Procter & Gamble Co. (PG:US) Chief Executive Officer Bob McDonald, under pressure from activist Bill Ackman, told shareholders the company is “focused like a laser” on its plan to boost productivity and innovation.
“We recognize the need to improve our performance, and we’re working hard to do that,” McDonald told several hundred shareholders at the company’s annual meeting at the Aronoff Center for the Arts in Cincinnati today.
P&G is working to save $10 billion in costs through 2016, as it also seeks to develop more blockbuster products. McDonald faced shareholders for the first time since Ackman’s Pershing Square Capital Management LP took a $1.8 billion stake in July. Ackman has pushed to replace McDonald and split the CEO and chairman roles, according to a person familiar with the matter.
McDonald faced little criticism during the event, although one shareholder asked what the company was doing to overcome a languishing stock price (PG:US).
McDonald told her that sticking to the company’s plan to boost productivity and innovation would best help shareholders.
“We are holding our own feet to the fire do this,” McDonald said.
All 11 directors, including McDonald, were re-elected at the meeting for another year.
P&G fell (PG:US) 0.6 percent to $68.70 at the close in New York. The shares have advanced 3 percent this year.
McDonald is “doubling down on the plan, and now it’s up to him to execute,” said Matt McCormick, a fund manager at Bahl & Gaynor Inc. in Cincinnati, with 4.9 million P&G shares as of June 30, in an interview.
McCormick said one unscripted moment at the end of the meeting gave him optimism that McDonald has a “high degree of confidence” that the turnaround will work. After the last shareholder to speak complimented McDonald at length, the CEO told the man to hold onto his shares.
“You’ll be glad you did,” McDonald said.
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