CINCINNATI -- Procter & Gamble Co. won the election, but definitely not a mandate.
That’s the big takeaway from the consumer product giant’s annual meeting Tuesday. Activist investor Nelson Peltz was sent packing on a preliminary basis only. And a shareholder who voted against Peltz told the company’s board it made the wrong choice on two of the last four CEOs.
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“It kind of looks like flipping a coin,” said P&G retiree Jim Baker, one of five shareholders who criticized some element of the company’s performance at P&G’s global headquarters.
“Your project delivery, your technology innovation is not nearly as good as it could be,” said George Morgan, a shareholder and retiree whose name is on two P&G patents. Morgan called Peltz “a vulture capitalist” but said he does have a point about P&G’s lack of innovation.
“I implore the board to do something to fix this problem,” he said.
Peltz sees those remarks as a reason to keep fighting.
“It’s not opposing them,” Peltz said. “Am I going to continue to stay around here and watch this iceberg melt? No. But I might stay around here for a while to stop it from melting.”
Peltz isn’t yet convinced he lost today’s election. P&G hasn’t revealed the vote tally, but it clearly surprised Peltz when it announced “preliminary proxy results” in favor the company’s slate of 11 directors. He thought the race was too close to call.
“This morning at 9:03 precisely we were up by 175 million shares,” Peltz said. “We knew they had roughly 100 million not registered, and we had some. So, if they got all the 200 million, we would be down by 25. We had some votes, too. So, I can tell you, that’s dancing on the head of a pin.”
The company’s inspector of elections, Wilmington, Delaware-based IVS Associates Inc., is expected to spend “multiple weeks” certifying results, P&G spokeswoman Jennifer Corso said.
“We want to ensure every vote is counted,” she added.
In the meantime, both Peltz and CEO David Taylor are promising to work together.
“We really do respect all our shareholders,” Taylor said. “So, I will visit him. We’ll have the appropriate interactions and to the extent he’s got ideas that’ll help us we will move forward.”
In a press conference, Peltz said a seat on the board and changes to the corporate structure are two things he’d still like P&G to consider. Former P&G CFO Clayt Daley offered another idea that could increase collaboration between the proxy fight foes.
“Obviously, If he’s not a director, he’s not entitled to inside information unless the company wants to make some arrangement,” Daley said. “That’s up to them.”
Ultimately, Taylor said only one thing will satisfy shareholders, Peltz included: better results.
“Our objective is crystal clear,” he said. “We want to perform at the top of our industry. We want to grow share. We want to deliver outstanding shareholder results. And we want to do it in a way that can last not for a year or three year or five years but for 10 or 15 years.”
