Procter & Gamble named Nelson Peltz to its board, capping a contentious and costly proxy battle in which the billionaire activist investor may have narrowly won a shareholder vote for a seat - or not.
Peltz, a founding partner of Trian Fund Management, also will be added to P&G’s director slate for its annual meeting next year, the consumer-products giant said on Friday. The company also named Novartis AG Chief Executive Officer Joseph Jimenez to its board starting March 1. The board will increase to 13 from 11 members.
While P&G initially declared victory, Peltz appeared to secure the board seat last month after results showed that he’d won by fewer than 43,000 shares - or a margin of about 0.0016% - according to the independent inspector IVS Associates Inc.
In a letter to shareholders Friday, P&G said that investors had voted to elect all of the company’s directors, but that “the results between Ernesto Zedillo and Nelson Peltz were extremely close.”
“We have committed to work together with Mr. Peltz for the best interests of all shareholders,” P&G wrote in the letter.
“I believe in the tremendous potential of P&G,” Peltz said in a statement Friday. “I look forward to bringing fresh perspectives to the boardroom, and working collaboratively with David and the rest of the board to drive sustainable long-term shareholder value.”
In the months leading up to the vote, Cincinnati-based P&G had lobbied to keep Peltz out, saying he’d be a disruptive force as the company pursues its growth strategy. In Friday’s statement, Lead Director Jim McNerney noted Peltz’s experience and welcomed “his input and the additional perspective he will bring to the boardroom.”
Trian disclosed its $3.5 billion P&G stake in February and launched the proxy fight in July, saying P&G had an unwieldy number of brands and that its “suffocating bureaucracy” was hurting its ability to compete.
Peltz has said if he won the proxy fight, he would move to expand the board to make room for the director he sought to replace - former Mexican President Zedillo - to remain.
New York-based Trian, started in 2005, manages more than $10 billion and has typically focused its investments on consumer, industrial and financial companies, often targeting large conglomerates.