P&G investment battle: 3 things to know

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P&G investment battle: 3 things to know

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The Procter & Gamble multi-brand distribution center in Union started operations in 2015. LISA POWELL / STAFF

For months, an investment company has maneuvered for more control at consumer goods giant — and important regional employer — Procter & Gamble Co., known across the world as “P&G.”

The stakes are high, and P&G is said to be the largest company ever to face such a battle for corporate influence. And yes, this fight could have Dayton-area and regional implications.

Here’s what to know right now.

1. An ‘activist investor’ wants a seat at the table — literally.

New York City-based Trian Fund Fund Management L.P. has nominated its CEO and founding investor Nelson Peltz to join P&G’s board of directors. The company says it controls about $3.3 billion of shares of P&G (traded on the New York Stock Exchange under the “PG” ticker)

“As one of P&G’s largest shareholders, and given P&G’s disappointing results over the past decade, Trian has a keen interest in helping the company address the challenges it is facing,” Trian said in a statement Monday.

Trian identifies those “challenges” as shrinking market share, excessive bureaucracy and corporate costs and more.

Peltz has fought proxy battles at Heinz in 2006 — in which he won two out of five board seats — and DuPont, in which he faltered, media reports say. Observers have called him an “activist investor.”

P&G said the date of its 2017 annual shareholders meeting — when shareholders typically will vote on a slate of director candidates — has not yet been announced.

2. P&G is resisting.

In a response to Trian, Cincinnati-based P&G is standing by its slate of directors.

“P&G has a best-in-class board of directors that is fully supportive of and actively engaged in overseeing the company’s transformation, and is holding management accountable for delivering continued growth and success,” the company said in its own statement, issued Monday. “The P&G board comprises 11 diverse, highly qualified and experienced directors.”

The company says it has accomplished its most significant “portfolio transformation” in its history over the past two years, having “divested, discontinued, or consolidated more than 100 brands and simplified its product portfolio from 16 to 10 categories.”

The company also insists that it has been good to shareholders, saying it has returned $100 billion to them in the form of dividends, share exchanges and share repurchases over the past 10 years, with about $38 billion in value returned over fiscal years 2016 and 2017.

3. P&G is a local employer.

P&G helps oversee a massive distribution operation in Union, recently taking over part of the services there from Impact Fulfillment Services.

“P&G constantly reviews its business for opportunities to improve customer service and responsiveness, work efficiencies and drive productivity. Based on the size, scope and complexity of this operation P&G believes that in-sourcing the customization operations at Dayton is the best solution for our retail customers,” a P&G statement to this news outlet said in February, after Impact Fulfillment Services told Ohio government it was laying off 170 workers at the center.

Overall employment at the center would not drop, a P&G spokesman, Jeff LeRoy, told this news outlet at the time.

The 1.7 million-square-foot center near Dayton International Airport opened in 2015. About 800 people were employed there when it opened.

More than a third of P&G’s products moves through the facility, with the help of a third-party supply chain manager, Exel, which has about 600 employees at the Union center.

P&G also has a “beauty and innovation” center and campus in Mason.

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