P&G’s growth has slowed. Shareholders vote Tuesday.

Boardroom Alpha · Executive Brief

Underlying sales growth at Procter & Gamble (PG) has slowed three years running, its stock has trailed the market, and its new chief executive, Shailesh Jejurikar, became chairman too in August. Shareholders get their say on Tuesday.

Most of the ballot is routine: every current director drew at least 96% last year, and say on pay has passed with 90.6% to 92.2% for five years. One item is not. A proposal to protect small investors’ right to file shareholder proposals comes to a vote weeks after the SEC proposed scrapping the rule behind it. Here is our read, item by item.

The record: steady, not stellar

P&G returned 14.1% over the three years to Oct. 9, far behind the S&P 500’s 86.7% and the 35.6% for consumer-staples stocks. Its total return for the fiscal year to June was −5.3%. Most of the lag came under Jon Moeller, CEO from November 2021 to December 2025, when P&G returned 2.6% a year against 4.9% for consumer staples; under his predecessor, David Taylor, it returned 14.3% a year. Against US-listed household-products rivals such as Clorox and Church & Dwight, its returns sit near the middle: ahead of their median over three and five years, behind it over the past year. Its sales growth ranks lower: over the three years to June it was in the bottom third (31st percentile) of the 14 consumer-products companies its pay plan measures it against.

Organic sales growth, which strips out currency and acquisitions, has slowed every year since fiscal 2023, to 1.4% in the year to June. All of it came from higher prices; volume was flat. Core earnings per share, which exclude restructuring and other one-time costs, rose 0.9%. The fourth quarter, Jejurikar’s second as CEO, was weaker: organic sales were flat and core earnings per share fell 3%.

This fiscal year P&G expects organic sales growth of 1% to 3% and core earnings growth of 0% to 3%, after absorbing about $1 billion after tax in higher costs for raw materials, energy and transport. A restructuring announced in June 2025 carries $1 billion to $1.6 billion of pre-tax charges over two years. The business still generates cash: free cash flow beat its target, and P&G returned more than $15 billion to shareholders, $10.2 billion in dividends and $5 billion in buybacks. Net of shares issued to employees, buybacks have cut the share count by about 1.4% since late 2023.

Our read: More than two-thirds of the gap to the S&P 500 is the sector’s. The 21 points by which P&G trails consumer staples, and the slowdown in growth, are its own. That shapes two items on this ballot. The board gave the new CEO the chair as well after three years of slowing growth, and the pay plan has to show that it pays less when growth stalls.

Who decides

Index funds hold about a third of P&G’s shares. Last year every fund family casting more than 1% of the votes backed the pay plan, according to the vote reports funds file with the SEC each year, and those that reported their other votes also backed every director and the auditor and opposed the one shareholder proposal. Had Vanguard alone opposed the pay plan, support would have fallen to about 78% from 92.2%. Vanguard’s share of the votes is larger than its share of the stock because not every share gets voted. The investors that publish their votes before the meeting, mostly pension funds and managers outside the US, show the arguments being made, not the likely result.

The board: one person at the top again

Jejurikar, 59, was P&G’s chief operating officer before succeeding Jon Moeller as CEO on Jan. 1. Moeller stayed on as executive chairman until July 31, so for seven months the roles were split, though neither holder was independent. The non-employee directors recombined them on Aug. 1. The proxy statement cites the board’s “confidence in Mr. Jejurikar’s leadership, his depth of experience,” and the value of “his unified leadership,” and says the board can separate the roles again. Joseph Jimenez, a director since 2018, remains the independent lead director, with the power to approve board agendas and call meetings of the independent directors.

Some investors that publish their votes early, including BCI, the British Columbia pension manager, are opposing Jejurikar or Jimenez over the combined role. Desjardins and University Pension Plan Ontario opposed nine directors who, in Desjardins’ words, own “no company stock.” Those nine hold restricted stock units rather than shares outright: awards granted as pay that convert to stock later and count toward P&G’s ownership rule. Desjardins also opposes Craig Arnold, who joined in 2025, for sitting on more than two outside boards, including as chair of Honeywell Aerospace.

Our read: The board is fresh: nine of the 12 nominees joined in 2021 or later, and three run other public companies: McDonald’s, FedEx and Insulet. The units do tie directors’ wealth to the stock, and several directors chose to take their cash fees in units too. But they were granted as pay, not bought. We like to see directors buy and hold shares with their own money, a sign they believe they can deliver for shareholders and want to be one. We found no open-market purchase of P&G stock by any director or executive in Form 4 filings since 2016, and only two of the 11 outside nominees, Jimenez and Ashley McEvoy, hold shares outright. The bigger issue is leadership. P&G has not had an independent chair in at least five years, and the board recombined the roles less than a year into the new CEO’s tenure. As chairman he now sets the agenda of the board that oversees him, with the lead director’s approval; the independent directors review his performance in private sessions led by Jimenez. In our view the move came early, and it puts the weight of independent oversight on the lead director.

Say on pay: results below target, and payouts too

The pay vote covers a handover year: fiscal 2026, which ended in June, had two CEOs, six months each, both paid mostly in stock and options. Jejurikar’s reported pay was $18.98 million and Moeller’s $19.07 million. Jejurikar’s regular equity award in October 2025, $14 million, was about double the prior year’s; its size was set in July 2025, when P&G named him the next CEO. The proxy ties it to market data, his role as chief operating officer, his contributions and his “planned transition” to CEO; there was no separate promotion or sign-on grant. His salary rose to $1.6 million from $1.175 million, and his bonus target to 200% of salary from 140%. He holds about $13.8 million of P&G stock and share units, excluding options, or about 8.6 times his salary, above the eight times P&G requires.

The formulas cut the other way. Organic sales and core earnings growth were both within the company’s 0% to 4% guidance but short of the 2% midpoint the bonus formula uses, so the annual bonus paid 60% of target. Performance shares, stock awards that vest on three years of results, paid 69% for 2023 to 2026, held down by the low sales-growth ranking; cash generation, the one measure that beat its goal, paid 128% of target. “Compensation actually paid,” a required disclosure that values stock awards at the year-end share price, was $10.8 million for Jejurikar and $2.7 million for Moeller, well below their reported pay.

A few investors that publish their votes early have voted against the plan. BCI said it “does not sufficiently align pay with performance.” Others cited the size of executive pay, the clawback policy and how much the bonus targets disclose.

Our read: The case for the plan is stronger. Results missed and the plan paid well below target, which is how it is meant to work. Two design points are worth watching. The pay committee set the company-wide bonus target at the midpoint of the company’s own guidance, a modest bar, and 70% of the bonus rests on the committee’s judgment of each business’s results, with no numeric targets disclosed. The new CEO’s package is about his predecessor’s level, and the test ahead is concrete: the performance shares granted last year target core earnings growth of 5.3% a year over three years. After 0.9% in the first year, reaching it would take about 7.6% a year, against guidance of 0% to 3% for this year.

Three shareholder proposals

Special meetings at 15% (Item 4)

The Accountability Board asks P&G to let holders of 15% of the shares call a special meeting, down from 25%. It calls the right “a critical accountability tool” and 25% “prohibitively high,” noting that Ohio law lets shareholders act without a meeting only if all of them agree, and cites General Motors and Salesforce, where P&G directors also sit, which use 15%. The board says 25% matches Ohio’s default and, citing FactSet, that more than half of S&P 500 companies with the right set it at 25% or higher; that special meetings are costly and distracting; and that 15% could let a small group force a meeting on a matter without broad support. It also points to rights shareholders already have, including annual director elections and the ability to nominate directors on the company’s ballot. Similar proposals at large US companies drew a median of about 41% support over the past two seasons, and few passed. In the latest season, most of BlackRock’s fund votes went against all 35 such proposals at US companies worth about $9 billion or more on which it reported votes; Vanguard’s and State Street’s backed five each.

Our read: We think the bar should stay high. A special meeting takes real time, effort and money, so calling one should take a meaningful, though not overwhelming, group of shareholders. A high bar also tends to keep special meetings for issues that bear on the business and its financial results, which is where we think directors’ attention belongs. At P&G, 25% clears that test: even the three largest index managers together hold less than that, so it would take a broad coalition. The proposal is likely to fail.

Who can file proposals (Item 5)

Today any investor with $2,000 of stock held for three years can put a proposal on P&G’s ballot under the SEC’s Rule 14a-8. The National Legal and Policy Center asks P&G to commit to keep those thresholds even if federal rules later allow higher ones. In the proxy the board argued in part that the request was premature because “no proposed rule has been published.” Then, on Sept. 16, the SEC proposed scrapping Rule 14a-8 entirely. P&G kept its recommendation in an Oct. 7 supplement to the proxy, saying the SEC’s proposal “may not be adopted.” It committed to a “thoughtful and thorough review” of whatever rules result, argued that the board should keep its discretion until then, and said it “will continue to comply with Rule 14a-8 while the rule remains in effect and binding on the Company.”

Our read: We think the board’s approach is the right one for now. The proposal has no clear link to P&G’s business or returns, and with the rules in flux, complying with Rule 14a-8 while it stands and waiting for the SEC to settle the question is a reasonable line. Locking in a policy tied to a rule that may change or disappear adds little. Norges Bank Investment Management, which runs Norway’s sovereign wealth fund, opposes it after what it calls “constructive engagement” with the company. If the rule is scrapped, the board should say what process it will follow.

A report on charitable giving (Item 6)

The Bahnsen Family Trust asks for a yearly report listing donations above $5,000 and identifying those “least germane to corporate value while posing the greatest risk” to P&G’s reputation. Its statement names the Trevor Project and the Human Rights Campaign. The board says P&G already reports its giving in its Citizenship Report and that the request turns on subjective judgments. Similar proposals at large companies drew a median of about 1% support in each of the past two seasons, and none passed.

Our read: This would add little for shareholders. P&G already reports its giving, a $5,000 cutoff at a company worth about $350 billion would produce a long list of gifts too small to bear on its value, and ranking donations by controversy is a judgment, not a disclosure. BCI, which publishes its votes, called it “written in a prescriptive way.”

Also on the ballot

Shareholders also vote on ratifying Deloitte, P&G’s auditor since 1890, according to its report in the 10-K. Support was 93.7% in each of the past two years, down from 99% in 2016; some investors that publish their votes cite the length of the relationship. Nothing in the record points to a problem with the audit itself.

What to watch

• Oct. 13
  The annual meeting. P&G must report the results in an 8-K by Oct. 19.
• Proposal rules
  Whether P&G says how it will handle shareholder proposals if the SEC scraps Rule 14a-8, as part of the board’s promised review.
• SEC comment period
  Comments on the SEC’s proposal run for 60 days after it appears in the Federal Register, according to law-firm summaries; a final rule would follow.
• 2027 proxy
  The first full year of Jejurikar’s pay as CEO, and a broader relative-return adjustment to performance shares that the pay committee approved in August.

Sources: P&G’s 2026 proxy statement and its Oct. 7 supplement, its 10-K and 8-K filings; Boardroom Alpha data on vote results, fund vote reports, 13F holdings and prices; and votes investors published before the meeting. Returns run to the Oct. 9, 2026 close. Boardroom Alpha is an independent research and analytics company and does not invest. This brief is for information only and is not investment advice or a proxy solicitation.