A Letter to P&G Employees

I am asking the P&G community for help.  This includes alumni, retirees, and current employees.

We See a Significant Change Coming for Most Large Companies Including P&G

  • We believe that 1/3 of the S&P 500 companies will restructure and be gone in the next ten years.

  • We believe that the remaining 2/3 will reduce their headcount by 50%.

  • In order to win, large companies will need to redefine what is kept inhouse and what is outsourced.

The 2018/19 Firm Forecast Process Will Involve the Board

  • Nelson Peltz will join the Board on March 1. He is an advocate for change, backed by P&G’s largest shareholders.

  • The 2018/19 Firm Forecast will be the first Order of Business for Mr. Peltz.

  • Mr. Peltz is advocating for a significant restructuring of the company, giving significant authority of the overhead spending and reporting lines to 3 newly formed business units.

  • The primary focus will be on SR&A spending. This includes what is spent inside and what is spent outside, as well as, who has control over the reporting lines and allocation of overhead.

  • If collaboration between the Board representing shareholders and Management representing employee interests does not improve, there could be another proxy fight with more Board seats and control of the Board in play.

Most P&G Employees May Not See What’s Coming

  • These are unusual times. Most in the P&G Community did not believe an activist investor could get a seat on P&G’s Board.

  • The interest of current employees and retired P&G employees, who own stock and stock options may be split.

  • Most employees are accustomed to long term stability, incremental change, and substantially all decision-making authority for the Board and Management held in the hands of P&G’s CEO.

  • David Taylor’s freedom to share what is happening inside the Board room could be very limited.

  • The days of keeping your head down, working hard, and retiring in your 50’s may not be the highest probability or best outcome for many loyal P&G employees.

  • To adequately prepare for change, employees will need advice and support and do not know who they can trust.

What Lenox is Doing to Help

  • Anticipating these possible changes, we expanded our capabilities to include career planning.

  • Lenox has entered into licensing and consulting agreements with United Capital, Kolbe, Strength Finder, John Maxwell, and others to help P&G employees sort through a combination of both their career options and financial planning opportunities.

  • We will be hosting a series of Wealth Creation seminars to help P&G employees understand their choices and how their career and financial plans go hand in hand.

How Can You Help

  • Lenox has not done many seminars in the past. We have not typically asked individuals to reach out to potential clients on our behalf. At the risk of being bold and out of character, we are asking for your help.

  • Please share this letter with current employees and other members of the community.

  • Encourage the employees you know to attend our next Seminar for the P&G Community on February 28th.


Sincerely Yours,

John C. Lame

CEO, Lenox Wealth

 

This material presented by Lenox Wealth is for informational purposes only. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Investments in securities and other investment products entail risk, including the risk of loss.  Opinions expressed are those of Lenox Wealth Management and are subject to change, not guaranteed and should not be considered recommendations to buy or sell any security.  The S&P 500 Index (“S&P 500”) is a market-value-weighted index consisting of 500 stocks chosen for market size, liquidity, and industry group representation and does not include the reinvestment of dividends. The S&P 500 is an unmanaged composite and investors cannot directly invest in the index.