1. GE, Procter & Gamble in the hot seat: The boardrooms of General Electric and Procter & Gamble, two titans of corporate America, have been consumed by drama lately. Stay tuned for more this week.
Both companies are scrambling to put down revolts from investors angry about poor performance in two of the most widely held stocks in the U.S. In fact, the same activist shareholder, Trian Partners, is at the heart of both uprisings.
Trian waged the biggest board battle ever against Procter & Gamble (PG), a fight that ended last week in a contested vote. The maker of Tide, Crest, Gillette and other consumer brands said it won. Nelson Peltz, the billionaire activist in charge of Trian, refused to concede.
Against that backdrop, Procter & Gamble will release quarterly earnings on Friday morning. The numbers aren’t expected to be pretty, with sales projected to rise barely 1%. P&G’s sluggish results underscore why Peltz wanted to shake things up by trimming the number of business units at the company and launching new products to attract younger customers.
General Electric (GE), perhaps witnessing the heated board battle at P&G, took a friendlier approach towards Trian by offering Ed Garden, the firm’s co-founder, a seat on the board.
A management shakeup at GE has so far failed to restore confidence in the company. The changes included the retirement of longtime CEO Jeff Immelt and exit of Jeffrey Bornstein, the chief financial officer.
GE shares tumbled to a four-year low last week, leaving them down 27% in 2017. It’s the worst Dow stock this year by a long shot, especially compared with Boeing’s 68% surge.