Proxy advisor Glass Lewis backs Peltz for Procter & Gamble Co. board seat

Glass Lewis cites 'problematic trends' for P&G

CINCINNATI - The proxy advisory firm Glass Lewis is urging shareholders to support Nelson Peltz in his quest to gain a board seat at Procter & Gamble Co., saying it creates an opportunity for “a fresh discussion” of issues facing the consumer products giant.

It’s a key endorsement for Peltz because institutional investors – who represent more than 20 percent of P&G’s shareholder base -- often vote the way proxy advisors recommend.

P&G has been pulling out all the stops to win its proxy fight against Peltz’s Trian Fund Management L.P., which owns about $3.5 billion shares or 1.5 percent of the company. It’s the most expensive proxy contest ever, with the combatants planning to spend at least $65 million to win shareholder votes.

Peltz has argued P&G needs major structural changes to restore growth while the company claims Peltz isn't qualified to be a P&G director and it's already made the necessary changes.

Shareholders are asked to vote white proxies to elect Peltz and blue proxies to support P&G at or before its annual meeting Oct. 10.

Glass Lewis said Peltz has delivered cogent and well-framed arguments in his quest to win a board seat, giving investors “ample cause” to support his election. Here’s an excerpt from its report:

“While P&G is quick to point to the Company's existing restructuring effort, we consider there are relatively few decisively favorable metrics on which the board can hang its hat with confidence. In contrast, we find Trian more readily identifies a number of problematic trends -- from TSR to operational growth metrics to market share -- that suggest P&G's existing trajectory is less than attractive."

The company said it’s disappointed by the endorsement.

“Glass Lewis fails to recognize that P&G has delivered consistently strong operating results over the last five years, excluding the effects of currency, while executing its transformation,” said the company statement. “We believe that putting the wrong person like Mr. Peltz on the P&G Board represents a risk of derailment.”

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