NEW YORK (Reuters) - Institutional Shareholder Services, the influential proxy adviser, said on Friday shareholders in Procter & Gamble Co (PG.N) should vote activist investor Nelson Peltz to the board of the consumer goods company.
Peltz’s Trian Fund Management disclosed a $3.5 billion stake in P&G this year and announced the nomination of Peltz to the company’s board, setting off a bitter proxy battle with the maker of Crest toothpaste and Gillette razors.
“The addition of one well-qualified nominee, who holds a large economic stake, appears likely to have benefits that outweigh the potential risks,” ISS said. “Support for dissident nominee Peltz is recommended.”
P&G said it fundamentally disagreed with ISS’ conclusion.
“Change is not warranted when a highly engaged Board is overseeing a plan that is working. We firmly believe adding Nelson Peltz to the P&G Board would derail our progress,” the company said in a statement.
The company has argued that Peltz’s plan to boost shareholder value by organising the company into three largely autonomous business units would result in higher costs, lower profits and another restructuring that could lead to a breakup of the company.
Last week Glass Lewis, another proxy advisory firm, recommended that shareholders vote in favour of Peltz.
Cincinnati-based P&G’s annual shareholder meeting is scheduled for Oct. 10.
Reporting by Carmel Crimmins and Carl O'Donnell; Editing by David Gregorio and James Dalgleish