Market Overview

Procter & Gamble CEO: Nelson Peltz's Activist Campaign Is 'Very Dangerous'

Share:
Procter & Gamble CEO: Nelson Peltz's Activist Campaign Is 'Very Dangerous'
Related PG
Benzinga's Option Alert Recap From September 21
Benzinga's Top Upgrades, Downgrades For September 15, 2017
US Market Indexes Report Another Day of New Highs (GuruFocus)

Billionaire investor and Procter & Gamble Co (NYSE: PG) shareholder Nelson Peltz made his activist campaign against the consumer products company public in a 93-page white paper report.

The company almost immediately shut down the ideas presented by the activist investor, and on Monday, P&G's president and CEO, David Taylor, said in an interview with CNBC's Jim Cramer that Peltz's idea of eliminating the company's corporate R&D initiatives are in fact "very dangerous."

While eliminating corporate R&D is harmful for the long term, Peltz's other suggestion of reorganizing the company's structure is similarly "very dangerous" for the short term, the executive told Cramer.

In fact, the two proposals when factored in together would deprive the company of lucrative opportunities, the executive continued. For example, the company's sachets used for samples in the U.S. are sold by the hundreds of millions of units in developing markets. The creation of these sachets involved the collaboration of the liquids team and paper businesses.

"If you had separate businesses with separate R&D, you wouldn't have made that connection and would have missed the opportunity to take advantage of a real plus," he emphasized.

Nothing New To The Table

Despite a massive 93-page white paper, Peltz doesn't bring any new and viable ideas to the table, Taylor also explained. This may be due to the fact that the activist investor is working with an ex-P&G executive who left the company nearly a decade ago and, as such, is completely out of touch with many of the organization changes that have been made since.

"A more focused company, we're there," Taylor emphasized. "A company that has people empowered and accountable, we're there today and we're executing. The last thing we need right now is a reorganization."

Bottom line, despite Peltz's five decades of experience in the consumer goods industry, he simply isn't what's right for the company right now.

"Many people tell me, 'Why not?' 'Why not' is not the governance standard for our company," the executive concluded.

Related Links:

Here's Why Procter & Gamble Is Wrong In Pushing Peltz Away

Peltz Says Procter & Gamble Suffers From A 'Suffocating Bureaucracy'

Posted-In: activist investorBiotech Jim Cramer Health Care Hedge Funds Top Stories Media General Best of Benzinga

 

Related Articles (PG)

View Comments and Join the Discussion!
Loading...
Loading...