Good morning, ladies and gentlemen. Welcome to the P&G Annual Shareholders Meeting. Would you please take a moment and turn off all cell phones while the meeting is in session? In order to handle our business expeditiously today and provide time for shareholder questions, we've established a few simple rules about the conduct of the meeting. Each of you should have a copy of the agenda. On the left-hand side of the agenda booklet are the guidelines for the conduct of the meeting. We ask that you cooperate in following these guidelines. In fairness to all shareholders, we intend to enforce the rules. A digital clock appearing in the lower right-hand corner of the screen will count down the time remaining for each speaker. When we open the microphones for comment, please go to the nearest microphone if you wish to speak and identify yourself to the attendant.
Please state your name and affiliation clearly and speak directly into the microphone so that everyone can hear what you have to say, and so we have a clear recording to assist in preparing the official record of the meeting. I would like to remind you that comments regarding proposals will be limited to the time when the proposals are introduced. We won't revisit these discussions later in the meeting during the general question and comment section. Please be aware that the presentation today will contain references to some non-GAAP financial measures. The required reconciliations to GAAP numbers can be found on the company's website at www.pginvestor.com. The remarks and responses here today may also contain statements about our future business prospects.
For a discussion of factors that could cause the company's actual results to differ materially from those forward-looking statements, please see the company's most recent 10-K, 10-Q, and 8-K reports, which are also available on the company's website. Now, please stand for the national anthem.
Good morning, ladies and gentlemen. Let's thank P&G's very own African Ancestry Leadership Network, Voices of Destiny Choir. I'm David Taylor, Chairman of the Board, President and Chief Executive Officer of The Procter & Gamble Company. I'd like to welcome everyone to P&G's 2016 Annual Meeting of Shareholders. I'd also like to welcome all of our shareholders who are watching this meeting online. This meeting is now called to order. Notice that the meeting was sent to every shareholder of record, and a quorum is present in person or by proxy. Now I'd like to get started with the introductions. Here with me on stage is Jon Moeller, our Chief Financial Officer, and Debbie Majoras, our Chief Legal Officer and Secretary. Seated in the front row are the members of the Board of Directors. Would each of you please stand as I introduce you?
Frank Blake, former Chairman of the Board and Chief Executive Officer of The Home Depot, Inc. Angela Braly, former Chair of the Board, President, and Chief Executive Officer of WellPoint, Inc., now known as Anthem. Angela is the Chair of the Governance & Public Responsibility Committee. Ken Chenault, Chairman and Chief Executive Officer of the American Express Company. Scott Cook, Chairman of the Executive Committee of the Board of Intuit. Scott is the Chair of our Innovation & Technology Committee. Sue Desmond-Hellmann, Chief Executive Officer of the Bill & Melinda Gates Foundation. As previously announced, Sue has decided not to stand for re-election to our board, so today will be her last day as a director. Sue has been a valuable member of our board for the past six years, and we will miss her wisdom and her insight.
Please join me in thanking Sue for her service for our company. Thank you. Terry Lundgren, Chairman and Chief Executive Officer of Macy's, Inc. Jim McNerney, Senior Advisor at Clayton, Dubilier & Rice, LLC, and retired Chairman of the Board and former Chief Executive Officer of Boeing. Jim is also our Lead Director and Chair of the Compensation & Leadership Development Committee. Meg Whitman, President and Chief Executive Officer of Hewlett Packard Enterprise and Chairman of the Board of HP Inc. Pat Woertz, retired Chairman of the Board and former Chief Executive Officer of Archer-Daniels-Midland Company. Pat is the Chair of our Audit Committee. Ernesto Zedillo, former President of Mexico and current Director of the Yale Center for the Study of Globalization and Professor of International Economics and Politics at Yale University. We also have a number of our other senior officers here with us today.
They're seated in the front rows. In the interest of time, I will not introduce them individually, but could you all please stand? Thank you. I'd like to introduce Cathy Engelbert and Jeff Potts of Deloitte & Touche. Could you please stand? Ms. Engelbert is the Chief Executive Officer of Deloitte & Touche LLP and the Advisory Partner on the P&G account. Mr. Potts is the partner responsible for all services provided to P&G, and he directly supervised the audit of the company's fiscal 2016 financial statements. Ms. Engelbert and Mr. Potts are present in the event there are questions that are more appropriately answered by auditors. As Chair, I appointed Peter Descovich of Broadridge Financial Solutions as Inspector of this election for this meeting. He will supervise the voting. The next item on the agenda is the report on the business.
Fiscal 2016 was a year of progress in our journey to return P&G's results to a balance of top-line growth, bottom-line growth, and cash generation. We increased investments in innovation, advertising, and sales coverage to enhance our long-term prospects for faster, sustainable sales growth. We stabilized top-line growth rates in several key markets. We delivered another year of strong productivity improvement and cost savings. We made significant steps in our portfolio transformation, completing the Duracell transaction in February, negotiating and preparing for the sale of 41 beauty brands to Coty Inc., which is now completed, as well as streamlining the product lineups in our ongoing businesses. For this fiscal year, organic sales were up 1%. Core earnings per share were down 2% due to FX. On a currency-neutral basis, core EPS was up 7%. In adjusted free cash flow, productivity was above expectations at 115%.
We continue to build on our strong track record of returning cash to you, our shareholders. We paid $7.4 billion in dividends, increasing our dividend for the 60th consecutive year. We reduced shares outstanding by more than $8 billion through a combination of share repurchases and shares that were exchanged in the Duracell transaction. In total, P&G delivered nearly $16 billion of value for shareowners. We made progress in a challenging environment, but we know we need to do better. We must accelerate top-line growth, reaching and sustaining organic sales growth at or slightly above the underlying growth rate. Productivity improvement and cost savings are a necessity, providing fuel for top-line growth and margin improvement. We must also strengthen our product portfolio and our organization and our culture to win more consistently. These four focus areas are mutually reinforcing. They enable and build upon each other.
They each contribute to a stronger top line, bottom line, and cash flow. We're making progress in accelerating organic sales growth. Organic sales growth for the company was essentially flat in the first half of the year, but was up 1.5% in the second half, moving in the right direction, but there's more work to be done. Top-line growth starts and ends with consumer and shopper delight. Winning at the zero, first, and second moments of truth, when consumers become aware of our categories and brands, when they purchase them in store or online and use them in their home. Winning these moments requires insights that lead to superior performing product innovations, effective advertising, and strong retail programs. The outcome of these, when delivered with excellent execution, is growing the number of users and usage of our brands and categories in which we compete.
We're investing in innovation that delights consumers and builds categories. Superior, better performing, consumer-preferred brands, products and packages offered at a good value that result in a delightful consumer experience, which drives trial, repeat purchase, and loyalty. I can't overstate the importance of market growth and the priority we're making on this in our plans. P&G continues to be the innovation leader in our categories. In this year's IRI New Product Pacesetters report, P&G had four of the top 10 innovations and eight of the top 25. I'll highlight recent innovations in two of our 10 categories to give you an idea of the types of things we're working on in each. First, in fem care. Innovations such as Always Radiant and Always Discreet have been the key drivers to improved top-line growth. Radiant is our best performing and most highly rated feminine pad.
It absorbs 10 times its weight with unique proprietary absorbent material and provides up to 100% leak-free protection, driving nearly a point of market share growth for Always in the U.S. last year. Always Discreet, our new adult incontinence product, has launched in eight markets and is driving strong category growth post-launch. Always Discreet technology provides protection while offering incredible discretion. Our pads absorb two times more than needed with a leak-free guarantee. Importantly, market growth in the U.S. is up nearly 50%, the growth rate, 50% more since we launched, and it's nearly doubled in several markets in Europe. Again, innovation that builds market growth creates value for our retail partners while delighting consumers. We continue to be the innovation lead in fabric care.
We're growing our fabric care business with consumer-preferred brands and product offerings, like our premium priced and premium performance unit dose detergents, our market-leading and market-expanding scent bead fabric enhancers, and our entry into the naturals market with Tide purclean. Our unit dose detergents now generate over a billion and a half dollars in annual sales behind the three-in-one technology of a combined detergent, stain remover, and brightener. In the U.S., unit dose products account for 15% of category sales, with P&G holding a 78% of share of this form. Premium products like pods are driving market growth. Excuse me. The same is true for fabric enhancers. Spurred by the rapid growth of scent beads, the U.S. fabric enhancer category is growing up seven points on a value basis last year with the scent bead form, where P&G holds a 72% share, growing in the mid-20s.
Now, Tide purclean provides the cleaning power of Tide with 65% bio-based ingredients, and it's produced with 100% renewable wind power electricity in a facility that operates with zero manufacturing waste to landfill. Tide purclean is already a 4.5 share of the natural segment after just a couple of months in market. And people want performance and sustainability with no trade-offs. This is a great example of how we can improve the lives of the world's consumers and the world in which we live. In this case, we have technology that allows us to deliver a great cleaning performance for consumers, and it's better for the environment. Now moving to our marketing campaigns. We're investing broadly to increase the media reach, consistency, and effectiveness of our campaigns.
In the fourth quarter of last fiscal year, we made the decision to increase our media investment versus the prior year by over $200 million. We plan to continue that in fiscal 2017, consistently delivering four quarters of strong brand support. We're also improving the quality of our advertising to communicate the superior performance of our products and make our brands more relevant to consumers. Now, I'd like to share with you a few examples. First from Pantene and then from Always.
I am. A warrior. I used to blame the weather for my frizz. Turns out my curls needed to be stronger to fight back. Pantene's Pro-V formula makes my curls so strong they can dry practically frizz-free. Because strong is beautiful. Get even stronger results with Pantene Expert, our most intensely concentrated Pro-V formula.
I don't know why they make these berets so complicated for guys.
My dad's giving me a Dad Do.
A Dad Do comes from the heart. It's probably not a whole lot of style. Who knows? I mean, maybe there's a post-career here. What you giggling about?
I love you, Dad.
When you look in the mirror, who do you see? That strong is beautiful.
A lot of boys have told me that I can't play rugby because I'm a girl.
Actually, I've had a lot of people come up to me saying, "Aren't you afraid of getting really massive?
You have to be girly. You have to like certain things He said that I should be a clerk who works in a store. What would you say to a girl who's thinking of quitting?
I'd say, "Don't you dare.
I think a girl can play anything that they want to play.
Girls can actually play rugby, and they can also be the team captain of the team. You are worth it, and you deserve to play whatever sport you want to play. Don't let anyone tell you you can't do it.
That last advertisement, Keep Playing Like a Girl, results are very strong. More than 100 million views, the highest reaching Always Like a Girl video to date. This campaign has delivered 1.5 billion impressions and was named the number one ad campaign of the Rio 2016 Olympic Games by Campaign Magazine. Pantene Dad Do and Always Like a Girl are examples of how our brands can build the business and use their voice in advertising to make a positive difference on relevant social topics. For example, since we started our first Always Like a Girl video in 2014, attitudes are changing. 76% of women and girls now view the phrase "like a girl" as positive expression, versus only 19% before. The brand is growing market share, more users, household penetration, sales, and profit.
We're investing also in sampling with a special focus at point of market entry. Last fiscal year, we distributed about 17 million samples in new washing machines. In fiscal 2016, we'll distribute 30 million. Nearly 80% of young men in the U.S. receive a ProGlide FlexBall razor. That's over two million samples. In baby care, 70% of new moms in the U.S. will receive samples of our best products through our prenatal and our hospital programs. In North America, we increased sampling on Cascade Platinum by over 20% last year. In addition to winning, superior products, strong communication, we must win at the point of purchase. We're strengthening our go-to-market execution. Execution is what our consumers and shoppers experience, whether they're in store or they're online.
Our brands need to have the right selection of products in the right sizes at the right value, in the right quantity, and at the right points of sale to win with consumers and shoppers in store and online every day, and more recently, every hour of every day. We're adjusting our organization model so that we're best set up to win in major markets and versus our key competitors. Throughout the last fiscal year, we saw sequential positive progress in our biggest markets, here in the U.S. and also in China. Our second focus area is productivity and cost. We continue to consistently improve cost and cash productivity with significant upside still ahead. We've accelerated and exceeded each of our productivity objectives and now have raised them. For example, our original five-year cost of goods target was $6 billion.
We delivered $7.2, more than $1 billion above our initial target. Each year, we've delivered a cost of savings at or above target. We believe now we can deliver up to an additional $10 billion in productivity improvements over the next five years. The majority of these savings will come again from cost of goods sold, an area where we have consistently met or exceeded our productivity objectives. We also have savings opportunities that will come from many areas. Non-consumer facing marketing spending, as we improve the effectiveness of our promotional spending, and as we increase our organization efficiency, agility, and speed of decision making that will come as we operationalize the new focused 10-category company. We see clear savings in all of these areas. We're targeting up to $10 billion of additional savings over the next five years.
We do expect to invest a significant amount of these savings in R&D, in product and package improvements, in sales coverage, and in brand awareness and trial-building programs to deliver balanced top and bottom-line growth. Our third focus area is our portfolio. We're completing the transformation of our portfolio to make P&G a far simpler, faster-growing, and even more profitable company. P&G's portfolio had grown over time and was getting very complex. With the Coty transaction complete, most of our significant work on portfolio is finished. This was a very complex transaction that was handled very well by both the P&G people that moved to Coty and the P&G people that led the transition.
For perspective, since we began our portfolio work two years ago, we have exited over 100 brands and the complexity they created, including 41 with the Coty deal, keeping 86% of our sales and 94% of our profits. Hopefully, this illustrates the challenges of the portfolio work that we just completed, but more importantly, illustrates the opportunity ahead for the new P&G to deliver stronger results. Our portfolio is now organized around 10 category-based business units and about 65 brands. These are categories where P&G has a leading market position and where product technologies deliver performance differences that matter to consumers. We're focusing on categories where product performance drives product purchase decisions, where there are clear consumer jobs to be done with their objective measures of performance. These are products in financially attractive categories where consumers purchase daily and use daily.
Our choices, re-accelerating top line growth, continued productivity improvement, and portfolio transformation are enabled by a winning organization and a strong culture. We're changing our talent development and assignment planning to drive more mastery and depth. The objective is simple: improve business results by getting and keeping the right people in the right places to develop and apply deep category mastery. Consistent with this, we're dedicating sales resources to categories or sectors. In our larger markets, sales resources have greater accountability back to the categories they serve, which is also a change. An example of where we've dedicated and added resources to improve category mastery is our North American personal healthcare sales force. Two years ago, the average tenure of salespeople within the category was less than 12 months. Today, over 90% of the consumer healthcare sales force are covered by dedicated resources.
The average experience level is now more than five years of healthcare sales experience inside or outside P&G. We're aligning incentives at a lower and more specific level of granularity to better match these responsibilities and increase accountability. P&G is very fortunate to consistently source and develop strong talent, and we intend to maintain our develop within approach. It is one of our greatest strengths and will continue to be, but there are times when the best talent for a role may not be inside our organization. Going forward, we will look at selectively outside hiring when we need it to field the best team possible to win. Over the last two years, we've added 115 people to U.S. retail sales force through external hiring, and more than half of them had prior sales experience.
Over the last two years, we've increased category dedication of the U.S. sales force by 20%, with more than 90% of sales covered by category dedicated resources. Bottom line, we're committed to getting, keeping, and growing the right people in the right place to deliver better business results. Now, each area of the transformation, top line acceleration, productivity, portfolio, and strengthening our organization and culture requires change. We're making good progress in each of these areas, but we know our success will ultimately be graded on the sales, profit, cash, and value creation results we deliver, not on the activities that get us there. We are committed to do everything we can and to change what must be changed to deliver these results. Last year, we faced significant foreign exchange headwinds and slowing market growth, as well as economic and political disruptions in many large markets.
The year ahead is no less challenging. The retail landscape is changing rapidly. We're in recovery mode in China, our second largest market, and the improvements we're making will take some time to fully take hold. There's still a lot of volatility, political, economic, and in foreign exchange, but we're determined to win. Our goal is balanced growth and value creation. We want to make meaningful progress in fiscal 2017 toward our goal of returning to our long-term growth target. There's still work to do. It will take some time for the benefits of this work and the investments we're making to be fully visible in our results. Just about a year ago, I had the honor to be named CEO of this great company, and I'm more convinced than ever that P&G people will lead this company back to winning and delivering balanced growth and value creation.
In the last year, I've traveled to over 20 countries, and some of them multiple times. Everywhere I've been, I've experienced the quality and capability of an empowered, diverse team who are all in to win. P&G people are dedicated. They want to give their best every day. P&G people are truly our most valuable asset, and all of us are committed to do everything we can to get P&G back to winning with consumers, delivering consistent, reliable, balanced, and sustainable growth and value creation for you, our shareowners. Thank you. The next item of business is the election of directors. All directors elected this meeting will hold office for a one-year term until the 2017 annual meeting of shareholders, or until their successors are elected. In order to be elected, a director must receive more for votes than against, and I now declare the polls are open.
Will those voting at this meeting raise your hand and an usher will give you a ballot. If you've already voted your proxy, there's no need to vote now unless you want to change your vote. I'll ask Debbie Majoras to place in nomination the 10 nominees.
Thank you, David. Following notification of Dr. Desmond-Hellmann's decision not to stand for reelection, the Board of Directors reduced the size of the Board to 10 members. Accordingly, the Board of Directors, acting upon the recommendation of the Governance & Public Responsibility Committee, nominates the following 10 individuals for election as directors to hold office until the annual meeting in 2017 and until their successors are elected. Francis Blake, Angela Braly, Kenneth Chenault, Scott Cook, Terry J. Lundgren, W. James McNerney, Jr., David Taylor, Margaret Whitman, Patricia Woertz, Ernesto Zedillo. David.
All of the 10 nominees are current members of the Board of Directors. I will now take questions and comments on the nominations. Hearing none.
Good morning. My name is Carl Beckman. I am a resident of Cincinnati, Ohio. I'm a shareholder of common stock. My concern is about the qualifications and suitability of Margaret Whitman to serve on the Board. She's openly endorsed a presidential candidate. If you recall, one of the co-founders of Mozilla Firefox software, Brendan Eich, lost his job after it was disclosed that he had donated $1,000 to an anti-gay marriage proposition years ago. More recently, there have been calls to boycott Home Depot because one of the co-founders, billionaire Bernard Marcus, is supporting Mr. Donald Trump for president. I'm afraid that Ms. Whitman has exposed the corporation. P&G wouldn't allow a call taker in the customer service department to tell customers to vote for a particular candidate. It is my opinion that the candidate that Ms. Whitman is supporting is not a business-friendly candidate.
Ms. Whitman also works for Hewlett-Packard, which was once a fine company, but seems to be having some trouble now. Is she the best candidate?
Yeah. Meg Whitman, we think, is an outstanding candidate for the board, and the board has a variety of people with a broad background, which we shared in the proxy. For shareholders, if you would like to change your vote or vote differently, you are certainly entitled to, but the board has decided that we think Meg is extremely well-qualified and has been a consistently strong contributor to our board for many years. Thank you for your statement. If there is no further discussion, the nominations are closed. We will now proceed with the board proposals. The first proposal is to ratify the appointment of Deloitte & Touche as the independent registered public accounting firm. The proposal appears on page 59 of the proxy statement.
Although the board of directors is not required to submit this matter to the shareholders, we believe it is important that you have a say in the appointment of the independent public accounting firm. The board of directors recommends a vote for this resolution. Is there any discussion on this motion?
Shareholder.
Yes, please.
[inaudible]
Mr. Chairman, this is Mike Brodigan.
Mike.
Mr. Brodigan is a shareholder.
Good morning, Mike.
Good morning. Deloitte has been the auditor for P&G for a long time.
At some point, it no longer is an independent audit, but a joint venture. I think we're at that point, and I'd like to ask the Audit Committee and the Board why they haven't selected a new, truly independent auditor.
Thank you very much. First, we benefit tremendously from the experience that Deloitte & Touche has of our firm. Just one point which you may not realize is we do change the lead auditor on our lead partner on the account every five years to make sure that they have fresh eyes. The benefit to the company, we assess, is very significant to have someone that really understands our business. Thank you.
Well, I'm aware that the lead auditor changes, I don't think that's enough. I think we need a new team.
Okay. Thank you very much for your opinion. Any other discussion on this one? Very good. Thank you. We have the Board proposal for an advisory vote on executive compensation, otherwise known as Say on Pay. The proposal appears on page 60 of the proxy statement. The Board of Directors recommends a vote for this resolution. Is there any discussion on this motion? If there's no discussion on this concludes the discussion on the Board proposals. We'll move to the shareholder proposals. We have two shareholder proposals this year. The first one was submitted by the Green Century Equity Fund, and it requests that the company provide a report on the lobbying policies of a third-party organization, of all third-party organizations, of which P&G is a member of or otherwise financially supports. Is there a representative here today to present this proposal? Please.
Mr. Chairman, this is Marissa LaFave. Ms. LaFave speaks on behalf of the proposal.
Good morning, Marissa. If you prefer, you can save time and introduce the proposal by simply referring to the text as printed on page 61 of the proxy statement, I'll turn it to you.
Great. Thank you. My name is Marissa LaFave. As context, investors are becoming increasingly concerned about company lobbying at the federal, state, and local levels, including indirect lobbying through trade associations. In 2015, P&G has spent approximately $4.5 million on federal lobbying and paid over $8.2 million in dues to U.S. trade and industry associations, including some which are known to oppose important environmental and public health regulations. Green Century believes that the misalignment between P&G's publicly declared corporate values and its funding of external public policy advocacy may be an inappropriate use of shareholder dollars. One such misalignment is around the issue of climate change. In its 2015 sustainability report, P&G states that it is concerned about the negative consequences of climate change, and that prudent and cost-effective action by governments, industry, and consumers is necessary.
We commend P&G for striving to be part of the climate change solution through its commitments to reduce greenhouse gas emissions, increase the use of renewable energy, and reduce waste. However, we are concerned that in contrast to these actions, P&G's assets are being used in ways that inhibit progress toward climate change solutions. For example, P&G is a member of the U.S. Chamber of Commerce, which spent almost $85 million on lobbying last year and has launched several attacks on environmental safeguards. In 2012, the Chamber sued the Environmental Protection Agency over its findings that global warming endangers human health. It is also a vigorous opponent of the Clean Power Plan, which could be critical regulation in reducing U.S. greenhouse gas emissions. Another misalignment between P&G's values and its external advocacy funding is around product safety.
There is increasing scientific, regulatory, and public concern over the potential health effects of consumer exposure to various chemicals in personal care products. P&G has declared its public commitment to product safety, which it describes as, "At the heart of everything we do." Yet P&G remains a member of the American Chemistry Council, which spent over $10 million on lobbying last year and has worked to obstruct key public health and climate change regulation like the Toxic Substances Control Act and the Clean Power Plan. Investors as well as companies have recognized the reputational and business risks that they may face by funding efforts that oppose their values.
Last year, a group of 60 investors representing more than $320 billion in assets under management called out corporate members of the Chamber, including P&G, urging them to address any misalignment between their positions and actions on climate change and their funding of the Chamber's actions. Companies such as Apple and PG&E have cut ties with controversial associations like the Chamber to avoid reputational risk. Even P&G recognized the risks that funding such organizations can pose, and in 2012, withdrew from the American Legislative Exchange Council, or ALEC, which aggressively lobbies against renewable energy regulation at the state level and is often associated with the Chamber. Green Century believes that external public policy advocacy funded by P&G should be carefully scrutinized to assess its impact on the brand and its reputation.
The shareholder proposal requests that P&G review and assess the organizations that it is a member of or that it otherwise supports financially for their respective lobbying policies. We believe that payments to organizations that pursue agendas contrary to P&G's values may pose risks to the company and its investors. Greater transparency regarding the use of corporate funds to influence legislation and regulation, both directly and indirectly, would reveal whether company assets are being used contrary to the company's stated corporate values and its long-term interests. We therefore urge you to vote for this proposal. Thank you.
Thank you. Is there any further discussion on this proposal?
Mr. Chairman, this is Carl Beckman. Mr. Beckman is a shareholder.
Thank you, Mr. Chairman. I have a comment regarding item four, proposal for report on lobbying policies of third-party organizations. To my fellow shareholders, although I take all shareholders' proposals seriously, I suggest that you vote against this proposal. The title of the proposal sounds catchy, and it sounds like something that we need. After review of the proposal, it appears that it is not within the best interest of the corporation. The proponent commends P&G for withdrawing from the American Legislative Exchange Council, ALEC. I never did understand that decision. ALEC lobbies on behalf of corporations. Corporations are under attack by the government.
They are told what type of health insurance they must provide, what wages they must pay, how much to pay in corporate taxes, that they must take antibiotics out of soap, how they can sell their products, and a myriad of other laws pertaining to property and so forth. The proponent chides P&G for being a member of the US Chamber of Commerce. The Chamber of Commerce opened the debate by suing the EPA over the global warming issue. The proponent chides P&G for being a member of the American Chemistry Council, ACC. That organization is a bona fide organization consisting of experts in the chemical field. P&G has wholeheartedly embraced the idea of sustainability. I'm glad that the proponent has put forth this proposal. I learned a lot by reading the response from the board of directors. Please vote against this proposal. Thank you.
Thank you. Is there any further discussion on this proposal? If not, as further detailed on page 62 of the proxy statement, P&G has memberships in various types of organizations, which we routinely evaluate to advance the company's positions on a broad variety of issues. The company's public and legislative priorities are reviewed regularly to ensure they're aligned with the company's business objectives. P&G is committed to being transparent about our political involvement globally and publicly discloses its participation in our statement of political involvement, which can be found at the website listed on page 62 of your proxy. The company believes its current level of disclosure and oversight is sufficient to address the concerns outlined in this proposal, and that the additional detailed reporting requirements would not advance shareholder interest but would impose an unnecessary administrative burden. Therefore, the board of directors recommends a vote against this proposal.
The second proposal was submitted by the NorthStar Asset Management, Inc. Funded Pension Plan and requests that the company provide a report on the potential risk and cost to the company caused by any enacted or proposed state policies supporting discrimination against LGBT people. Is there a representative today to present this proposal?
Mr. Chairman, this is Mari Schwartzer. Ms. Schwartzer speaks on behalf of the proposal.
Good morning. If you prefer, you also can save time by simply referring to the text that's printed on page 63 of the proxy. Please.
Good morning. Thank you. My name is Mari Schwartzer of NorthStar Asset Management, Inc., a socially responsible investment firm based in Boston and the beneficial owner of over $3.8 million of The Procter & Gamble Company common stock. In recent months, several religious freedom bills have been introduced or passed in parts of the U.S. which actively discriminate against LGBT employees of our company, putting those employees, their partners, and children at risk of violence and discrimination. In many states, including Ohio, there are no statewide protections for LGBT people outside of state employment. We believe that there is a real risk to the company if we fail to consider whether our cherished LGBT employees will survive statewide discrimination in housing, public accommodations, services, and the associated public harassment and humiliation. Our company has a long, proud history of supporting LGBT rights, including taking public stances on discriminatory legislation.
In 2004, P&G stood up against the discriminatory Cincinnati city ordinance Article 12, which prohibited our company from protecting LGBT employees from discrimination. In 2014, our company publicly supported equal marriage rights. In 2015, P&G signed onto the amicus brief that urged the Supreme Court to strike down state bans on same-sex marriage. Now, in 2016, equal marriage is a reality, but our company's work as an influential ally of the LGBT community and our LGBT employees is not over. State-sponsored legislation, like North Carolina's House Bill 2, affects people's everyday lives, and it poses a genuine threat should these bills spread further across the nation. Despite all of this, as far as we know, our company has not taken a public stance on these state-sponsored discriminatory laws.
While our company's internal policies protecting LGBT employees from discrimination are robust, we fear that discriminatory legislation will harm employees' abilities to bring their best selves to work. How would your work performance suffer if you feared for the safety of your children? What if announcing your marriage meant that you could be kicked out of your housing? How can you focus on your work if you have been denied access to needed healthcare services or even the simple access to use a public restroom? How will we, as a company, handle customers' refusal to purchase P&G products because a store employee has a perceived sexual orientation or gender identity? We know that P&G understands the importance of employee morale and employee retention. We need a plan to protect employees and remedy potential harassment before our company puts itself, its employees, and its shareholder value at risk.
We urge shareholders to vote for proxy item number five. Thank you.
Thank you.
Is there any further discussion on this proposal? Yes, please.
Mr. Chairman, this is Justin Danhof.
Good morning.
I am Justin Danhof of the National Center for Public Policy Research, I rise to oppose proposal five. Proposal five is an attempt to force the company to become political activists on sexuality and gender issues by joining an anti-religious, anti-Constitution movement that is sweeping through much of corporate America. NorthStar proposal objects to laws in Mississippi, North Carolina, and Tennessee that are very different from one another in subject and content, but alike in that each one has many strong supporters and many strong detractors. What does Procter & Gamble stand to gain by joining one side of a hot-button political issue that does not affect our core business at all? Tennessee's law covers the counseling profession. That's not Procter & Gamble's business. NorthStar's goal is political change. That's not Procter & Gamble's business either.
Rejecting NorthStar's proposal would allow the company to continue focusing on its operations and its stakeholders and leave politicized issues to voters, legislatures, policymakers, and the courts. NorthStar proposal also makes false claims. It claims that Tennessee's law is, quote, "a discriminatory religious freedom bill that could constrain our company's ability to defend the rights of its LGBT employees". In fact, the law merely allows psychological counselors to refer a patient to another professional if he believes that treating the patient would conflict with his sincerely held beliefs. Surely, pro-LGBT counselors can hold sincerely held beliefs just as well as an ardent Christian or Muslim can. This law puts no constraints on Procter & Gamble's ability to protect its employees. Mississippi Governor Phil Bryant says Mississippi's law simply provides religious accommodations granted by many other states and federal law. The law currently is on hold pending appeal.
Procter & Gamble will have no determine on the outcome of this case. NorthStar's proposal also suggests that P&G should reconsider doing business in the state of North Carolina because of that state's HB2 law. This would certainly harm the company's bottom line and help no one. NorthStar's proposal seeks to enlist Procter & Gamble into political activism. A corporation that yields to these demands to assist in a political ploy, I'll finish up really quickly
Okay
makes it a target of future campaigns, potentially damaging your brand as well as your reputation and your ability to advance policies in the future. I urge all investors to reject this proposal. Thank you.
Is there any further discussion on this proposal? As further detailed on page 64 of the proxy statement, P&G's commitment to diversity inclusion has been clearly demonstrated by both effective action and transparency about our position and actions taken in support of our LGBT employees and their families. While the company fully supports diversity and non-discrimination, we believe the report would not be a productive use of company resources. The request is framed excuse me, too broadly, so that it would be virtually impossible for the company to fulfill it. Therefore, the Board of Directors recommends a vote against this proposal. This completes the review of the board and shareholder proposals. When you've completed your ballot, please hold it up so an usher can collect it. Once the ballots have been collected, I will declare the polls closed.
Results of the voting will be announced later in the meeting. Before we turn to questions or comments on other matters related to The Procter & Gamble Company's business, I'd like to announce that the board of directors has declared P&G's quarterly dividend. The dividend of $0.6695 per share will be payable on or after November 15th, 2016, to common stock shareholders of record at the close of business on October 21st, 2016, and to preferred stock share owners of record at the start of business on October 21st, 2016. P&G has been paying a dividend for 126 consecutive years, ever since the company was incorporated in 1890, and we've increased the dividend for 60 consecutive years. We're committed to returning cash to you, P&G share owners.
It's time for questions or comments on other matters related to The Procter & Gamble Company's business that have not already been discussed. Out of respect for everyone who would like to ask a question, according to the rules established for the conduct of this business, each share owner is allowed one turn at the microphone for a maximum of two minutes. Once this time limit has been used, the shareholder will not be allowed another turn at the microphone until all other interested shareholders have had their turns to address the meeting. There will be a limit of three speakers on any one subject, and in the interest of time, we will allot 30 minutes for this question and answer period.
Mr. Chairman, this is Julian Martinez. Mr. Martinez is a proxy who speaks on behalf of shareholder Jamie Garcia.
Good morning, Mr. Martinez.
Morning. Thank you, Mr. Chairman. My name is Julian Martinez, and I represent SER Jobs for Progress National. SER is a national nonprofit community-based organization serving more than 1.3 million people a year by assisting them with employment and educational needs. SER National and many others in the Hispanic community would like to thank Procter & Gamble for the support you have provided in the past and the programs you have sponsored in our community. We appreciate your efforts in diversifying your board, but your management team could use a little more diversity. It doesn't truly reflect your customer base. That doesn't make you bad. It just shows you have room for improvement. The American dream is alive and well. Hispanics born in this country are more highly educated and earn higher incomes than their immigrant parents.
The Latino population grew 57% between the year 2000 and 2014 and accounted for 43.4% of the job growth between 2009 and 2013. U.S. Latino purchasing power was $1.3 trillion in 2014, a gain of 155% and higher than that of African Americans, which is $1.1 trillion, Asian Americans, $770 billion. Hispanics are optimistic about national economic conditions. 34% say economic conditions are good or excellent and will be better in the coming year, twice as high as other groups in America. Hispanics are the youngest racial or ethnic group in the United States. One third, or 17.9 million of the Latino population is younger than 18. About a quarter, or 14.6 million are millennials.
This is a market you will have to capture if you are to succeed in the future. At one time, Procter & Gamble and SER National had a great working relationship, but that was changed when some folks retired. At this point, Mr. Chairman, I was going to ask you to point somebody to meet with, but, fortunately, I ran into Susan Fellner, and she's setting up a relationship between Brian Hodgett and I. If Brian would stand up so we could kind of meet later, I'd like to visit.
Brian is right over here.
Okay. Brian. Thank you. Thank you, Mr. Chairman.
Thank you very much. Well, certainly, we share your commitment to diversity, hopefully, you've seen over time our actions in this space. Thank you, Brian will be available after the meeting. Next, please.
Chairman. Speaking next is Terry Price. Ms. Price is a shareholder.
Good morning.
Good morning. I am a loyal P&G consumer, and I buy products such as Tide, Bounce, Febreze, Cascade, Oil of Olay, Dawn, Charmin, and many others. Being a frugal person, I take advantage of the coupons in my Sunday paper. What I don't understand is why some of the P&G coupons have such a short expiration date. Some are valid for only two weeks, and the rest, usually a month. I assume this is to get the consumers to buy the products right away and make money for the company, which I am happy about, but it just seems like a waste of money to print them so often. Also, my local Kroger store told me they take expired coupons. If you could address this concern, I would appreciate it very much. Thank you.
Thank you very much. Certainly, we want you to have a delightful experience with P&G brands, and I appreciate your loyal use of so many of our brands. I wish everybody in the room would take note of that.
My husband told me it was too many to mention.
No, actually. Actually, you've got an extra minute, so if you want to talk about more of our brands, we can use that time just fine. I do appreciate your loyalty, and we take your feedback seriously. We do make coupons available for varying time lengths, and it depends on what the marketing program is aimed to do. Certainly, we'll take your comments and concerns to heart, but thank you very much.
Thank you.
We appreciate your loyalty.
Mr. Chairman, speaking next is Mike Brodigan.
Mike.
Mr. Brodigan is a shareholder.
Good morning again.
Good morning again. I don't want to talk about diversity and inclusion. I want to talk about P&G's products and its advertising. I have here the May 2016 Consumer Reports, I'd like to focus on three things: razors, liquid detergent, and dishwasher packs. Gillette does pretty well in Consumer Reports in terms of razors, but Harry's Razors and Dollar Shave Club and some of these other subscription services do also very well, but they're often half the price or less. My question is, how did P&G allow this to happen? How did you lose market share to Dollar Shave Club and these other subscription services, a guy with a comedic background, didn't you see this coming? What are your people doing? With respect to Consumer Reports and Tide, I was very surprised to see that it was not number one.
It was beaten by Persil by a relatively wide margin. With respect to dishwasher tabs, it was first, but it was three times the price of the second brand, which was Sam's Club dishwasher tabs. At three times the price, what is P&G going to do to retain market share, along with having quality premium brands in a tightening economy? I think that we have to focus on this, our products and our advertising, not diversity and inclusion, which is just a false thing.
First, diversity and inclusion's a very important part of our company, I'll address your specific question. Each of our brands works to improve their consumer value, that's a combination of the performance of the product as well as the price that it has. Every category is trying to understand for the consumers it wants to serve how to do that better. In each of the instances you've given, generally, those products are superior. To some extent, depending on price, some consumers may find it a good value, some may not. What we're working to do on every single category is listen to the consumers, improve the product performance, then to have a price that causes the total proposition to have good value. We are not perfect.
We're working to address each and every opportunity by category for each of the brands in every country we do business. You're right, there are opportunities, and there will always be opportunities to get better. Rest assured, our commitment is to understand consumers' needs, to anticipate consumers' needs, and to do a good job reaching them when and where they're receptive to try our products, to learn about our products, and we'll work that on every single category. We work to try to earn your trust and everybody's trust in every one of the product categories we have. We certainly hear your input and appreciate you sharing your thoughts with us today. Thank you. Yes, please.
Mr. Chairman, this is Carl Beckman. Mr. Beckman is a shareholder.
Good morning again, Mr. Chairman.
Good morning.
I would like to say thank you for keeping the shareholders in mind as you contemplate the dividend and the future of the company. In July of 2015, P&G said in a press release that the brands that were to be sold to Coty would be sold for $12.5 billion. Recently, P&G sold the 41 brands to Coty for $11.4 billion. That is only 94% of the expected value of the transaction. Would you care to explain why The Procter & Gamble Company fell $1.1 billion short on the Coty deal, and how was this a good deal for the corporation and shareholders?
Yeah, this is actually a very good deal. Jon, our CFO, I ask you to provide a little perspective because the way the price is both announced and the way it turns out has to do with the way the contract was written and the way the deal was structured.
You're absolutely right. The price that those brands sold for was effectively $11.4 billion. For perspective, that's about $5 billion more than the value we thought we could create internally by maintaining those brands. This is a great outcome for share owners. As David said, the ultimate price depended on the price of Coty stock because that was part of the consideration of the transaction. That has some natural variability to it. It's a very good outcome for the company, for the people that work on those businesses, and for our share owners.
Thank you.
Do I have time for one more?
Let anybody else first
Sure
before we have repeats.
Mr. Chairman, this is William Balfour. Mr. Balfour is a shareholder.
Good morning.
Good morning. Again, my name is William Balfour. I'm from Bridgewater, Massachusetts. I'm looking for some information to just better understand the dialogue that takes place at the board meeting when it comes time to discuss the dividend and increasing the dividend.
The last dividend, when it was increased, there were many shareholders who were probably surprised at the amount of the last dividend increase. I actually was not. I was sort of expecting the low amount. I do appreciate the continual dividend. It is very important to me, and it is greatly appreciated. I'm just really trying to understand some of the dialogue in the decision-making process that goes into the dividend announcement and the decision to increase and the amount that it's increased.
Sure. Thank you. Just a couple comments. One, P&G is very committed to returning cash to shareowners, and hopefully the things I've shared already reinforce that we've done that, whether it's the years of consecutive paying the dividend or the 60 years of increase. Over the last 4 years, there has been some decrease in the annual % of increase, it's also been a period of time where in the world we've experienced severe foreign exchange impacts to our company. I shared the results for last year. We saw a very big difference in our earnings per share on an all-in basis from including FX and constant currency.
We pay attention to the payout ratio we have, and we want to do the best job we can returning cash to shareholders while also investing back and making sure we grow the business for next year and many years to come. P&G's been around for 178 years for a reason. We understand consumers. We're devoted to providing products and services that delight them. We're also very committed to you, our shareowners, and the best way we think we can do that is to have a balance between returning cash to shareowners and investing in the future of the company. We take this very seriously.
The board of directors discusses every year the different considerations, and hopefully you feel at least encouraged by the fact that even in probably the four most difficult years for a U.S. company that does business in many countries, we still increase the dividend every single year. Thank you for your comments. Any other questions? Mr. Beckman.
This is Mr. Beckman.
I can introduce you
Good morning once again. Is the corporation still involved with the Clinton Foundation? If so, why? The reason that I bring this up is that there was an article written on July 12th, 2016, that said, "Wall Street analyst Charles Ortel, who conducted studies of the Clinton Foundation financial reports, alleged that Clinton had developed a methodology of exploiting epidemics and natural disasters to raise hundreds of millions in charitable obligations that in a relaxed regulatory environment could be directed to personal gain, funding Hillary's political campaigns and supporting Democratic Party causes." Some other questions that come to mind are, did P&G contribute to the Donald Trump Foundation? Why is P&G contributing to foundations at all? One of the P&G goals was to improve the lives of consumers in Nigeria and Pakistan.
Another goal was to commit helping 100 million girls and women build confidence. I realize times are tough in other parts of the world, but can P&G really afford to meet these goals when they cannot even make a profit off of the old iconic brands? They do things such as dropping out of the American Legislative Exchange Council, and they haven't had a new innovative product such as a Swiffer in years. It seems like the company is heading in the direction of the other fallen giants, such as Polaroid, Kodak, HP, Sony, Sears, and Yahoo. Please tell me that I'm wrong.
You're wrong.
Thank you.
Other questions? Yeah, just a couple of comments. One, P&G's committed to growth. P&G will choose to engage in a variety of activities to meet and reach consumers in ways we think appropriate. You saw some advertising earlier that I think did a good job of both reaching consumers, growing the business, as well as communicating an important social message. We do have a part of our company that does do a variety of items that we think help consumers. There's the Children's Safe Drinking Water Fund is an example of that. We participate in the Clinton Global Initiative, not as a political donation, but for perspective, we invest tens of million dollars to support our community impact programs. That helps build equity of P&G and builds equity of our brands.
We've done this for years and years during the periods we are growing and during the periods where there was difficult economic times. The CGI specifically helps us connect with non-government organizations and other partners that work together with us to reach the people most in need and to reach as many people as possible. This includes both the Children's Safe Drinking Water program. We've delivered over 10 billion liters of clean drinking water in more than 85 countries. We're proud of that. Our Pampers UNICEF program, which is donating life-saving vaccines to help protect 100 million mothers and their babies that can use Pampers, moms that can use a variety of P&G products, helping to eliminate neonatal tetanus in 19 countries.
We review all of our sponsorship commitments annually to ensure they continue to align with our business priorities and our purpose and values and principles. I believe they do. Thank you for your thoughts.
Thank you.
Are there any other questions? If not, we have the results coming up. Very good. We have the results of the voting, and I'm advised by the Inspector of Elections that each of the 10 nominees listed in the proxy statement have received more for votes than against and has been elected to one-year term expiring the annual meeting of 2017. Also, that the board proposal to ratify the appointment of the independent registered public accounting firm has been adopted with at least 98.9% votes cast favorably. That the board proposal for an advisory vote on executive compensation has been adopted with at least 95% votes cast in favor. That the shareholder proposal for a report on lobbying activities of third-party organizations that has been defeated with approximately 7.26% of votes being cast in favor.
That the shareholder proposal for a report on application of the company's non-discrimination policies in states with pro-discrimination laws has been defeated with approximately 6.54% of the votes being cast in favor. Certified totals and percentages will be available later from the secretary. Now, this completes today's business. I want to again express my appreciation for your confidence and support in our company. I wanna thank so many people who've been long-term owners of P&G stock. We take it very seriously, and we appreciate it. Now, may I have a motion to adjourn the meeting?
Motion to adjourn.
Thank you very much. This meeting is now adjourned.