P&G proxy battle: Company urging vote against possible new board member
CINCINNATI (WKRC) - A critical election is underway affecting tens of thousands of people in our area.
It's not politicians involved, but one of the region's most important businesses.
When P&G sneezes, Cincinnati catches a “cold.” The question now is if Hedge Fund Investor Nelson Peltz the “cure” for that “cold” or is he “corporate pneumonia?”
Peltz, of Train Fund Management, is trying to get elected to the P&G Board of Directors. It's up to the shareholders in a proxy vote.
Peltz has accused the consumer products company of having a suffocating bureaucracy, and claims he can increase shareholder return.
Company CEO David Taylor says Peltz offers nothing on making money or making better products.
“We need to insure we don't risk derailing the progress we made. I don't have bad things to say about Nelson. I just don't think that his interests align with the long term interests of this company,” said Taylor.
There are thousands of P&G shareholders in the Greater Cincinnati area, including retirees and many of the 10,000 local employees. Some of whom might face layoffs or transfers if Peltz wins and can influence corporate policy.
“If you think about Cincinnati. the impact would be jobs and these are often high paying jobs. we also see a lot of R&D spending which takes place locally. R&D has been something that specifically has been mentioned for cutting and as you noted, potentially divisions or groups moved away,” said UC College of Business Prof. Shaun Bond.
This is not the first time recently that P&G has faced pressure from a big time investor. a few weeks ago, Activist Bill Ackman, who owned millions of shares of P&G stock pressured for cost reductions and ultimately CEO Bob McDonald stepped down.
Ackman subsequently sold all of his shares. He was never on the P&G board, just a shareholder.
P&G is urging shareholders to vote against Peltz. Results will come out at the company's annual meeting October 10th, when it will be found out which way the shareholder tide is running.
Former P&G CEO John Pepper sent a letter to shareholders, urging a vote against Nelson Peltz.
Local 12 put in a call to Peltz's company asking to talk with him or with a spokesperson, but have not heard back.