The annual general meeting, or annual meeting of general shareholders, is typically the only time during the year where the everyday shareholder can interact with a company’s senior management. It is a time where the CEO discusses how the company has been doing and how management has plans in place to allow the company to perform above their peer set. I attended the annual shareholder meeting at P&G on 10/10/17 and would like to share with you what that experience was like.
It was held in the towers portion of P&G’s general offices downtown. First, I checked in where they verified I was a P&G shareholder as of the specified date. I then went through airport-like security and found myself in the rotunda where they had ample food and drink. I arrived early enough to secure a seat in the P&G auditorium, as opposed to the two overflow rooms where latecomers were seated. If I had to guess I would have put the attendance at around 300-400 people.
As it got closer to starting, the Board of Directors entered the auditorium to a general applause. These high-profile business people included Meg Whitman (Hewlett Packard Enterprise CEO), James McNerney (recently retired Boeing CEO), Ernesto Zedillo (former President of Mexico), and Terry Lundgren (Macy’s CEO), among others of equal status. David Taylor (P&G CEO) took the stage and was flanked to his right by Deborah Majoras (P&G’s chief legal officer and former Chairman of the FTC) and Jon Moeller (P&G CFO). The meeting commenced with a call to order.
The various proposals to be voted on were then discussed. By far, the most newsworthy vote was on Item 1 which was the Election of Directors. The Board’s recommendation was for the 11 director nominees. This is not usually met with much resistance, however, this year Nelson Peltz, founding partner of Trian Fund Management, was also running for a board seat. David Taylor allowed Peltz six minutes to discuss his case on why he should be elected to the Board, after which time Taylor reiterated that the Board does not recommend a vote in favor of Peltz. After Item 1, the various other items where discussed, which included Board proposals such as ratifying the independent public accounting firm, and the proposal for an advisory vote on executive compensation. The discussion then turned to shareholder proposals such as the report on mitigating risks of activities in conflict-affected areas, and a report on the application of company non-discrimination policies in states with pro-discrimination laws.
After the proposals were discussed, David Taylor walked through a ‘Report on the Business’. He provided perspective on where P&G has been, where it is going, and how the company plans to get there. Once the Report on the Business was complete, it was time for the question and comment period before the final adjournment. This is where it could become more animated as any shareholder can have up to two minutes of mic time (there literally is a bell that dings at two minutes) to voice their opinion or ask a question. The CEO is the moderator if someone steps out of line, however, that did not happen at this meeting. During this portion, shareholders questioned the Board on their previous CEO picks and how they pick their executive compensation targets. Shareholders asked why P&G has sold so many brands to companies that do a better job managing them. They asked why they, as shareholders, have been inundated with proxy materials at such a cost to the company. I will say that David Taylor did
an excellent job in respecting and responding to every shareholder that asked a question in that 30-minute period.
After the question and comment period, David Taylor asked for a brief pause, at which point they counted the votes that were cast at the meeting, adding them to the tally from the online and paper proxies previously voted. It was here that he remerged and noted that the preliminary vote count for Item 1 was to elect the 11 nominated Board directors which in turn meant that Nelson Peltz had lost his bid to gain a seat on P&G’s Board of Directors. A standing ovation ensued. Taylor then gave the preliminary results of the remaining outstanding items which all went the direction of the Board’s recommendation.
Overall, it was a well-orchestrated event and it was nice to have the preliminary results tabulated before we all left.
P&G is an example of the type of stock that we use to build The HCM Dividend Growth Portfolio™. This portfolio provides the opportunity for appreciation that comes from equity exposure, while giving investors a growing stream of income through market cycles.
If you want to discuss this article in further detail or just talk about P&G, feel free to reach out to me at [email protected].
Date Posted:10-13-17. Information provided in this article is meant for educational purposes only and financial education is important to us. This article should not be taken as advice to buy, sell, or hold P&G stock. Before making decisions regarding your personal financial situation, please consult an advisor or conduct your own due diligence. If you would like to discuss your P&G Retirement Income Plan with an HCM Wealth Advisor, please give us a call – 513-598-5120. Located in Cincinnati, Ohio, we serve clients in 23 states, and we’d be honored to help.