Coverage: Peltz narrowly loses vote for P&G board seat

Hedge fund boss Nelson Peltz fell less than half a percent  short of winning a board seat at consumer products company Procter & Gamble and may seek a recount of last week’s proxy contest.

Alexander Coolidge of the Cincinnati Enquirer had the news:

Peltz won 973 million votes in last week’s board election versus 979.2 million for the next-lowest candidate – a 0.3 percent margin separating the candidates vying for the 11th board seat.

Monday’s figures are preliminary as the company’s independent inspector of elections, Wilmington, Delaware-based IVS Associates, continues to count and confirm the results. P&G said it will issue an update at a later date once it recives IVS’s final certified report.

Peltz’s firm, Trian Fund Management, has signaled it may pursue a closer, contested reviewing of the proxy ballots, a rare process called a “snake pit.” First, the firm wants a closer look at the numbers as they get closer to officials certification.

“Trian continues to believe that the election is too close to call,” the firm said in a Monday statement. “The preliminary voting results P&G filed today, and relied on to declare victory at the annual meeting, are based on estimates and incomplete information reported by the company’s proxy solicitors and were calculated without full visibility into the proxies submitted by Trian to the inspector.”

Leslie Picker of CNBC.com reported that the results have yet to be certified:

The results haven’t been certified. The tabulation process begins via IVS Associates, an independent inspector for contested elections. The firm will first come up with its own estimates, and the two sides will likely choose to move onto the review and challenge period – the snake pit.

Proxy fights rarely get to that stage. But internal and external experts say P&G will probably be one of the few this year — and certainly among the biggest companies to ever reach this stage (the other large-cap name that’s frequently cited is Hewlett-Packard’s takeover of Compaq Computers in 2002).

P&G has an unusually high retail proportion — about 40 percent of their shareholders are individual investors, more than four times that of the average company. Retail is more likely to submit paper cards as opposed to voting over the phone or digitally. And unlike political elections, shareholders can vote as many times as they’d like, with only the latest vote counted.

Ronald Orol of TheStreet.com reported that Peltz is unlikely to give up even if he loses the vote:

But one thing is clear – win or lose — Peltz and other investors will continue to put pressure on the iconic American packaged goods company in the months to come.

“I would be surprised if Peltz goes anywhere in terms of selling the stock,” said Ali Dibadj, a partner and senior analyst at Bernstein. “I think investors including Peltz will continue to put pressure on this company in 2018.”

At issue is a massive boardroom battle, the largest ever in the U.S., which took place last week at Procter & Gamble’s annual meeting in Cincinnati, Ohio. Peltz, who has $3.5 billion in P&G shares, had been seeking one seat on the $230 billion market capitalization company’s board.

The results are preliminary and could still change once they are certified by IVS Associates, an independent election inspector.