Procter & Gamble declared victory Tuesday over activist investor Nelson Peltz, saying initial figures show it won the biggest proxy battle in history. But the narrow win puts pressure on the owner of Bounty and Tide to move faster in its turnaround and regain the support of investors.
"The preliminary proxy results are ones I'm pleased with," said CEO David Taylor on CNBC. "I know from talking to many investors, they support the strategy. Do they want to see us move faster — I'm sure — and we're moving faster."
P&G will file results with the Securities and Exchange Commission when the vote is finalized.
Trian has already said it plans to challenge the proxy results. Peltz added in an interview with CNBC that regardless of the outcome he will continue to advocate for the company to follow his recommendations, which include streamlining its structure and small acquisitions of innovative brands.
"I don't think they're serving their shareholders properly. I don't think they have a structure today that's right for that business," Peltz said.
Peltz's fund Trian Partners revealed a roughly $3.5 billion stake in P&G in February and in June nominated him for a board seat.
P&G shares closed Tuesday down less than 1 percent.
The consumer goods giant has for years struggled with market share as sales have slowed and it faces competition from more innovative or upstart brands. Under Taylor, who joined as CEO in 2015, the company simplified its corporate structure, streamlined its portfolio, poured more money into research and development and worked to improve operations.
With a market capitalization of $230 billion, P&G is the largest company to have fought a proxy fight and one of a few companies larger than $50 billion. Others include DuPont, which defeated Peltz in 2015 and Automatic Data Processing, which is ongoing.
Although Peltz wasn't named a DuPont director, he did show an ability to influence the company's actions from outside the boardroom. DuPont ultimately combined with Dow Chemical.
Activists often target smaller companies, because it is easier for them to buy shares that can impact the vote. Companies often settle rather fight proxy battles, because they can be costly and distracting.
At the crux of the battle was P&G's claim it had already launched initiatives to solve the problems that Peltz said he had identified. Peltz argued the efforts were insufficient.
To support its cause, P&G enlisted the help of four banks: Goldman Sachs, Morgan Stanley, Centerview and Lazard, as well as its former chief executive, A.G. Lafley.
Peltz recruited P&G's former CFO, Clayton Daley, and won the support of all three proxy solicitors, Egan-Jones, Glass Lewis and ISS. The firms' opinions can sway but not always determine shareholders' votes.
Combined, the two spent $60 million on the battle as they fought to woo P&G's major shareholders and large retail investor base.
"If a company has a good management team, a good board and a good strategy, it's going to win a proxy fight with activist investors," said Scott Barshay, a partner and senior dealmaker at law firm Paul Weiss.
Of P&G's top three shareholders, State Street Global Advisors and BlackRock sided with Peltz, while Vanguard backed P&G, according to sources familiar with the matter.
Retail shareholders largely supported management, according to analysts' estimates based on the results.
Brett Barakett, a P&G alumnus and investor, voted in favor of his former employer.
"We think they are already far down the path of doing what is needed," said Barakett, the founder and CEO of Tremblant Capital. "P&G has taken the correct strategic steps in this rapidly changing world."
To be sure, the vote's thin margin means there remains work for P&G to do in order to regain the support of a large percentage of its shareholders. Peltz said he will continue to be active from the sidelines, which should keep up the pressure.
"We believe the close vote should send a message to the board that shareholders are losing patience and no longer willing to settle for sub-par total shareholder returns and ongoing share losses," said Bonnie Herzog, an analyst at Wells Fargo.