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Home>Proxy Adviser ISS Backs Activist Trian in Procter & Gamble Board Fight -- 2nd Update

Proxy Adviser ISS Backs Activist Trian in Procter & Gamble Board Fight -- 2nd Update

Proxy Adviser ISS Backs Activist Trian in Procter & Gamble Board Fight -- 2nd Update

09/30/2017

 By Sharon Terlep 

The largest proxy-advisory firm is recommending Procter & Gamble Co. shareholders put activist investor Nelson Peltz on the board over the company's protests.

Institutional Shareholder Services Inc. on Friday said Mr. Peltz's extensive consumer-products experience could help P&G's board. Another proxy adviser, Glass Lewis & Co., came out in favor of Mr. Peltz last week.

"While management undoubtedly deserves a longer runway to demonstrate durable results, there are several signs that the board could benefit from additional shareholder perspective and outside [consumer products goods] experience," ISS wrote in its report.

The two sides have traded barbs for weeks about whether Mr. Peltz deserves a seat on the consumer-products giant's board. Mr. Peltz's Trian Fund Management, which is one of the company's biggest shareholders with a 1.5% stake valued at $3.5 billion, has been amassing support.

Another top shareholder, Yacktman Asset Management, which owns about 15 million shares of P&G or a 0.6% stake, said earlier this month it is backing Mr. Peltz. Five former board members of H.J. Heinz Co. wrote a letter to P&G's board in support of Mr. Peltz, who won a seat on the ketchup-maker's board in 2006 after a proxy fight.

ISS can influence how institutional shareholders such as index-fund managers and mutual funds vote, though its recommendation isn't seen as insurmountable to the losing side.

Both ISS and Glass Lewis sided with Mr. Peltz in his failed attempt in 2015 to win a seat on the DuPont Co. board. In that contest, the three largest shareholders -- index-fund managers Vanguard Group, BlackRock Inc. and State Street Corp. -- all voted in favor of the company, despite the proxy advisers' recommendations. The three firms are also the largest holders of P&G stock.

A survey of 70 institutional investors conducted in September by Sanford C. Bernstein & Co. showed strong support for Mr. Peltz, with nearly three-quarters of respondents saying the activist should win a seat on the board.

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