Procter & Gamble Co (PG.N) said it appointed Nelson Peltz to its board despite the activist investor narrowly losing a months-long proxy fight, the biggest ever involving a U.S. company.
The company’s shares were up 1 percent in after-market trading on Friday.

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Immediately after its annual meeting in mid-October, P&G said it beat Peltz by a slim margin, but a preliminary tally by an independent election inspector, released a month later, showed otherwise.

“Because the election results were so close, and because a large number of shareholders voted for Nelson Peltz to be a director, the board has engaged in numerous discussions with Mr. Peltz regarding a board seat,” P&G said on Friday.
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The consumer goods conglomerate said it increased its board size by 2 to 13 – to accommodate Peltz and appoint a new director in Joseph Jimenez, CEO of drugmaker Novartis AG .

P&G said it had recounted nearly two billion votes, many of which were paper ballots.

The recount showed that shareholders elected all eleven P&G nominees, including Ernesto Zedillo, for whom the votes cast were extremely close to those for Peltz.

Following recent discussions, Peltz and P&G agreed that the company would not be predisposed to take on excessive debt, reduce R&D spending, advocate for a break-up of the company or move the company out of its headquarters in Cincinnati – demands Peltz had made during the proxy battle.
Procter & Gamble Co91.0
PG.NNew York Stock Exchange
+0.12(+0.13%)
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“I look forward to bringing fresh perspectives to the boardroom, and working collaboratively with (CEO) David and the rest of the board to drive sustainable long-term shareholder value at P&G,” Peltz said in an email.

Peltz’s appointment is the latest twist in a contest that saw the two sides collectively spend more than an estimated $100 million on mailings, phone calls and advertisements to woo investors.

Peltz’s appointment is effective March 1 and the company also committed to re-nominate the investor as part of its board slate for next year’s annual meeting, P&G said.

The company also said it would link executive compensation to its sales and stock performance.

Reporting by Siddharth Cavale in Bengaluru; Editing by Sriraj Kalluvila

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