Procter & Gamble 2023. Our proposal for Fair Elections is just one of several issues to be voted on before or during the Procter & Gamble (PG ) annual meeting on October 10, 2023, at 9:00 a.m. Pacific. Attend the annual meeting online. I always recommend that you vote in advance. However, you will also be able to vote easily during the meeting with your control number IF, voting isn’t cut off right after all proposals have been presented.
Vote FOR Biggs, Bonini, Portman, Subramaniam; Against all other directors. Vote AGAINST the Auditor, Pay, #5 Audit of Reverse Discrimination, FOR item #7 Fair Elections. Note: If you vote online and leave blanks, those blanks will be filled in, not as abstentions, but as if you had voted as the Board recommends. That’s not exactly democratic corporate governance.
The Procter & Gamble Company provides branded consumer packaged goods worldwide. It operates through five segments: Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine & Family Care. I voted with 30% of the Board’s recommendations. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Or, look it up on CapEdge, which offers many free tools.
Read Warnings. Good corporate governance generally results in better profits and a better society. However, I don’t prioritize profits over our natural environment and human needs, especially when companies externalize costs. (see The Shareholder Commons)
2023: ISS Rating
The Procter & Gamble Company’s ISS Governance QualityScore as of September 28, 2023 is 3. The pillar scores are Audit: 8; Board: 3; Shareholder Rights: 5; Compensation: 1. Corporate governance scores courtesy of Institutional Shareholder Services (ISS). Scores indicate decile rank relative to index or region. A decile score of 1 indicates lower governance risk, while a 10 indicates higher governance risk.
Procter & Gamble 2023: How We Voted Board Items
| Item | Egan-Jones Recommendation | |
|---|---|---|
| 1A-1N – Election of Directors | FOR Biggs, Bonini, Portman, Subramaniam AGAINST all other directors. | |
| 2 – Ratify the Registered Public Accounting Firm (Auditor) | AGAINST | |
| 3 – Advisory Vote on Executive Compensation (Say on Pay) | AGAINST | |
| 4 – Advisory Vote on Frequency of Executive Compensation Vote | 1 YEAR | |
| 5 – Shareholder Proposal – Civil Rights Audit of Reverse Discrimination | AGAINST | |
| 6 – Shareholder Proposal – Annual Report on Operations in China | ABSTAIN | |
| 7 – Shareholder Proposal – Fair Elections | FOR |
I had help with my voting from Egan-Jones, my proxy voting policy through iconikapp, metrics from boardroomalpha, and I briefly looked at some funds that announced their votes in advance.
You can automate all your proxies to be voted according to human values by signing up for the iconik/AYS app. In about two minutes, you’ll vote all your proxies according to values that balance environment, social, governance, and profitability. More information at Free Proxy Advisor From As You Sow & Iconikapp. I have a more customized version, so your results with the iconik/AYS app may differ. You can also sign up for automated voting with iconikapp through Third Act. Boardroomalpha estimates how much directors may contribute to company profitability through measures that include the performance of other companies where they are or were directors. 
Procter & Gamble 2023: Directors
Egan-Jones recommended against Luindgren, Moller, Jimenez (both also overboarded in my mind), McCarthy, Lee, Allen, and Kempczinski, based on being considered affiliated after ten years or more (I added Braly and Woertz, who have also overstayed), being on the compensation committee when they recommend against pay, and against the chair because of cyber security risks (I also voted against the chair for not being independent). From Iconikapp, I also voted against Chang for being on the nominating committee where the board chair is not independent and it helped with directors mentioned in parentheses.
I am just starting to tinker around with Boardroomalpha but it did help me feel better about my vote for Subramaniam, appears to add value. However, Boardroomalpha, reports insiders at P&G sold over $62M of their stock and bought $0. Why are we investing in P&G?
Additionally, I am sympathetic to the arguments made by descendants of James Gamble and William Procter, the company’s founders, who are significant shareholders in their own right. They recommend against Moeller, Jimenez, Braly, and Woertz.
My conclusion was to vote FOR Biggs, Bonini, Portman, and Subramaniam (all have served a year or less); Against all other directors.
Procter & Gamble 2023: Board Items #2-4
Vote AGAINST the Auditor. Even with auditor rotation within the contracted firm, I agree with Egan-Jones that, over time, many are essentially captured. They are troubled when a company contracts with the same firm for more than 7 years. Procter & Gamble’s auditor has been Deloitte & Touche LLP for 133 years. That’s too long.
Vote AGAINST. $21.7M is too much for one year. That’s 339 times the median pay at P&G. As You Sow’s The Most Overpaid CEOs 2023 estimates the CEO was paid $9.2M too much and ranked the Company as the 51st worst offender.
Vote 1 Year for Frequency of Say on Pay. We want accountability every year, not less frequently
Procter & Gamble 2023: How We Voted Shareholder Proposals
Procter & Gamble 2023: #5 Civil Rights Audit of Reverse Discrimination
While I do see some danger in “treating people according to labels of race, sex, and orientation, I don’t believe there is any truth to the National Center for Public Policy Research‘s contention that “those discriminated against—are straight white civilian men.”
Procter & Gamble 2023: #6 Report on Operations in China
I’m generally wary of proposals by the National Legal and Policy Center, which I consider as too right-wing for my taste. Although I concur that our Company needs to pay close attention to its dependency on China and on its human rights policies, I am unsure that an annual report is the best mechanism. I abstained.
Procter & Gamble 2023: #7 Fair Elections (labeled Request to Require Shareholder Approval for Certain Future Amendments to Company Regulations)
Of course, I voted for proposal #7, by my wife Myra K. Young, which I wrote. You can set your settings in the Iconikapp to always vote for our proposals.
The proposal simply seeks a commitment by Procter & Gamble not to require disclosure by nominating stockholders of limited partners and other information not typically required of directors on the Company’s own nominating committee. However, it does provide that if the Board finds it in the best interest of Company stockholders, they can adopt such provisions and have them ratified by stockholders within a year.
Generally, we seek to discourage requirements that create a severe and intended obstacle for activists. The identity of limited partners is traditionally kept confidential. Disclosure requirements may require a breach of prior agreements.
As Egan-Jones notes: We believe that approval of this proposal will ensure shareholders can vote on any proposal that would impose inequitable restrictions.
The Board’s opposition statement argues in part that shareholders have “additional protective measures to ensure Board accountability, including, but not limited to, proxy access, the right to call a special meeting, and annual elections of Directors.” However, proxy access, for example, offers little protection, since the only time it has been used was to return a cofounder to the Joint Corp. in 2019. (Sidley, Proxy Access: A Five-Year Review).
Proxy access was supposed to give shareholders access to nominating directors but has been a failure. Universal proxies as a mechanism to improve choice and a fairer election process could go the same route unless we discourage the use of advance notice bylaw provisions that effectively make contests nearly impossible.
Please Vote FOR proposal Number 7.
Procter & Gamble 2024: Mark Your Calendar
We anticipate that the 2024 annual meeting of shareholders will be held on Tuesday, October 8, 2024. Pursuant to Rule 14a-8 of the Exchange Act, to be considered for inclusion in the Company’s proxy statement for presentation at that meeting, all shareholder proposals must be received by the Company on or before the close of business on April 27, 2024.
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