In a rare public appearance together Thursday, Sept. 19, Procter & Gamble Co. (PG) CEO David Taylor and activist and board member Nelson Peltz discussed the company’s performance since their 2017 landmark proxy fight.
Since Peltz joined the company’s board in March 2018, P&G has produced a total shareholder return of 48%, making the panel discussion at the CNBC Institutional Investor Delivering Alpha Conference in New York a cross between a love fest and a victory lap.
“I’m not taking credit for anything,” Peltz said. “I found a great management team under David, one that I really have a lot of respect for. Once the fight was over, we came together, and they’ve been so welcoming to me.”
It was a tone much different from that taken during the proxy fight that stands as the most expensive ever run.
Taylor, though, played down that antagonism, stressing to interviewer Jim Cramer of CNBC that the company listened closely to Peltz and other shareholders during the fight and that the takeaway was they agreed with both sides, wanting Peltz on the board but also supporting the company’s then-underway strategic program.
“We listened to investors throughout the proxy contest. And what was clear is investors agreed with our strategy, they supported our board, they also supported Nelson, and they want to see the company move faster. We listened to the investors.”
That’s miles from the bad blood when Peltz’s campaign began in February 2017 when his Trian Fund Management LP disclosed a $3.5 billion position, which was followed in July by a presentation citing “suffocating bureaucracy” at the iconic packaged goods company.
The proxy war concluded with Peltz receiving the backing of roughly half of shares voted in a director fight that took place at the company’s annual meeting in October 2017 but didn’t really end until the two sides settled in December 2017 to bring the dissident onto an expanded 13-person board.
“At the time it happened,” Taylor said, “we wanted to make sure that we articulated our strategy and stand for what we believe is right. We had shared in February of ’16 the turnaround strategy that we felt was very strong. We talked about working hard to turn around the U.S. and China, our two biggest markets. And we ended up getting to a place that at the end of the proxy contest where it was clear that investors supported our strategy, supported our board and supported Nelson. So we did what we thought made sense.”
A key part of Peltz’s campaign focused on his view that P&G has historically had an overly insular culture. During the campaign, Peltz argued the company didn’t have anyone in its senior executive ranks in an operating role who had any substantial outside experience.
The Peltz team also asserted there had been a significant lack of innovation at the company in recent years and that the last major P&G innovation was the Swiffer, created almost 20 years earlier.
Taylor and Peltz addressed innovation in Thursday’s interview, both regarding management, seeking leadership diversity and enhanced transparency, as well as ecologically friendlier packaging and products.
“One of the first misnomers is the big brands are dead,” Taylor said. “There’s a reason big brands are big. Consumers love them.”