has transformed itself with a streamlined and focused portfolio of brands and categories and is implementing significant productivity improvements to fuel sales and earnings growth and investment in its brands and categories.
The letter adds: “We believe Mr. Peltz initiated the proxy contest to satisfy his own agenda and to meet the expectations of his limited partners.”
Peltz’s Trian Partners investment group announced in February it had purchased well over 1% of P&G shares for $3.3bn and he has been seeking a seat on the board since then.
P&G says he disclosed his motivation on May 18 May when he told P&G directors Jim McNerney and David Taylor that he had to have something for his [Trian’s] investors.
“What’s best for P&G right now is balance and focus, with the board and employees continuing a steady commitment to a plan that is working. P&G will not benefit from change for the sake of change,” the letter argues.
P&G said it has engaged with Trian and Peltz on at least 16 occasions – in person and via telephone and email – since Trian made its investment in P&G just several months ago.
Peltz has accused P&G’s board of presiding over weak shareholder returns, declining market shares and an “insular” and “slow moving” corporate culture that is resistant to change.
The proxy vote will be decided at P&G’s AGM on 10 October.