P&G fight gets hotter: 5 things to know

The Procter & Gamble Co. headquarters in Cincinnati. AP Photo/Al Behrman

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The Procter & Gamble Co. headquarters in Cincinnati. AP Photo/Al Behrman

Procter and Gamble’s annual shareholder meeting will happen Oct. 10 in Cincinnati.

But the battle for the company’s future is happening now. Tensions are rising, and so are P&G share prices.

With dueling websites and public relations campaigns, P&G is trying to hold off a big investor, Nelson Peltz, who’s angling for a seat on the company’s board of directors.

Here’s what to know about the corporate contest:

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1. Shareholders will decide the battle — and they’re deciding now.

Holders of P&G shares (NYSE: PG) are receiving materials now from the company on proxy voting before the annual meeting. P&G is encouraging shareholders to “vote blue,” or vote only with the blue proxy card provided for the company’s favored slate of 11 director nominees.

In fact, the company’s mantra is “Vote blue; discard white,” referring to a competing proxy document from Peltz’ firm, Trian Partners.

"P&G has a highly qualified and highly experienced board of directors, many of whom have run successful businesses and led significant transformations," the company says on its web site, voteblue.pg.com. 

The site lays out P&G’s position on the situation in detail, and urges shareholders to vote against Peltz.

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2. Peltz is on the attack.

New York City-based activist investor Peltz is making P&G the biggest company to face this kind of activist onslaught.

Peltz owns about 1.5 percent of P&G, about $3 billion in stock.

And jobs could be at stake, according to P&G. David Taylor, P&G chief executive, told the Cincinnati Enquirer that Peltz wants to move “business units and jobs” out of the company’s downtown Cincinnati headquarters, and that he calls for “deep cost-cutting.”

Peltz, in a statement from his company, Trian Partners, said P&G’s $10 billion cost-cutting program, launched five years ago, has had “no discernible impact on profits or sales growth.”

3. The sides have dueling proxy cards.

While investors have been receiving blue proxy materials from P&G, Trian Partners has also sent shareholders its own voting materials.

P&G is telling investors to throw it away.

“If you have previously signed a white proxy card sent to you by Trian, you may change your vote at any time and revoke your prior proxy by signing and dating the blue proxy card and returning it in the postage-paid envelope you received or by voting via the Internet or by telephone by following the instructions on the blue proxy card,” P&G says.

4. What is Peltz’ plan?

We know Peltz has called P&G’s corporate culture “stifling” and has taken issue with what he calls the company’s”deteriorating market share.”

But what exactly is his plan? Peltz has said Trian will release a detailed “white paper” on where exactly he wants to take the company after the Labor Day weekend.

“Over the past decade, P&G has underperformed relative to both its peers and the S&P 500,” Trian said in July. “Over a 10-year period, P&G’s total return to shareholders was less than half that of its peers and has been in the bottom quartile over most recent time frames.”

As of 9 a.m. Tuesday, the promised white paper was not on Trian’s web site.

5. May I vote? Am I eligible to vote? 

Shareholders have been receiving corporate proxy materials since mid-August. Go here for more information.

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