CINCINNATI — After a lengthy proxy battle, Procter & Gamble Co. has named Novartis chief executive officer Joseph Jimenez and activist investor Nelson Peltz as directors.
Jimenez and Peltz, co-founder of Trian Fund Management, are slated to join the board on March 1. Their additions will expand the P&G board from 11 to 13 members.
The P&G proxy battle heightened this past fall. Following its annual meeting in October, P&G said Peltz lost narrowly in a shareholder vote for the board, but the count later was questioned by an independent election inspector.
In an open letter to shareholders on Friday, P&G said it recounted almost two billion votes, and the recount showed that all 11 P&G nominees were elected, including Ernesto Zedillo, who edged out Peltz by an “extremely close” margin. Peltz received almost 50% of shares voted.
“Because the election results were so close, and because a large number of shareholders voted for Nelson Peltz to be a director, the board has engaged in numerous discussions with Mr. Peltz regarding a Board seat. That has included constructive engagements to get more closely aligned on strategic choices to transform P&G and deliver better results,” P&G stated in the letter. “For example, we agree that we are not predisposed to taking on excessive leverage, or substantially reducing R&D spending, or advocating for a break-up of the company, or moving the company out of Cincinnati. As a result, we have committed to work together with Mr. Peltz for the best interests of all shareholders, and the board has appointed Nelson Peltz as a P&G director effective March 1, 2018. We look forward to his contributions as a member of P&G’s board.”
P&G said the addition of Jimenez reflects a decision to bring a fresh voice to the board.
“Throughout the proxy contest, the board also listened to important shareholder input about the need to refresh the board’s composition,” the letter to shareholders said. “Based on that input, a search has been conducted for a director with extensive experience in consumer products, health care and international business. As a result, the board has appointed Joseph Jimenez, chief executive officer of Novartis, as a P&G director effective March 1, 2018. We will deeply benefit from Joe’s experience, expertise and leadership as we continue to transform P&G.”
Jimenez currently serves on the board of General Motors and has previously served on the boards of the Colgate-Palmolive, Speedel, Blue Nile and AstraZeneca.
“Joe has a distinguished track record of success in health care, consumer products and international businesses,” David Taylor, chairman, president and CEO of Procter & Gamble, said in a statement.
P&G lead director Jim McNerney commented, “We are fortunate to be able to add Joe Jimenez, a highly experienced and accomplished leader in the consumer products industry, to our board. We appreciate the input we have received from shareholders as we continue to refresh our board.”
According to published reports, the P&G proxy battle was the largest ever involving a U.S. company, with both sides spending a combined $100 million-plus on mailings, phone calls and advertisements to win over shareholders.