Activist investor Nelson Peltz is attempting to secure a seat on the board at Procter & Gamble, seeking faster changes at the consumer products company.
Peltz's Trian Fund Management LP, which owns about $3.3 billion US worth of Procter & Gamble Co. shares, said Monday that Procter & Gamble's financial performance over the last 10 years has been disappointing.
David Taylor was named CEO of the company two years ago and P&G under his lead has attempted to transform itself, focusing on its bigger brands with growth potential. The Cincinnati-based company has already shed some of the smaller brands it says collectively contribute little to its operating profit.
But that has hurt sales, which have declined over the past three years, and the company's share price.
Shares of P&G are up less than four per cent this year. Rival Johnson & Johnson's stock is up 15 per cent in the same period, Colgate-Palmolive Co. is up 11 per cent and Kimberly-Clark Corp. is up nine per cent.
Sticking to its strategy
Trian said that it's not looking to break up P&G, replace Taylor or remove other board members.
P&G said in a statement that it's maintained an active dialogue with Trian, but that it's sticking with its current strategy. Trian hasn't provided any "new or actionable ideas" that will help create more shareholder value, it said.
Analyst Kevin Grundy of Jeffries said in a client note that while P&G has taken "sensible" steps to boost shareholder value and there's no guarantee that Peltz will get a seat on P&G's board, "the perceived value of his presence may lead to greater/faster realization of cost savings and/or raise the execution bar at P&G."