Procter & Gamble Co. said Dec. 15 that its board has agreed to add Nelson Peltz as a director, the culmination of a monthslong proxy fight between the Cincinnati-based company and the activist investor's hedge fund Trian Fund Management LP.
The consumer products giant cited the closeness of a director election between Peltz and former Mexican President Ernesto Zedillo, with Peltz receiving almost 50% of the nearly two billion shareholder votes cast. The company said the results prompted it to engage in numerous discussions with Peltz and ultimately offer him a board seat, effective March 1.
P&G said its talks with Peltz have included "constructive engagements" on how to better align the company's strategy and deliver better results.
"For example, we agree that we are NOT predisposed to taking on excessive leverage, or substantially reducing R&D spending, or advocating for a break-up of the Company, or moving the Company out of Cincinnati," P&G said.
P&G and Peltz have been feuding for months. In August, the two companies said in separate filings that they were planning to spend a combined $60 million on fighting one another. Peltz began his public campaign in July, criticizing P&G for losing its competitive edge with its biggest brands such as Gillette razors.
P&G said Oct. 16 that Peltz fell short of winning a seat on its board by just over 6 million votes. But on Nov. 15 Trian claimed that an independent audit of the results showed Peltz as the victor. P&G was planning to challenge the vote count that would have put Peltz on the board, CNBC reported Nov. 22.
The Ohio-based company said it is also making moves to "strengthen executive compensation practices" after talking with shareholders. To that end, it has approved modifications to its performance stock program to reflect relative sales growth metrics and shareholder returns. The changes will be implemented in fiscal 2018-19.
P&G also said its board has received shareholder input about the need to refresh the board’s composition and has appointed Joseph Jimenez, CEO of Novartis AG, as a P&G director, effective March 1, 2018.