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Governance

CalSTRS, Texas Teachers join Trian in proxy fight with Procter & Gamble

Nelson Peltz

CalSTRS and the Texas Teacher Retirement System are backing alternatives money manager Trian Fund Management in its proxy fight with Procter & Gamble Co.

According to their proxy-voting disclosures, the pension funds support the election of Nelson Peltz, Trian Fund Management's founding partner and CEO, to P&G's board of directors.

"Mr. Peltz's experience in the consumer product space will add value to Proctor & Gamble's board, and his significant stake in the company will bring an owner's perspective inside the boardroom," said Anne Sheehan, director of corporate governance at the CalSTRS, in an emailed statement. "CalSTRS believes the addition of Mr. Peltz to the board is best for P&G, the CalSTRS fund and ultimately, the teachers of California."

The $213.7 billion California State Teachers' Retirement System, West Sacramento, holds about 5.6 million shares of P&G stock valued at about $508 million and has been an investor with Trian since April 2011, according to the statement.

CalSTRS also supported the election of four Trian candidates, including Mr. Peltz, to the board of E.I. du Pont de Nemours & Co. in 2015. Trian lost that proxy contest.

Trian, which has a roughly $3.3 billion stake in P&G, argued in a July news release that adding Mr. Peltz to the board will help P&G overcome some of the challenges it has faced over the past decade, including weak total return to shareholders, falling market share and "excessive cost and bureaucracy."

"As a member of the board, it would be my goal to help improve performance by increasing sales and profits and regaining lost market share. I also believe the board must address the company's structure and culture. I can add far more value operating within the P&G boardroom than by merely looking in from the outside," Mr. Peltz said in the news release.

Consumer goods manufacturer P&G disagrees. In a statement Friday, P&G said Mr. Peltz's timing is late because the company is already "in the middle of a successful transformation that is delivering results" and Mr. Peltz's suggestions lack substance.

CalSTRS and the $139.7 billion Austin-based Texas Teacher Retirement System also support the election of eight or more other directors nominated by Procter & Gamble and supported by Trian. Proxy-advisory firm Institutional Shareholder Services recommended in a Sept. 29 report that shareholders elect Mr. Peltz to P&G's board.

P&G's shareholder meeting is Oct. 10.