Procter & Gamble (PG) said Tuesday that it activist investor Nelson Peltz has failed to win a seat on its board o of directors.
A preliminary count of proxy votes show that shareholders elected 11 P&G-backed directors. "We are encouraged that shareholders recognize P&G is a profoundly different, much stronger, more profitable company than just a few years ago," the company in a statement.
P&G shares fell after the early voting results were released at is headquarters in Cincinnati, Ohio, early Tuesday. The stock was down $1.30, or 1.4 percent, to $90.80 as of 11:57 a.m. Eastern time.
"We are encouraged that shareholders recognize P&G is a profoundly different, much stronger, more profitable company than just a few years ago," the company said.
Peltz's Trian Fund Management, which owns about $3.5 billion in P&G shares, was not ready to concede defeat, saying moments after the vote that it would await certified results, which appeared to have been decided by a razor-thin margin.
Almost 40 percent of P&G shareholders are small investors, and the final result appeared to pit them against institutional investors that backed Peltz.
Trian says that P&G has underperformed its peers for a decade.
But Procter & Gamble Co. says that since David Taylor was named CEO two years ago, the company has been moving in the right direction, and that giving Peltz a seat would disrupt the work that he is doing.
Shares of P&G have jumped 20 percent since Taylor took over.
"We met or exceeded our top line, bottom line and cash objectives during the last fiscal year," Taylor said in the shareholder meeting. "We delivered 28 percent total shareholder return during the past two years, well above P&G's peers during that same time frame and above both S&P indices."
Trian points out that it invested in the company two years ago and said that the shares have been pumped up by its ownership and interest.
Peltz has been on a winning streak and his influence is being felt in a number of boardrooms in the U.S.
On Monday General Electric (GE) announced that Trian co-founder Ed Gordon would join its board. The investment fund has pushed for years for the company to become a leaner industrial player. Trian became one of GE's biggest investors two years ago with a $2.5 billion investment.
Trian believes P&G's corporate structure has become too convoluted and it had proposed shrinking the number of overall divisions from 10, to three.
"The board owes it to the shareholders to really study the issues of structure and the issues of culture," Peltz said in a special shareholder meeting on Tuesday before the voting results were announced. "Culture -- culture's got to be open to outsiders, people, ideas and perspectives."
"P&G has some really terrific people, but we believe they're struggling under a suffocating bureaucracy," he added.