Former Procter & Gamble CFO said no to Bill Ackman, yes to Nelson Peltz

CINCINNATI -- Activist investor Nelson Peltz deployed one of his big guns Monday in an ongoing quest to win a board seat at Procter & Gamble Co.

It’s a three-minute endorsement video by Clayton Daley Jr., a former vice chairman and chief financial officer at P&G who now serves as a paid consultant to Trian Fund Management LP. That’s a group of shareholders that owns about $3.3 billion in P&G shares but aren’t happy with the pace of sales growth, earnings growth and stock price at Cincinnati-based maker of Tide detergent, Pampers diapers and Gillette razors.

“I know for a fact that some retirees have had to change their retirement plans because the stock has not performed in line with the expectations they had when they retired,” said Daley, who left P&G on Jan. 1, 2009.

The video offers a rebuttal to P&G’s criticism that Daley left the company nearly a decade ago and doesn’t understand how the company operates now.

“I’ve been out of Procter & Gamble for a little over eight years,” Daley said. “I’ve talked to a lot of current and former PG employees.”

Daley also breaks a bit of news in the cameo appearance: Nelson Peltz isn’t the first activist who tried to recruit him.

“I was approached by Bill Ackman in 2012 to join his team and I decided that we need to trust the board and we needed to give the company time to work out its issues,” he said. “But it’s been five years and the shareholder returns have not improved. I think it’s simply time to do something different.”

Daley’s video came on the same day that CEO David Taylor released a letter to shareholders that asserted its growth plans are working, with 2 percent growth in organic sales and 11 percent growth in core earnings per share in 2017. Both figures measure growth excluding unusual events like divestitures and foreign-exchange impacts.

“Mr. Peltz has repeatedly criticized P&G for its performance over the past ten years, ignoring the significant transformation that our company has recently undertaken,” Taylor wrote. “Mr. Peltz’s argument that P&G should be targeting the same organic growth targets today as it did in 2005 shows a misunderstanding of the significantly different global economic conditions and industry dynamics today as compared to 12 years ago.”

 

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