Nelson Peltz's Trian Fund Management has declared a proxy war against Procter & Gamble Co (NYSE: PG), according to a report from The Wall Street Journal. The filing sets up a proxy fight in which shareholders will be asked to decide whether to add Peltz as a 12 board member, representing Trian Partners, a NY fund that owns more than $3 billion in P&G shares.
However, those efforts have failed to boost the company's stock much beyond the level where it traded at the beginning of this year. Trian also claimed the company's market share had deteriorated as organic sales growth had decelerated and that it needed to take further action beyond selling off unprofitable brands.
Trian said in the filing it was launching the proxy fight because of P&G's continuing underperformance and the lack of tangible evidence that the company had embraced initiatives discussed at various meetings between the parties.
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"We believe that many of (P&G's) challenges relate to the company's organizational structure and culture, which can be highly resistant to change", the fund said.
Mr Peltz said he had tried to get P&G to expand the board to enable him to join it without an election showdown but in spite of "numerous constructive meetings" he was rebuffed and will now contest a seat against the existing directors.
In what it said was a bid to show it would be a collegiate player, Trian insisted Mr Peltz's first move if he is elected would be to recommend the re-election of the director who lost their seat. "The board is confident that the changes being made are producing results, and expresses complete support for the company's strategy, plans, and management".
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