P&G Battles Shareholder Proposal Amid SEC Rule Changes

Procter & Gamble is facing pressure from shareholders to keep its annual meeting ballot open to smaller investors, amid efforts by the federal government and corporate lobbying groups to raise ownership thresholds.

The National Legal and Policy Center has circulated a report urging P&G investors to vote in favor of Item 5 at the company's October 13 annual meeting, which would lock in today's ownership levels of $2,000 for three years.

This move comes as the Securities and Exchange Commission has stopped reviewing company decisions to throw shareholder questions off the ballot, allowing companies to unilaterally exclude proposals without oversight. The SEC is also planning to scrap the federal shareholder-proposal rule entirely and hand the matter to the states, where the price of admission can run far higher.

P&G's board claims that the proposal is 'premature' and 'harmful', but NLPC argues that it simply keeps the door open for smaller shareholders. The company has a history of keeping shareholder proposals off its ballot, hiring an outside law firm to do so in each of the last two years.

The board's opposition is led by Shailesh Jejurikar, P&G's chairman and chief executive, who sits on the board of Business Roundtable - the CEO lobby that asked the SEC to raise ownership thresholds. This conflict of interest has not been acknowledged by the company.