Read Yacktman Asset Management’s Open Letter to the P&G Board 

 

CEOs & Directors

Trian has a track record of highly collaborative engagement with management and boards. Here’s what some CEOs that we have worked with say about Nelson and Trian:

 

Investment: 2006 – 2013

“I said to another CEO…who had called me and inquired about Nelson, that if I were to form the board today, Nelson would be one of the first directors I’d ask to serve because he is an insightful, communicative, enthusiastic, energetic and available director.” – CEO Magazine, March 2008
Bill Johnson (CEO from 1998-2013)

“Nelson Peltz seeks to understand other points of view as much as he seeks to be heard. He is an active listener. Having been a CEO, Nelson also has a healthy respect for the difficulties and challenges of leading large public companies… When he joined the Heinz board, for example, he felt the company was not spending enough money on brand positioning, which he believed would hurt the company long term… Nelson is collaborative by nature – he is always searching for the best ideas. That makes him a great change agent.”
Dennis Reilley (Director of HJ Heinz from 2005-2013, Former CEO of Praxair)

 

Read the Alumni of The Heinz Board’s Letter to P&G Directors 

Investment: 2008 – 2010

“I deeply admire Nelson’s energy, not to mention his smarts and candor. He helped us strengthen our board and provided valuable insights into Snapple and several of our carbonated soft drinks, which he once owned. Nelson and I share a lot of the same business principles, like ‘cash is king.’ I think more shareholders and board members should be like Nelson Peltz and Trian – engaged, innovative and working towards improving a company’s operations.”
Larry Young (CEO from 2008-Today)


Investment: 2012 – Today

“Nelson is a valued and very constructive director who has made significant contributions to our board processes and business decisions. He has a sharp eye for changing consumer trends and willingly shares his ideas and best practices from his deep knowledge and extensive operating experience in the consumer goods industry.”
Irene Rosenfeld (CEO from 2007-Today)


Investment: 2013 – Today

“I have the highest regard for Nelson Peltz and Ed Garden.  Since becoming CEO of DuPont, I have talked many times with the Trian team and appreciate their insights on strategy and operations, as well as the collaborative and productive manner in which they have engaged with us.  Their ability to rigorously analyze opportunities for long-term value maximization has been consistently demonstrated over the years.”
Ed Breen (CEO from 2015-Today)


Investment: 2006 – 2010

“I have known Nelson for approximately 15 years. He is focused on one thing – creating shareholder value. While he can sometimes seem impatient, he is willing to roll up his sleeves and get involved in support of management teams. He is focused on helping to develop creativity and innovation within organizations and is a proponent of revenue growth with financial discipline. He and the team at Trian have created a lot of value over the years at a number of large cap companies.”
Todd Stitzer (CEO from 2003-2010)


Investment: 2005 – Today

“Nelson Peltz and Trian have played an important role in Wendy’s brand transformation and financial improvement. I greatly value the thought leadership and strategic insight that Nelson and the Trian team provide. Nelson and Trian are passionate advocates for the brand’s growth and success. We work collaboratively on key strategic decisions and our company benefits from Trian’s insight on financial and global opportunities.”
Emil Brolick (CEO from 2011-2016)

 

 

Media & Analysts

Media and research analysts have voiced support for Trian’s efforts to revitalize P&G.

 

“A watchful outsider has a valuable role to play on the inside, and management’s stubborn resistance to [Nelson Peltz’s] presence raises troubling questions about its openness to change. After a half-decade of disappointments, P&G has lost the right to say: Just trust me.”
Stephen Wilmot


“They can take all those fees and save them and put this man on the Board who’s done more homework than anyone else – and he’ll give you this homework for free! Memo to Procter & Gamble: Peltz is cheaper than all of those advisors and knows the space.”
Jim Cramer


“Peltz and Trian have an admirable track record. It’s hard to see his board presence, especially given his avoidance of short-term methods, as a negative.”
Vito J. Racanelli


“P&G must rapidly increase revenues so that the lines between stable costs and buoyant sales diverge sharply, creating outsized gains in profits. Today, it’s not happening, and it’s precisely the problem Nelson Peltz is targeting. Without Peltz, P&G investors face a dreary future of more of the same. Shareholders shouldn’t tiptoe like management. They should charge ahead, think big and put Peltz on the board.”
Shawn Tully


“Such an array of bigwigs [on a Board] might pass muster if [P&G] were cranking out superlative growth. But its stock’s 10-year return has underperformed other consumer companies like Clorox, Colgate-Palmolive, and Kimberly-Clark, as well as the S&P 500 as a whole.”
Lauren Silva Laughlin


“Voting for P&G’s existing board looks like the riskier option. The company has a record of complacency, and Mr. Taylor, for all his talk of change, is an insider. A board seat may be the only way for Mr. Peltz to assess the company’s underlying performance. It is all but impossible to judge from the outside the underlying improvement of a company that has sold as many brands as P&G has in recent years, including Duracell and CoverGirl.”
Stephen Wilmot


“This isn’t about a complete change in the board. It’s just a vote to add one additional member who is not happy with things the way they are.”
Adam Hartung


“P&G needs a shakeup because it’s badly lagging its rivals, both in shareholder returns, and performance of its products.”
Shawn Tully


“For all P&G’s talk of execution, its long-term returns have been disappointing. Even amid the company’s largely positive quarterly earnings report in July, there were some troubling sales trends for its baby, oral-care and Gillette razor brands as competition ratchets up. The company itself seems to know all this or why else would it have undertaken its own remodeling efforts? All P&G achieves with this defiant tone is to prove Peltz’s point that it’s resistant to outside perspective.”
Brooke Sutherland


“Shareholders should cast their vote for Mr. Peltz. Having an investor in the room, among around a dozen board members, can only aid robust board discussions, the bedrock of good corporate governance. The company’s existing board is a mostly one-dimensional pantheon of establishment corporate leaders.”
Stephen Wilmot


“We are inclined to agree with Trian here that more consideration be given to external candidates and that if the system is set up for them to fail, maybe there’s a problem with the system itself. We think back to our personal experience with PG in prior roles where employees seemed to place undue significance on their tenure, to the point that they would introduce themselves by name and number of years with the company. We think this also hampered accountability, since it seemed that time was the only measure of success, particularly given how quickly employees rotated through assignments.”
Ali Dibadj


“Management tried […] to say that innovation was just fine at P&G. But what it cited were line extensions like Tide PODs, GAIN Flings, Pampers Pants, and Oral B power toothbrush. None of these are great new innovations launching significant sales. None are new product platforms for high growth. Rather they are typical sustaining innovations applied to brands that are long in the tooth.”
Adam Hartung


“The company argues that its ‘strategy is producing results.’ […] P&G has simply recovered lost ground; its current stock price is hovering right where it stood two-and-a-half years ago, at around $93 […] And it’s likely that Peltz has provided a tonic for P&G shares that would vanish if he departs.”
Shawn Tully


“Why are [P&G’s] compensation targets tied to 2.8% organic sales growth through 2019 when the company sees its markets growing by 3% to 3.5%? Also, P&G does seem to have missed some opportunities to invest in new products or digital expertise with takeovers of startup consumer companies. And if it’s true that P&G CEO David Taylor told Peltz that ‘we cannot bring in outside people at too senior a level or they will fail,’ that hardly seems like the ideal corporate culture.”
Brooke Sutherland


“We find it hard to disagree with the points Trian has set forth.”
Lauren R. Lieberman


“But P&G’s stop-Peltz campaign is a big mistake. The veteran activist has identified, and can help correct, P&G’s fundamental weakness: its inability to grow.”
Shawn Tully


“More pressure on the slow-to-adapt culture at P&G is better. We believe P&G can do much better than it is doing and its employees, investors, and alumni deserve that.”
Ali Dibadj


“In our view, [Trian’s suggested] reorganization would allow the company to respond faster to changes within individual markets by making the organization more nimble. This organizational structure would also likely better align incentives and facilitate faster and better decision making.”
Andrea Teixeira, CFA


“Trian has entered into a consulting agreement with Clayton Daley […] This should be of help given Daley’s wealth of experience in the industry and knowledge of the company. We think very highly of Mr. Daley, both professionally and personally, and believe he is a key addition to the team.”
Kevin Grundy, CPA


“Although P&G has benefited from dumping unprofitable products, it hasn’t used those savings to launch successful new ones. It needs a director who’s expert at steering those investments where the payoffs are biggest. […] The colossus of Cincinnati needs fresh thinking to stop the incredible shrink.”
Shawn Tully


“Mr. Peltz is making a good point, that leadership at P&G really has forgotten what good, long-term profit producing innovation is, while succumbing to the strategy of selling major business units (reducing revenue) then using the money to buy back shares rather than investing in future growth.”
Adam Hartung


“From a cost savings standpoint, without question we have been disappointed in the lack of flow through of cost savings to earnings growth. Yes, unfavorable currency reduced the $10 bn in realized cost savings over the past five years to just $3 bn, but of that remaining $3 bn, we don’t think it’s unfair to question the benefit of re-investing those savings, particularly as sales and earnings growth have only decelerated over this time frame.”
Lauren R. Lieberman


“Procter & Gamble’s rejection of Nelson Peltz’s push to become a director unwittingly shines a light on the company’s own board of entrenchment.”
Lauren Silva Laughlin


“Peltz’s track record shows that he has the expertise in brand management, cost discipline, and capital allocation required to help P&G end its recent run of underperformance.”
David Trainer


“Peltz advocates what P&G sorely needs: a growth strategy. […] Peltz has broad experience in consumer products from his successful campaigns at Snapple, Heinz, and Cadbury.”
Shawn Tully


“We continue to believe [Trian’s] involvement raises the execution bar at P&G, which is supportive of a higher multiple […] Mr. Peltz has a long and well respected history in consumer staples including successful activist campaigns at Heinz, Cadbury/DPS, and Kraft.”
Kevin Grundy, CPA


“Mr. Peltz’s demand for one board seat is modest. His credibility, by activism standards, is respectable.”
Financial Times Lex Team


“Given Procter’s myriad challenges, shareholders would be silly to pass on [Nelson’s] assistance.”
Lauren Silva Laughlin


“Activists often get a bad reputation for going after short-term results, and Trian does indeed take a longer-term approach than most people appreciate.”
Andrew Ross Sorkin


“It is fair to ask just how much information board members can adequately process without compromising their ability to make appropriate decisions on behalf of the shareholders they are charged to represent. In this deluge of information, from time to time critical issues may be missed and important questions may not be raised […] When [Trian’s] board representative walks into the board meeting, he or she is armed with a package that has been dissected in excruciating detail, ready to ask management the analytical questions that may not be evident to other overwhelmed directors.”
Mark Rogers


“Unfortunately, P&G’s leadership has pretty much set itself up for this battle. And shareholders may have good reason to add Mr. Peltz to the board in hopes of additional change.”
Adam Hartung


“All these advisers Procter has got are going to cost them a fortune. Just add Nelson. Nelson is a classically good board member with a fantastic research team. Trian does great research. … These are people you would welcome on your board.”
Jim Cramer


“Peltz and Trian have a long track record of driving shareholder value at consumer companies (Heinz, Pepsi, Mondelez, etc).”
Dara Mohsenian, CFA


“Trian suggests moving to a geographic-led model as it gives the division owner broader operational control and enhances local decision-making. Trian believes a geographic-led model is also advantaged as it relates to the growing importance of local brands, small brands and channel divergence. We strongly agree with this thought process though think a true articulation of this vision would require a great deal of time, patience and enormous cultural change.”
Lauren R. Lieberman


“Peltz may not have all the answers to P&G’s troubles, but a fresh look on the board is warranted.”
Lauren Silva Laughlin


“The only true way to mitigate the risk of information overload in the boardroom is to ensure open dialogue with management so that board members aren’t inundated with superfluous information. But don’t be surprised if P&G’s directors quietly breathe a sigh of relief if and when Nelson Peltz walks into their boardroom for his first meeting.”
Mark Rogers