Good morning, ladies and gentlemen, and welcome. I'm A.G. Lafley, Chairman of the Board, President and Chief Executive Officer of The Procter & Gamble Company. I want to welcome you all again to our annual meeting of shareholders. I'd also like to welcome all of our shareholders who are watching this meeting via the internet. The meeting is now called to order. There are plenty of seats down in front here. Just like church, the front pews don't get filled as fast. Notice of the meeting was sent to each shareholder of record, and a quorum is present in person or by proxy. Now I'd like to get started with introductions. Here with me on stage are Jon Moeller, our Chief Financial Officer, and Debbie Majoras, our Chief Legal Officer and Secretary.
I'd now like to introduce the other members of the board who are with us today, and I'll ask each of them to stand as I introduce them. 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, now Anthem. Ken Chenault, Chairman and Chief Executive Officer of The American Express Company. Sue Desmond-Hellmann, Chief Executive Officer of the Bill & Melinda Gates Foundation. Terry Lundgren, Chairman and Chief Executive Officer of Macy's, Inc. Jim McNerney, Chairman of the Board and former Chief Executive Officer of Boeing. Jim is also our Lead Director, Chair of the Compensation and Leadership Development Committee, and a member of the Proxy Committee. Maggie Wilderotter, Chairman of the Board and former Chief Executive Officer of Frontier Communications Corp.
As recently announced, Maggie has decided not to stand for re-election to our board. Maggie's been a very valuable member of the board for now over six years, and we're going to miss her very much, her insights and her wisdom. So please join me in thanking Maggie for her service to the company and in wishing her well. Thank you, Maggie. Pat Woertz, Chairman and former Chief Executive Officer of Archer-Daniels-Midland Company. Pat chairs our Audit Committee. Ernesto Zedillo, former President of Mexico and current Director of the Center for the Study of Globalization, and Professor of International Economics and Politics at Yale University. Ernesto is the Chair of our Governance and Public Responsibility Committee and a member of the Proxy Committee.
Seated in the front row with our board of directors is David Taylor, currently Group President of our Global Beauty, Grooming and Health Care businesses, and a member of our board of directors. And as I'm sure you know, President and Chief Executive of The Procter & Gamble Company as of November the first. We have a number of other senior executives here with us today, and I would just ask them to stand for a moment. They're seated in the front rows behind the directors. In the interest of time, I'm not going to introduce each of them individually. But I did want to recognize them. Thank you. I'd like to introduce Cathy Engelbert and Jeff Potts of Deloitte & Touche. Ms. Engelbert is the Chief Executive Officer of D&T LLP and the Advisory Partner on the P&G account.
Effective August 10, 2015, Mr. Potts rotated into the lead partner role and currently has responsibility for all services provided to P&G. Ms. Engelbert and Mr. Potts are present in the event there are questions that are more appropriately answered by our auditors. As Chair, I've appointed Peter Deskovich of Broadridge Financial Solutions as Inspector of Election for this meeting. He will supervise the voting. The next item on the agenda is the report on the business. We are transforming P&G. This year, our company will be 178 years old, and a company built to last does not endure for that long if its management is not willing to change anything and everything, except its purpose and core values to serve consumers and create value for shareowners. Fiscal 2015 was a challenging year, a tough year due to weakening developing market economics and the unprecedented negative impact of foreign exchange.
Because we are a dollar-denominated company headquartered in the U.S., and given the reality of the geographic footprint of our business with significant exposures in markets such as Brazil, Japan, and Russia, company worldwide sales and profits were negatively impacted by foreign exchange. Organic sales grew 1%. Organic sales for our 10 core continuing categories of business grew 2%, about a point below underlying market growth. Core earnings per share were down 2%, including a 13-point, $1.5 billion negative impact of foreign exchange. On a constant currency basis, core earnings per share were actually up 11%. Despite the sales and earnings pressures, we continued to generate strong adjusted free cash flow of $11.6 billion, 102% adjusted free cash flow productivity. We increased the dividend, the 59th year in a row P&G has increased its dividend.
We returned $11.9 billion to shareowners, $7.3 billion in dividends, and $4.6 billion in share repurchase. Over the past five years, we've returned $60 billion to shareowners, $12 billion a year on average. We've announced our intention to return up to $70 billion to shareowners over the next four years through a combination of dividend payments, share retirement, and share repurchase. We believe we have several more years of productivity savings, some of which will be smartly invested in sales and market share growth. We are leading the most comprehensive series of changes in the company's history. We're putting the strategies and capabilities in place to transform P&G into a faster-growing, more profitable, and far simpler company. We're recommitting ourselves to putting the consumer at the center of everything we do.
The purpose of any business is to create a consumer and to serve that consumer better than anyone else can. That's why we're investing in capabilities to understand consumer needs better than ever. That's why we're investing in creating and building brands that consumers prefer. That's why we're investing in innovative products that deliver better performance, quality, consumer experiences, and consumer value. That's why we're focused on improving execution, the only thing consumers ever see in the store and at home. We will have a more focused business portfolio. After decades of category extension and geographic expansion, we are narrowing our focus to 10 business categories. Ultimately, a more focused P&G will lead to becoming the best-performing company in the consumer products industry, winning with consumers and delivering the most consistent and reliable performance in our chosen business categories, countries, channels, and customers.
We chose 10 business categories where P&G understands consumers and has leading market positions, strong brands, well-differentiated products, and business models proven to grow and create value. These 10 categories have been growing faster, and their operating margins are higher than those of the total company. Their sales and profits are highly concentrated in the top handful of consumer markets around the world. Yet they still have significant growth opportunity in big developed countries such as the U.S., Germany, the U.K., and Japan, where household penetration rates can still be improved; and in developing markets like China, Brazil, India, Russia, Turkey, and Mexico, where P&G has been building capability and improving its position. We are becoming much more innovative and much more productive. We've always believed that product innovation is the lifeblood of our business.
We invent brands and products that create and transform categories, and that build consumer trial and create value in those categories for years, even for decades. Our brand and product innovations drive category market growth, which creates value for our retail customers and for our suppliers. We're rededicating ourselves to product innovation that wins from the top, offering the most trusted brands and the best performing products in the category, with the highest performance in quality and a modest price premium yielding superior consumer value and growth. In baby care, P&G now holds a 44% value share of the diapers category, with a 7-point lead versus Huggies in the U.S. P&G's strength in baby care has stimulated the entire U.S. baby care category, growing value over 3% the last 3, 6, and 12-month periods, and delivering profitable sales growth for both P&G and our retailers.
We plan to continue this momentum with our newest innovation, Pampers with extra absorbing channels that help distribute wetness evenly from front to back to keep babies drier, and for a noticeably better fit that doesn't sag like ordinary diapers. The new product started shipping in the U.S. late summer and will launch in over 60 countries in the next year. In fabric care, we're investing significantly in consumer preferred products, like unit dose laundry detergents such as Tide PODS. So far, in calendar 2015, we've launched unit dose products across several different brands and in several different countries around the world. Globally, our unit dose laundry retail sales are over $1.5 billion. The segment is growing 20% over the last year, and we have about a 70 share of it.
We know that we continue to have significant upside in the segment with trial levels in the U.S. still under 15%. We've also invested in fabric conditioners. We continue to grow Downy and Lenor in markets around the world, and we continue to innovate and broaden the scent beads line of products. In the U.S., beads have grown to over 15% of the category. Again, we have about a 70 share of this segment. In hair care, Head & Shoulders, our largest shampoo brand and the number one shampoo brand in the world, grew global organic sales for the twentieth year in a row and continued to build profit and cash productivity. We recently launched our Head & Shoulders Instant Collection in the U.S., with 75% of sales so far incremental to the brand.
In fiscal 2015, Pantene grew sales worldwide and delivered 4% sales growth and market share growth for the first time in several years in the U.S. In grooming, the largest male and female grooming brands, Gillette Fusion and Venus, have proven and will continue to be huge platforms for blade and razor innovation. The original Fusion shaving system is still P&G's fastest brand to reach $1 billion in sales, and we've continued growth with the big, obvious, and preferred FlexBall razor innovation that launched in the U.S. last year, and in parts of Europe and Asia at the beginning of this year. In fewer than 18 months, we've already put 25 million Fusion FlexBall razors into the hands of men around the world, and our global male blades and razors value share is about 70%. These are just a few examples. There are many more.
While innovation is our lifeblood, we know we cannot deliver consistent, reliable growth and value creation without consistent improvement and continuous improvement in productivity. We're implementing the biggest supply chain redesign in the company's history. We're moving to fewer categories, many fewer brands, fewer initiatives, fewer product lines, and fewer SKUs. We're consolidating to fewer plants, agencies, suppliers, and organizations. We're focusing on far fewer priorities and activities. This is all leading to lower costs, lower costs of goods sold, lower overheads, lower marketing, lower trade spending. In turn, this is driving more focus and more savings to reinvest in accelerating growth of leading brands, generating consumer trial of our new product innovations in the countries and customers with the highest potential for sales profit and cash growth. We have strong leadership for the future. On November the 1st, David Taylor will become P&G's next Chief Executive Officer.
David is an accomplished leader with 35 years of significant industry and company experience and a track record of proven results. David spent the first 11 years of his career in product supply, working in manufacturing plants and distribution centers, learning the technical and supply side of the business, and leading large organizations. He then moved into marketing and learned how to build brands, getting a classical P&G brand building education and experience. After that, he's led a number of business categories and assignments in Asia, in Europe, and in North America, working in haircare and family care. Most recently, he's led global businesses at the president level in family care, home care, healthcare, grooming, and beauty, giving him an opportunity to learn a variety of businesses around the world and a variety of business models. His breadth of experience and track record of success are strong ones.
David is hands-on with deep knowledge of consumers, customers, and categories. He's very focused, strategic, a man of high character and integrity, a proven strategist and operator who delivers results, a lifetime learner with an open mind, a competitor, a winner with high standards and a healthy impatience for better and ultimately the best performance and results the company can deliver. David has played a central role over the last months in working with P&G leadership, the board, and me on developing the strategies in the business portfolio to win with consumers and deliver balanced growth and value creation. As CEO, David will focus on leading P&G's transformation with excellence. As executive chairman, I look forward to supporting David and the leadership team, and you, our shareowners.
I will continue to chair the board of directors and provide advice and counsel to David and P&G leadership on company and business unit strategies, portfolio, and organization. The foundation is based, as always, on our purpose, values, and principles. The consumer is at the center of everything that we do. We will win consistently with about 65 leading brands organized into 10 categories of business in industry-based sectors. We will go to market in six regions through about 30 country clusters. We will create value through consumer preferred brands and products that win at the zero, first, and second moments of truth. We will play P&G's game to our core strengths, positioned to grow again through the power of P&G brands, P&G products, and P&G people. It won't all happen immediately or overnight, and some quarters will be better than others.
Year in and year out, this new P&G will grow sales, profit, and cash more consistently, more reliably, and more sustainably to create value more reliably for you, P&G shareowners. Thank you. The next item of business is the election of directors. All directors elected at this meeting will hold office for a one-year term until the 2016 annual meeting of shareholders and until their successors are elected. In order to be elected, a director must receive more for votes than against. I'll now declare the polls are open. Will any of you who wish to vote at this meeting please 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. We're not going to count your vote twice unless you want to change your vote.
I'll now ask Debbie Majoras to place in nomination the 12 nominees.
Thanks very much, A.G. Following notification of Ms. Wilderotter's decision not to stand for re-election, the board of directors reduced the size of the board to 12 members. Any votes cast for Ms. Wilderotter will be disregarded. Accordingly, the board of directors, acting upon the recommendation of the Governance and Public Responsibility Committee, nominates the following 12 individuals for election as directors to hold office until the annual meeting in 2016 and until their successors are elected: Francis Blake, Angela Braly, Kenneth Chenault, Scott Cook, Susan Desmond-Hellmann, A.G. Lafley, Terry J. Lundgren, W. James McNerney Jr., David Taylor, Margaret Whitman, Patricia Woertz, and Ernesto Zedillo.
All of these nominees are current members of P&G's board of directors. If you have any, we will now take questions and/or comments on the nominations. If there are none and there is no further discussion, the nominations are closed, and we will now proceed with board proposals. The first proposal is to ratify the appointment of Deloitte & Touche as the independent registered public accounting firm. This proposal appears on page 55 of the proxy statement. Although the board is not required to submit this matter to 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 comment or discussion on this motion? Seeing none. Next, we have the board proposal for an advisory vote on executive compensation. This is known as Say on Pay.
This proposal appears on page 55 of the proxy statement. Again, the board of directors recommends a vote for this resolution. Are there any questions or comments or discussion on this proposal? That concludes the discussion on the board proposals. Now we will move on to the shareholder proposal. We have one shareholder proposal this year submitted by James McRitchie and Myra Young, and it requests that the board of directors adopt and present for shareholder approval a proxy access by-law. Is there a representative here today to present this proposal?
No.
Debbie?
A.G., SEC rules require that any shareholder proposal to be submitted to a vote must be presented by the shareholder who submitted the proposal or his or her representative. Because the proponent has not appeared to present this proposal, I'm afraid that proposal number four will not be presented for a vote.
Okay. Thank you. 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 are closed. Everybody had a chance to hand their ballot in? Thank you. Results of the voting will be announced later in this meeting. Before we turn to questions or comments on other matters related to company business, I would like to announce that the board of directors has declared P&G's quarterly dividend. The dividend of $0.6629 per share will be payable on or after November the 16th to common stock shareholders of record at the close of business on October the 23rd, and to preferred stock shareholders of record at the start of business on October the 23rd.
As you know, P&G has been paying a dividend now for 125 consecutive years, ever since the company was incorporated in 1890. We have increased the dividend for 59 consecutive years. We are committed to returning cash to you, P&G share owners. It is now time for questions or comments on other matters related to the company's business that have not already been discussed. In the interest of time, we will allow no more than 30 minutes for this question and comment period. Please proceed to one of the microphones if you have a question. Yes.
Mr. Chairman, I have Jane Garcia, a shareholder.
Ms. Garcia.
[Foreign language], Mr. Chairman. [Foreign language] to all of you.
[Foreign language]
shareholders, board of directors. I'm Jane Garcia. I'm from the comeback city of Detroit.
All right.
sure we know that. I'm here also representing National SER, which you have always been a partner of. We look forward to another representation on the board because we are looking for that. National SER have been recognized by the White House for the jobs that it's providing and a great partnership with P&G. We want to also thank you for your service to the military and their families as they return, to provide jobs for them, because I think it's very important that we not forget them, because we have a lot of problems with the veterans returning and getting just readjusted into the service-
Yes
We want to thank you on that behalf. I know you are trying to clean up the chemical stuff. I passed all these people and told them, "Hey, we have to have an effort." I know you're going to continue to do that, and I will follow up with a letter. [Foreign language] Muchísimas gracias to all of you.
Thank you very much. This is a partnership that's worked for both of us. I think as everybody knows, we're very committed to diversity and inclusion. Yes.
Mr. Chairman, this is Helga Schwam. Ms. Schwam is a shareholder.
Schwam.
Like Charles, no relation.
I got it.
Otherwise, I wouldn't be here, probably.
Neither would I.
First of all, thank you very much, Mr. Lafley, for allowing us to speak. I have a couple of questions. The first one is, I read the proxy statement, and it seems like out of 64 pages, I believe, 32 relate to compensation of directors as well as senior officers. It seems very, very excessive to me as a shareholder.
We agree.
Can I continue, please?
Please. No, please, I'm agreeing as you go.
Okay. I'm just a little old shareholder, okay? I'm part of the owner of this company.
I don't seem to have any say in how much the compensation is. You will give us some dividend increase, a slight dividend increase. You're putting us into this little room. You are discouraging, more or less, or at least it seems to me, attendance to this meeting. When I first became a shareholder, we had meetings down at the Aronoff Center. We were treated very nicely. There were displays of company products. There were nice hostesses that gave us some coffee, some cookies, all these goodies for shareholders. We're not even allowed to bring a cup of coffee in this frigging room here. Pardon the expression. I noticed you have your little water there. We were not allowed to bring anything in. I'm thirsty, too.
We have another water.
That was number one question. Okay. I trust you will respond to them.
Yes.
Number two question, are you still going back and forth to Florida?
I live in Florida.
You live in Florida.
My family's in Florida.
Where?
My family is in Florida.
Good. I'm glad. Did you buy a house up here, or how are we keeping you?
It's all laid out in the proxy. I commute, and I live in a hotel room when I'm in Cincinnati, and when I am working on the business wherever I need to be. David and I are leaving after the board meeting today to go to China. We're in China. When we need to be in Europe, we're in Europe. When we need to be wherever we need to be-
Okay
we are there, also living in a hotel room.
Okay. Very good. Number three, I noticed there is something called expatriate relocation and tax equalization payments for you. In 2015, it was $2,902. In 2014, it was $4,042. What is that? If you're living in Florida-
Yeah
around here
You've stumped the stars here. I don't know. Mark, do you have any idea? It's a carryover from when I was in Asia. I spent five years in Asia, I guess in the mid-'90s. How does it work? Is there a simple explanation? Okay. We will get back to you with a simple explanation.
I noticed it was not in the 2013
I have no idea.
year. I would appreciate that.
Okay.
I don't know if anybody else is interested in. It's only a minuscule amount, it just questions. Okay.
I understand.
Thank you, sir.
All right.
Appreciate that.
Thank you.
Are you going to answer my questions? The first one-
I'm going to take a shot at a couple of them. There were more than three, by the way. Very clever. On the venue for the shareowners meeting and on the, how shall I say, tenor of the meeting. Last year, we had about 400 attendees. If you were there, we were in this cavernous convention center and could barely see each other. This venue actually seats 425 to 450, something like that. It is actually a better meeting venue, a better place to have a conversation. We are trying to match what makes for a good meeting and a good conversation with the venue. The other thing I would say is, we were in the company through the 1980s and through most of the 1990s. We didn't go to the Aronoff until, I believe, the end of the 1990s. We were here through 1997 in this venue.
The other thing I would say is, yes, we're running it more like a business meeting, and that's intentional. Okay? That's a choice. Some companies do run more of an entertainment type of event. We're running it more like a business meeting. We think the shareholder meeting ought to be a business discussion. Frankly, the third point is we're trying to run it efficiently. Efficiently in terms of time, efficiently in terms of Believe me, you don't want the management of your company spending two weeks to get ready for the shareholders meeting. You want them working on the business, okay? Those are choices. You definitely got me with the water. I don't know why. I will find out. Okay? Did I cover most of it? On the comp, look, we pay for performance. Okay? We benchmark our comp versus comparable companies.
We pay over the mid and long term. I think it's a reasonably balanced program. The 32 pages, believe me, we don't need 32 pages to explain that to you. Okay? That is required. Okay? Frankly, I think it makes it a little harder for you and a little bit confusing. We try to be as clear as possible. If you have any specific questions, we'll try to answer them, like the one that Mark and I will run down after the meeting. Okay? Thank you.
Mr. Chairman, I have Leland Wyckoff. Mr. Wyckoff is a shareholder.
Mr. Wyckoff, good morning.
Good morning. Good morning to our board of directors, our visitors, and esteemed shareholders. It's a pleasure to be here. It's my first shareholder meeting with Procter & Gamble. Let's explore executive pay a little bit more. You just indicated we pay for performance. Last year, we paid for non-performance. Some of our metrics were not met. We were told that they were pegged in the low to mid-range single digit, and in one case, we had negative two, and they still achieved part of a bonus. Good work if you can get it. Another concern, it's not covered in our material, is as you're buying back these shares, that's artificially raising our earnings per share through no actual management effort. Because as you take shares out, the earnings go up. That appears to me that that's how you're increasing the dividend.
It's not really a larger pool, you're just distributing it over fewer shares, it's masking a long-term problem. If you could address that. You talk about simplifying the company, simplifying processes, but you're not simplifying pay. We're paying you folks for exceptional management skills of a complex business, which you are busily, very busily dismantling to a simpler business. If you can tell me what you see as the long-term reduction in the cost that we have in executive compensation, I would appreciate it.
Okay. There are several questions there, I will.
I have a couple more.
Okay.
Uh-huh.
Yeah.
That was kind of an overall one question. I'm also concerned about the.
We can take one more this turn. To be fair to everybody else, we're going to try to give everybody a turn at the mic, okay? You may add one more, though.
We'll make it a good one.
Yes. Hit me with your best shot.
As we pare our product line down from 165 to about 100, there's a risk there. The risk is that we no longer have lower performing brands to move up the scale. We also have a risk that's not been identified. I think you now refer to your laundry pods as single unit dose.
Last year, when you began this process, I was concerned because Consumer Reports had already indicated there were problems that were going to be regulatory because of children wanting to eat them. Given that, while you're putting so much effort in a core brand, at the same time, you're reducing your sub-brands in laundry powder, which then results in fewer sales. I think that's tied back into our poor performance on every measure.
Sure.
If you would address that.
try to capture several of these. First of all, the facts are that our U.S. laundry share is up, our sales are up, and our profits are growing. Actually, when I joined the company in the mid-1970s, we were selling 14 laundry brands. We had about a 40% share of the U.S. market. Today, we sell five, and we have nearly a 60% share of the market. Consumers do not need 20 laundry brands to choose from, and they have voted with their choices at the first moment of truth when they purchase in store, and they have voted on the second moment of truth by coming back to buy Tide. Tide is above a 40% share now, at the highest level it's ever been, growing household penetration.
I know it seems a little counterintuitive to some, but believe it or not, our businesses have actually grown with fewer brands. Our business is stronger, and we have a higher share in markets where we sell only Pampers, like Western Europe, than in markets where we sell Pampers and Luvs, like the U.S. Second point on that one is, recall the slide in the business review, we actually grew one point faster on the top line, 2% organically, on the continuing 10 categories and 65 brands than we did on the total company. By the way, the margin is a full percent, 100 basis points higher on the continuing businesses. It seems like a pretty good trade to us. Higher growth, more profitable, flowing more cash, and simpler to operate.
On the question about the overall performance in comp, yes, all-in profit on an earnings per share basis was down two points. We had a 13-point negative effect, $1.5 billion, from foreign exchange. Devaluation of the Russian currency, devaluation of the Argentinian and Brazilian currency, devaluation of the Japanese yen. I think our operating team did a pretty doggone good job, and I think our investors actually look through the all-in results and look at what we accomplished on a currency neutral basis. I guess the third point I would make is, we went through a number of the productivity improvements that this team has made over the last three or four years, and we talked about some that are coming. That's an incredibly important part of the program that we're on.
If we can continue to be more productive every year and invest that back in the business and/or into a steady, reliable return to shareowners, that's sort of the sweet spot. Shareowners benefit from the dividend and the share repurchases and the share retirements. The company benefits by growing a bit faster from the reinvestment in the brands and products. I guess the last thing I would say is, look on the share buyback thing, it's an allocation of capital choice that we and the board discuss on an ongoing basis. It is cash, and we try to make the best investment we can. After we've paid the dividend, which is the top priority, we try to make the best investment that we can with the balance of cash.
Frankly, we've had enough cash to reinvest in the business and plant capital and equipment, brand support, R&D, all of that. We didn't think it was the right time for a large acquisition or even a medium-sized acquisition, so we returned the money to shareowners. Again, that's a choice. It's a capital allocation choice. I think many of our shareholders appreciate it. Others may not. It's just a difference of opinion. I think I got four out of the seven, but I feel like I need to move on because we have a lot of other people that want to ask questions.
Thank you very much.
Thank you. Yeah. I think, since we've had two multiple choice questions to start, if you would, to allow everybody a chance, if you could just ask your most important question, and then if you want to ask another question, just get back in line and we'll try to get to you in the 30-minute period. Okay? Thank you.
Mr. Chairman, next up is Samuel Foreman. Mr. Foreman is a shareholder.
Mr. Foreman, good morning.
Good morning. I consider my most important tagline for here to be a member of the P&G Alumni Network of former employees.
Terrific.
As we look forward to a strategy where divestiture is an important part, if we look in recent years to the brands and companies already divested-
we see that generally, those divested brands have been doing quite well. We look to Smucker's in the last eight years by picking up various and sundry Procter & Gamble brands. Their stock value has, I think, quadrupled from the mid-'20s until now. What lessons do you and fellow board members take from the original creation and acquisition of those companies and brands now divested? Looking more forward, are there learnings you take as to why those divested companies have flourished under other management compared to its P&G management?
Okay. Three points. First, it is truly a mixed result. We look at every brand we divest or otherwise dispose of and how it fares, and you have mentioned two that have been successful. Frankly, the majority have been less successful after they're divested. That leads to the second point. First of all, acquisition and divestiture are our ongoing engines of value creation, you would hope. If you think about this company over the decades, we were acquiring and divesting in the '60s, '70s, '80s, '90s, last decade, and now again. We do it for three reasons. Either we don't run the business as well as we need to, okay, we don't run it as well as the best player in the industry, or it's not really a good strategic fit with our core competencies, or it's becoming structurally or strategically less attractive.
The last one's a bit of a judgment. The first one is you just look at the numbers, and those are the determinations that we made in these cases. I guess the last point is- If you look at the 10 businesses that we're keeping, we are global leader in seven of the 10, sales and profit and margin leader. We are number two in the eighth, we are number three in the ninth, and we are a focus niche player in the 10th. Final point, while we're divesting, we're also entering new businesses. This company entered the feminine incontinence business with Always Discreet last year. We bought two vitamin, mineral, and supplement brands, which we are testing and expanding, Swisse and New Chapter. We have a number of new organic growth opportunities that are in P&G Ventures. It's a balance.
I'm not going to say we get it perfectly right all the time, but the value we've created on the divestitures is significant. This time around, we think we'll create $7 billion-$8 billion cash over cash in the six major divestitures that we've done over the last two years. That's a pretty good return to shareowners.
Thank you.
Thank you.
Mr. Chairman. Mr. Chairman, I have Kevin Fogarty. Mr. Fogarty is a shareholder.
Good morning, Mr. Fogarty.
Good morning. In recent years, the company has adopted a substantial part of the program of the gay lobby, including, as I understand it, signing on to an amicus brief in the Supreme Court urging the overturning of marriage laws of many states across the country. I was wondering that on behalf of your customers and shareholders who may not have thought that was a good idea, could we be assured that the company will not be supporting laws to force people with deeply held moral objections to participate in activities that they are conscientiously objecting to and find deeply immoral, particularly when their services are readily available from others?
I guess I'll say just two things here. One, we very much appreciate your point of view, and two, I hope you can understand that we serve a wide range of consumers of all cultures and persuasions around the world. If you step back, this company's had a long-term commitment to diversity and inclusion, and frankly, it's unwavering. On the workforce side, this diversity allows us to stay in touch with consumers from, as I said, countries, cultures, races, religions around the world. Frankly, we believe, and it is our experience that a more diverse and inclusive workforce actually results in more innovation, better ideas, better execution. We support our employees' right to be who they are and to bring their whole selves to work in a safe and welcoming work environment. I hope you can appreciate that. Thank you.
Except that's not what I was talking about. I was talking about supporting laws to force other people, not you, not your employees, to force other people to get involved in things that they morally object to.
I don't think there's any forcing.
There's no-
We don't understand the force point.
There's no forcing. Yeah.
Sorry.
Discrimination laws for bakers who don't want to serve gay weddings and that sort of thing. Not just a hypothetical.
Okay. Thank you.
Are you for that or against that?
We're for diversity and inclusion.
Yeah, I think you got it.
We support the law of the land. We have to support the law of the land.
Mr. Chairman. I have Carl Beckman. Mr. Beckman is a shareholder.
Morning, Mr. Beckman.
Good morning. I reside right here in Cincinnati. I would like to say thank you to yourself and the board for keeping the shareholders in mind as you contemplate the dividend. I have several concerns about the business practices of the corporation. Unfortunately, I will only be able to speak about one. Number one, earlier this year, a media outlet reported that P&G donated between $1 million and $5 million to the Clinton Foundation several years ago. P&G was hoping to win the State Department's prestigious award for corporate excellence. P&G did win the award. six of the eight winners had donated to the foundation. In addition, 181 Clinton Foundation donors, including P&G, lobbied Mrs. Clinton's State Department. This appears to be crony capitalism. It is intolerable graft and corruption. Was the award worth the expense?
Presidential candidate Hillary Clinton has since said that if elected, she would raise capital gains taxes, rein in shareholder activism, and review executive salaries. Is this the type of anti-capitalism person that P&G would want as President of the United States? No wonder my fellow shareholders keep submitting proposals regarding political contributions to the shareholders. A rhetorical question, was P&G hoping that Mrs. Clinton become the next president? Mrs. Clinton may not even get the Democratic Party's nomination. Thank you.
Thank you. First of all, we do not make any donations to any presidential candidates, and I want to make sure everybody's crystal clear on that one. Second of all, we did get involved with the Clinton Global Initiative about a decade ago, and it was simply to work on one program, and the program was our Children's Safe Drinking Water program. We partner with CGI to accelerate social programs that benefit mothers, children, and families. Those happen to be our primary consumers around the world. The initiative actually allows us to make connections with a network of potential partners to deliver in some of these social programs. I mentioned Children's Safe Drinking Water, I think it's reasonably well known that we've also been involved with Pampers and UNICEF to provide life-saving neonatal vaccines for mothers and children.
We've worked, of course, on the empowerment of girls and women through our branded programs, such as Always Like a Girl. It's not a political organization for us. It is a way to deliver against our improving lives mission with very specific programs that meet very specific needs for essentially mothers, children, and young women. Thank you. Yes.
Mr. Chairman, I have Frank White. Mr. White is a shareholder and retiree.
Yes. Good morning, Frank.
Morning, A.G. I think I represent most of the people in the group this morning. I would simply like to thank you for all of the years that you have served Procter & Gamble, also all of the countless accomplishments that you've played a personal role in. I'd like to wish you the best in your new role in P&G and the rest of your life.
Thank you, Frank. Frank forgot to mention how much he coached and taught and mentored me when I was a kid. Frank, you know this is a team effort. It's a total team effort. It's a company strategy. Strong team of leaders, strong team of P&Gers around the world. Thank you. I will thank you on behalf of them.
Mr. Chairman, this is Neil Roth. Mr. Roth is a shareholder.
Morning, Mr. Roth.
Good morning. A couple of times now, you've mentioned the negative effect of currency on Procter & Gamble's profits and international presence. The strengthening dollar is not a secret. It has been going on for a long time. I'm wondering if you could discuss, or perhaps your CFO discuss, what currency hedging strategies the company has taken to deal with this, if any. If not, why not?
Okay. Actually, I'm going to let Jon talk about it. We have looked at this a number of times over the years and have come to the same conclusion every time. Jon?
Yeah. First of all, we want to be as operationally hedged as we can, sourcing materials locally, manufacturing products locally, and pricing as necessary to overcome those currency impacts. The truth is, if you look at the $1.5 billion of currency impact last year, roughly about 70% of that occurred in what are called non-deliverable currencies, meaning there aren't hedging markets or instruments. We're going to focus on the part that we can control, which is that operational hedging.
Okay.
I noticed that I still have a minute and a half.
No, keep going.
Just a quick follow-up. On the comment earlier about, that elicited your response about diversity and inclusion and you're serving everyone, it reminds me of a question that was asked of you several years ago at one of our other locations when somebody was questioning in a critical way Procter & Gamble's putting coupons in English and in Spanish. I think you said at that time that you are trying to appeal to and include a greater number of consumers, and by having the coupons bilingual, that would accomplish that. I think that that has probably served the company well. I think to the extent that the company does try to be inclusive, it is selling product to more people, and that's really the bottom line here.
Exactly.
You want to sell to more people. You want to include more people. Whether Tide goes to a straight couple or a gay couple, I don't think it really matters. You're selling the product.
Right.
If you have to do it in Spanish and English, if you have to do it through other channels, I think that that's probably the right business decision, and separating the political decision from that probably is the appropriate way to go.
Thank you. We are a business. We have to sell in Arabic and Chinese. Yep. I think we'll definitely take one more. We're over the limit, but we'll take one more question, please.
Mr. Chairman, this is Karen Meyer. Karen is a shareholder.
We've only got one more after.
Good morning. As we all know, the P&G stock price has dropped from a high of around $94 a share in January to the now $74 a share. This is almost a 20% drop in share value. In a recent webcast to employees, you mentioned that the current business is not being run in a manner that provides the TSR that the shareholders, such as myself, should expect. Clearly, the people making these significant business decisions are the corporate officers, executives, and directors that ultimately report to you. In other words, these directors, vice presidents, and other senior P&G leadership have drove the P&G bus into the ditch. You provide explanations for this longstanding poor performance that are the same old excuses of foreign exchange, poor market mix, too many brands, and too many employees.
Meanwhile, P&G competitors such as Kimberly-Clark, Reckitt Benckiser, Colgate, Georgia-Pacific, Unicharm, and others have had the same headwinds, and their stock prices continue to outperform The Procter & Gamble Company. You and your executive solution has been to jettison nearly 20% of the rank and file workforce and sell off numerous P&G billion-dollar brands that you yourself touted a decade ago as a key P&G corporate strategy. P&G is selling off several Gillette billion-dollar brands that you touted less than a decade ago as essential to P&G. Back then, you were seen as a genius for buying them. Now you're seen as a genius for selling them off. You posit that jettisoning employees and brands is necessary in order to right the ship. Yet companies that are the beneficiaries of this P&G brand fire sale are recording record profits and record TSR. Take a look, for example, at Smuckers.
What assurances can you provide me as a shareholder that these directors, vice presidents and presidents, and leadership that drove the bus into the ground are the same ones that can get us out? What actions will be taken by you and your successor with these employees should the bus remain in the ditch?
We are accountable, and the buck stops with me. As we tried to lay out in the business review earlier this morning, we would say there are tangible, concrete signs of improved operating performance across some of our biggest and most important businesses. Baby care, U.S., our biggest business in the world. Fabric care, U.S., our second-biggest business in the world. Gillette, U.S., one of our businesses in the world. We are in the middle of a big transformation. It's not going to change in a week or a month or a quarter, but we think we're about halfway through it. We're determined to deliver for you, our share owners.
Thank you.
Thank you. Yes, please. I can't One more.
Thank you.
Sure.
Mr. Chairman, I have John Chang. Mr. Chang is a shareholder.
Morning, Mr. Chang.
Good morning. Just a couple questions that are quick. The dividend's gotten very good in terms of percentage over the last few years with 7% growth, and we're paying about 3%-0.7%. Recently, the dividend growth has slowed down a little bit, and our revenues and earnings haven't grown as much. I just want to get a perspective of how much the company feels the dividend is a sustainable, the growth rate. That's one quick question. The other quick question is, you've pared back on your brands. Are you going to pare back on any of your regions that were participating as some of your competitors have done?
Yeah. Okay. On the second one, we're always looking at where we should be in business, where is the size of the prize worth it, where are the odds of success good enough. That's just an ongoing process, right? I would say the portfolio choices have been made at the company level. Now each of the operating businesses are working through the choices that they're making, sort of country by country, subcategory by subcategory, brand by brand, channel, and customer by customer. On the first question, yeah, obviously, the dividend and the rate of increase is proportional to the operating performance of the business. I think it's pretty clear, given 59 dividend increases in a row and the fact that we've paid a dividend every year since incorporation, that we're pretty committed to the dividend.
We have to, with the directors, make a determination every year about what's the appropriate dividend, assuming the results have been good enough to pay it. Okay? Thank you. Thank you. We have the results. We now have the results of the voting. I'm advised by the Inspector of Election that each of the 12 nominees listed in the proxy statement has received more for votes than against and has been elected to a one-year term expiring at the annual meeting in 2016. I've also been advised that the board proposal to ratify the appointment of an independent registered public accounting firm has been adopted with at least 98% votes cast in favor. That the board proposal for an advisory vote on executive compensation has been, here we are, adopted with at least 91% votes cast in favor.
Certified totals and percentages will be available later from the secretary. This completes today's business. I again want to express my appreciation for your confidence and support. I want to thank so many of you who have been long-term owners of P&G stock. I want to wish you all a very good day. Now, may I have a motion to adjourn?
Motion to adjourn.
Thank you very much. This meeting is adjourned.