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Not Too Big to Brawl: P&G Ready to Take on Peltz

August 1, 2017

Public company directors and officers can learn from Procter & Gamble’s response to activist challenges from Nelson Peltz of Trian Partners. The hedge fund has set up a dedicated website and social media campaign to gain shareholder votes for Peltz, who seeks a seat on the board of the consumer goods giant. A July 17 presentation on the Peltz P&G campaign website claims that “Companies in the consumer industry with Nelson Peltz on the Board show significantly improved performance.” P&G may be a giant, but it is not sleepy. It issued a press release that same day in response to the campaign, claiming that “Trian has not provided any new or actionable ideas to drive additional value for P&G shareholders.”

The campaign is historic. A recent account from The Street hails it as the “largest director-election battle ever to be held.” But large size does not ensure victory. The news account speculates that “a settlement to add Peltz to the board could be reached before the October meeting if Procter & Gamble felt that they were likely to lose the contest.” If past mega-contests are any indication, though, P&G will prevail. We recall the 1991 proxy contest waged by shareholder Robert A. G. Monks to gain a board seat at Sears, Roebuck & Company. That too was a David and Goliath story; in that battle, however, Goliath won.

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