P&G Lobbies For Its Vision in Peltz Proxy Fight

Forget Mayweather vs. McGregor. Procter &  Gamble is locked in one of the biggest fights of the year, and in the history of the corporate giant, and it isn’t sparring with its CPG rivals.

It’s embroiled in an intensifying proxy fight with heavyweight investor activist Trian Partners CEO Nelson Peltz, who’s lobbying to get on P&G’s board and shake things up.

Ahead of the company’s annual general meeting on October 10th, Peltz—whose notable “pelts” include nabbing a couple of board seats at Kraft Heinz (in an epic battle in 2006) and helping nudge former DuPont CEO Ellen Kullman out of her job—is campaigning hard to get on P&G’s board so he can shake up the Cincinnati-based CPG giant to wring more value for shareholders, including splitting up the company.

In fact, Peltz has convinced five former H.J. Heinz board directors who were part of that tussle to send a letter to P&G shareholders in his support.

P&G, led by CEO David Taylor, is pushing right back, in a battle that USA Today says is “more like a political campaign” than a classic corporate proxy fight. No wonder its shareholders feel “under siege,” as USA Today puts it, and caught between two angry opponents in a cage fight to the death.

As it has struggled through three CEOs and seen sales and market share slip in some of its biggest brands and categories in recent years, P&G has encountered opportunistic activists before. Bill Ackman helped push out Robert McDonald as CEO in 2013, prompting the return of A.G. Lafley to the CEO’s seat; Lafley, in turn, tapped Taylor to succeed him earlier this year.

But Peltz says he’s pushing for deeper, more fundamental changes in a company that represents the classical approach to CPG branding and not long ago stood as the paragon of how to do it right. Many a chief marketing officer passed through its doors and brands in what has widely been considered a world class marketing bootcamp.

The world, of course, has shifted, along with consumers less willing to pay premiums for brands like Tide and Gillette, while online channels suck the wind out of CPG brands’s sails everywhere.

Lafley and then Taylor have been shedding P&G’s underperforming brands, paring billions in operating costs in addition to investing in startups in a bid to return to growth, boost innovation and attract the best and brightest minds. They don’t need Peltz, they argue.

So the two sides are mailing and robo-calling shareholders, and waging a war in the press (with a related flurry of press releases) and search engine marketing to influence them.

P&G is urging its shareholders to “Vote Blue,” a reference to the blue proxy voting cards, to vote for its slate of 11 board nominees for director and reject Peltz, who’s lobbying shareholders to “vote white.”

In one recent press release, P&G claims that its board and management team are “implementing a strategy that is working and has strong momentum,” including meeting “all of its going-in fiscal 2017 objectives, boosting shareholder returns, and strengthening its brand and product portfolio.

P&G isn’t pulling any punches, either. “We did our homework” on Peltz, Taylor said, and “positive recommendations were not forthcoming.”

In return, Peltz is calling P&G is “a melting ice cube” — one whose trajectory he calls “dangerous.” This week he sent a detailed report to P&G shareholders arguing that in the wake of P&G’s “decade-long history of underperformance,” the company needs “fresh perspectives and a diversity of experiences … to return to the kind of breakthrough innovation that has historically driven its growth and market leadership.”

In what’s turning into the biggest (and messiest) proxy fight of the year. And like any scrappy fight for votes with election day looming, expect more mud to fly before October 10th.

The post P&G Lobbies For Its Vision in Peltz Proxy Fight appeared first on brandchannel:.

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