Nelson Peltz, a founding partner of Trian Partners, released a 93-page white paper on Wednesday describing his plans to shake up .
Peltz's fund has a $3.5 billion stake in P&G and has been seeking a board seat, but his specific plans for the company had not been disclosed until now.
Perhaps the most ambitious part of the plan would restructure the organization as three global business units under a "lean holding company." The three would be divided as beauty, grooming and health care; fabric and home care; and baby, feminine and family care.
He also wants greater oversight over P&G's cost-savings plan, saying that the last time management tried, they didn't get a boost in profit or growth.
Several hedge funds are waging activist campaigns against American corporations, pushing for better accountability to shareholders. Some of these fund managers will speak at CNBC's Delivering Alpha conference next Tuesday in New York.
Peltz wants P&G's board to initiate a study to better understand why the "innovation machine is broken" – he said they haven't created a new leading product in two decades – since the Swiffer.
He wants the company to focus on small and mid-sized, local brands both through organic growth and mergers and acquisitions and is urging the company to improve its digital capabilities.
Peltz took aim at management, with a critical eye on performance under CEO David Taylor, although Peltz stopped short of calling for Taylor's removal. He did say that compensation was misaligned and that P&G was paying management for market share losses and bottom quartile profit growth.
He also urged P&G to recruit more from the outside, with a goal to have 25 of the top 100 executives with significant experience outside of the company.
In a statement, P&G said Trian has an "outdated" view of the company, which is "profoundly different" than it was a few years ago. P&G said it is "much better positioned from all angles" and is "successfully executing a winning strategy."
"We remain focused on delivering our plan, while preventing anything from derailing the progress we are making to create value for all P&G shareholders," P&G said.
In a letter dated April 1 to shareholders, CEO Taylor said, "Adding Nelson Peltz of Trian on our Board has the potential to derail the transformation we're leading at P&G."
"They're making recommendations based on outdated information and have not offered any new actionable ideas to drive value for P&G shareholders beyond the continued successful execution of the company's ongoing strategies and plan," he wrote.
In the meantime, Peltz pointed out in his report that P&G is spending $100 million to keep him off the board.