Good morning, ladies and gentlemen. Welcome to the 1st virtual P and G Annual Shareholders Meeting. In order to handle our business expeditiously and provide time for shareholder questions, we've established a few simple rules about the conduct of the meeting. A copy of the agenda and guidelines for the conduct of the meeting are available on the welcome screen. We ask that you cooperate in following these guidelines.
In fairness to all shareholders, intend to enforce the rules. Shareholders of record and proxy holders who provide their valid control number will be able to ask questions during the meeting by either calling the telephone number on your screen or by typing and submitting the question using the Ask a Question box at the lower left portion of your screen. Questions pertinent to meeting matters will be answered during the meeting as time allows. If we receive substantially similar written questions, we may group such questions together and provide a single response to avoid repetition. If we are unable to respond to a shareholder's properly submitted question due to time constraints, we will respond directly to that shareholder using the contact information provided.
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 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 these forward looking statements, please see the company's most recent 10 ks, 10 Q and 8 ks reports, which are also available on the company's website. Please join us now for the singing of the national anthem.
Oh, say can you see by the non early light. Through the perilous fight. O'er the ramparts we watch,
Thank you, Leslie. Leslie is one of our very Thank you, Leslie. Leslie is a P&G employee on our communications team. Good morning, ladies and gentlemen. I'm David Taylor, Chairman of the Board, President and Chief Executive Officer
of the Procter and Gamble Company.
I would like to welcome everyone to P&G's 2020 Annual Meeting of Shareholders. It's a very different meeting this year and we appreciate you joining us as we undertake our 1st virtual annual meeting. The safety of our employees and share owners is paramount and this was the best format to ensure everyone's safety. In fact, while several of us are in the building together today, we are seated in several different rooms following social distancing guidelines and we are all wearing masks. But we will do our best to make this meeting as helpful and informative as possible for you.
This meeting is now called to order. Notice of the meeting was sent to each shareholder of record and a quorum is present in online present online or by proxy. I'd like to get started with introductions. Joining me in presenting today are John Moeller, our Vice Chairman, Chief Operating Officer and Chief Financial Officer and Debbie Majoris, our Chief Legal Officer and Secretary. The members of the Board are also on the line today.
I will introduce them individually. Frank Blake, former Chairman of the Board and Chief Executive Officer of The Home Depot Incorporated Angela Brawley, Former Chair of the Board, President and Chief Executive Officer of WellPoint Inc, now known as Anthem. Angela is the Chair of the Governance and Public Responsibility Committee Amy Chang, Executive Vice President and Executive Advisor at Cisco Systems Inc. And Founder and Former Chief Executive Officer of A Company Incorporated Scott Cook, Chairman of the Executive Committee of the Board of Intuit Incorporated. Scott is retiring from P&G's Board today after 20 years of valuable service to our Board and our company.
We will miss Scott's wisdom and his insight. We want to take this opportunity to recognize and thank Scott for his dedication to our company. Joe Jimenez, Co Founder and Managing Partner of Aditum Bio and the former Chief Executive Officer of Novartis AG. Joe is the Chair of the Innovation and Technology Committee. Deborah Lee, Chief Executive Officer of Leading Women Defined Incorporated and former Chairman and Chief Executive Officer of BET Networks.
Deborah is the newest member of our Board having been appointed in August. She brings a wealth of skills and experience and we're very excited to be working with her. Teri Lundgren, Operating Partner of Long Term Private Capital and the former Executive Chairman, Chairman of the Board and Chief Executive Officer of Macy's Incorporated. Terry is the Chair of the Compensation and Leadership Development Committee. Christine McCarthy.
Christine is the Senior Executive Vice President and Chief Financial Officer of The Walt Disney Company Jim McNearney, Senior Advisor at Clayton DeBilaire and Rice LLC and Former Chairman of the Board, President and Chief Executive Officer of the Boeing Company. Jim is also our Lead Director. Nelson Peltz, Chief Executive Officer and Founding Partner of Triumph Fund Management LP Meg Whitman, Chief Executive Officer of Quibi and Former President and Chief Executive Officer of Hewlett Packard Enterprise Pat Wirtz, former Chairman of the Board and Chief Executive Officer of Archer Daniels Midland Company. Pat is the Chair of our Audit Committee.
We also have a number of
our other senior officers on the line with us today. Joining us are Joe Ucazoglu and Jeff Potts of Deloitte and Tuse. Mr. Ucazoglu is the Chief Executive Officer of Deloitte and the Senior Advisory Partner on the P and G account. For the past 5 years, Mr.
Potts has been the partner responsible for all services provided to P&G and he directly supervise the audit of the company's fiscal 2020 financial statements. Mr. Ukluzoglu and Mr. Potts are present in the event there are questions that are more appropriately answered by the auditors. As Chair, I have appointed Peter Daskovich of Broadwiche Financial Solutions as Inspector of Elections for the meeting.
He will supervise the voting. Finally, we have John Chevalier, Senior Vice President of Investor Relations. John will assist me today by reading the questions that you submit through the online system. I now declare the polls are open. The polls will close after all the proposals have been presented.
We will proceed first with the election of directors. All directors elected to this meeting will hold office for a 1 year term until the 2021 Annual Meeting of Shareholders and until their successors are elected. In order to be elected, a director must receive more for votes than against. If you'd like to vote your shares now, please follow the directions on the screen in the Vote Here section at the bottom of your screen. If you've already voted, there's no need to take any action now unless you want to change your vote.
I'll now ask Debbie Majoris to place a nomination to 12 nominees.
Thank you, David. 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 2021 and until their successors are elected: Frank Blake, Angela Brawley, Amy Chang, Doe Jimenez, Deborah Lee, Carrie Lundgren, Christine McCarthy, Jim McNearney, Nelson Peltz, David Taylor, Meg Whitman, Pat Wirtz.
Thank you, Debbie. All the nominees are current members of the Board of Directors. We can take up to 3 questions or comments on any single business item. John, do we have any questions related to the election of directors?
Yes, David, we have one question. The question is how much P and G common stock is currently held by Triumph Partners and related persons?
Thank you for the question. Trium holds approximately 10,000,000 shares today. You can see the public filings if you want to get the details on this.
Further questions on this item?
Thank you. The Board recommends to vote for each of these nominees. We believe that each of them has valuable skills and experiences to serve our company and the shareholders. We'll now proceed with the Board proposals. 1st proposal is to ratify the appointment of Deloitte and Touche as the independent registered public accounting firm.
This proposal appears on Page 72 of the proxy statement. Although the Board of Directors is not required to submit this matter to the shareholders, we believe it's important that you have a say in the appointment of the independent public accounting firm. John, were there any questions or comments submitted on this item?
David, there are no questions on this item. Thank you.
The Board of Directors recommend to vote for this resolution. The Board believes that the retention of Deloitte and Touche as the company's independent external auditor is in the best interest of the company and its shareholders. Next, we have the Board proposal for an advisory vote on executive compensation, otherwise known as say on pay. The proposal appears on Page 73 of the proxy statement. John, are there any comments or questions?
David, there are no questions on this item.
Thank you. We design our executive compensation programs to motivate our leadership team to win even during tough economic times and to achieve our fundamental objective, which is to create value for our shareholders. Accordingly, the Board of Directors recommends to vote for this resolution. Next, we have the Board proposal to approve the Procter and Gamble International Stock Ownership Program as amended and restated. This proposal appears on Page 74 of the proxy statement.
John, are there any questions or comments on this proposal? David, there are no questions on this item. Very good. We believe the international stock ownership program plan, which has been in place for many years and is available to more than 60,000 of our global employees, is a valuable program that encourages both P and G Savings and employee ownership in P and G. The Board of Directors recommends to vote for this resolution.
This concludes the review and discussion of the Board proposals. We have 2 shareholder proposals this year. The first one was submitted by the Green Century Equity Fund and it requested the company provide a report assessing if and how the company could increase the scale, pace and rigor of its efforts to eliminate deforestation and the degradation of intact forest in its supply chain. Is there a representative on the line to present this proposal?
Yes, I'm here. It's Jessie Waxman. Your line is now open.
Hello. Good afternoon. Please proceed.
Thank you. Fellow shareholders and member of the Board, on behalf of Green Century Funds and its investors, I'm here today to advance item number 5 on Procter and Gamble's proxy statement, which urges the company to assess how it can increase its efforts to eliminate deforestation and forest degradation in its supply chain. Protecting forest is vital for combating climate change, the degradation of ecosystems and biodiversity loss, all of which pose systemic and material risks to our portfolios. Additionally, the strong correlation between environmental degradation and the increased occurrence of zoonotic diseases like COVID-nineteen has reinforced investors' interest in addressing forest related risks. While P and G has taken some steps, are concerned that the company's approach fails to adequately address the company's impact on forests and to mitigate operational, competitive and reputational risks.
By way of a few examples, one, despite setting a goal in 2014, only 8% of P and G's palm oil is sustainably sourced. A significant portion continues to come from suppliers that de force illegally and that employee forced labor. 2, P and G has pursued a commitment to use environmentally preferred fibers by relying on Brazilian eucalyptus, a water intensive crop. By comparison, competitors like Kimberly Clark, Target and other companies produce products made from bamboo or 100% recycled material or other sustainable alternatives to which P and G risks losing further market share. 3, for 2 years, P and G has been the target of an escalating public pressure campaign from sourcing from regions like the Boreal that are critical for mitigating climate change and protecting endangered species.
Further, P and G's It's Our Home commitment was met with criticism for failing to address such upstream impacts. 4, for failing to meet its own commitments and shifting societal expectations, P and G has received negative coverage in a slate of high profile papers in the last year, including the Financial Times, Forbes, Bloomberg and Reuters. And Mission 2,030, which seeks to address the tension between finite resources and growing consumptions is a laudable goal. But we know that it's possible to set robust policies that comprehensively address operational, reputational and systemic risks. For example, Kimberly Clark has committed to reduce reliance on natural forests by 50%, to reduce 90% of its tissue from recycled alternative and FSC certified fibers by 2025 and to reduce Scope 3 emissions by 20%.
As shareholders, we're concerned about the Board's response to our proposal. As consumer preferences, social license and the state of our environment change, it's imperative that sustainability be at the heart of the company's plans. P and G's approach to date has not lived up to those challenges, and we therefore urge the Board to consider more comprehensive measures, including committing to reducing P and G's reliance on wood based virgin fibers, not sourcing from ecosystems critical for fighting the climate crisis and adopting supplier noncompliance protocols, and to other shareholders, we urge you to vote for this proposal. Thank you.
Thank you. We appreciate your advocacy on this important topic and we agree responsible sourcing is important, not just for our business, but also for the environment and the people who depend on it. We see it as our responsibility to ensure no one has to choose between the products they use today and what they hope to preserve for tomorrow. This proposal asks us to assess how we can increase the scale, pace and rigor of our efforts to eliminate deforestation and the degradation of intact force in our supply chains. It's a question we too have asked and it's why we're already accelerating our commitments in this space.
Our suppliers adhere to multiple sustainable forest management criteria, including no deforestation or degradation. For every tree we use, at least one is regrown. Since 2015, 100% of our wood pulp has been 3rd party certified. And last year, we increased our commitments to Forest Stewardship Council or FSC certification from 40% to 75%. FSC is the most robust international standard in the marketplace.
We also continue to make significant investments in innovative fiber alternatives, committing at least $20,000,000 over 5 years. Our goal is to develop fibers that are consumer preferred, sustainably sourced and can be produced at scale. Today, there are no non wood fiber sources that meet this criteria. Our commitment extends even further and includes guidelines for protection of endangered species such as Caribou, sourcing from responsibly managed forest, using recycled fiber in our cores and fiber based packaging, and importantly, respecting indigenous peoples' rights as outlined in the United Nations declarations on the rights of indigenous peoples. We continue to work collaboratively with the World Wildlife Fund, The Nature Conservancy, Rainforest Alliance, Arbor Day Foundation and American Forest Foundation, all of whom share our common goals and who are focused on long term, sustainable and meaningful solutions.
Palm Oil is also mentioned, so it's important to note that we have already achieved 100% RSPO certification for the palm oil used in our products and have committed to achieve 100% RSPO certification for the palm kernel oil used in our products by 2022. RSPO is the roundtable on sustainable palm oil, a global multi stakeholder coalition that leads standards, accreditation and auditing to facilitate the sustainable sourcing of palm oil. Forestry is an important part, but only one part of P and G's broad environmental agenda, spanning climate change, water, energy and waste. Our comprehensive ambition 2,030 program is well underway with a goal of creating value while having a measurable positive impact on society and our environment. Bottom line, we agree on the importance of taking steps today to preserve a strong tomorrow.
We are doing just that. And while we may not see eye to eye on all of the steps to get there, I want you and all P and G shareholders to know this is a topic of great importance and one that has our continued focus and commitment. John, are there any questions or comments on this proposal?
Yes, David. We have 3 questions. I'll read all 3 and allow you to respond to them comprehensively. The first question is your sourcing practices fuel deforestation and intact forest degradation harming communities, threatened species and the global climate. What steps will you take to eliminate these risky practices from your supply chain and how quickly?
2nd question, Dear Mr. Taylor, what is it going to take for you to respect free prior and informed consent for indigenous communities and get critical Caribou habitat out of your supply chain for all of your tissue products. We have gone above and beyond what it should take for you to make real commitments to protecting our forests, our climate and our people. What will it take, Mr. Taylor?
Question 3. What is the company going to do to eliminate forest degradation and deforestation to ensure free prior consent for traditional communities and to ensure human rights are respected by its suppliers moving forward.
Thank you all for your questions and comments. To close out this topic, I'm going to offer a few more thoughts on just a variety of the questions that were asked. First, we recognize the importance of the boreal forest, which is why 100 percent of the pulp we source is certified by leading third party certification systems to ensure forest are responsibly managed. 100% of our suppliers adhere to a broad set of sustainable forest management practices, including measures that protect biodiversity, endangered species and respect the rights of indigenous peoples. Canadian governments own over 90% of the forest land in Canada and less than 0.5% of Canadian forest are harvested and replanted annually for all industries, including lumber.
Beyond the requirements of independent forest certification plans, Canada has rigorous forestry policies. They mandate these forests to be harvested responsibly without any deforestation. And you made a comment also on recycled fibers, I want to address that one as well. Recycled fiber today is not used in premium tissue products. When you refer to others using recycled fibers, it's in the away from home market, which is not a market that P and G competes in today in the premium tissue market for at home use, which is the market we participate in, the use of recycled paper is less than 1% and it's gone down in the last 5 years because it doesn't meet consumers' needs.
On the other hand, we can and are progressing packaging innovation to achieve 100% recycled fiber in our fiber based Family Care packaging. We're working on formula innovation and committing $20,000,000 investments to accelerate research in alternative fibers and FSC certified fast growing forest fibers. So we share the commitment to do the things that you're asking. We've got to find ways to do both, which is to meet consumers' needs in the at home premium tissue market, which is what we participate in. None of our competitors that have any meaningful share use recycled fiber in that.
On the other hand, there are uses for recycled fiber and we're aggressively pursuing those. Again, we see like minded on most of these things. It's specifics that at times are misrepresented in terms of the markets we compete in. But I do I thank you very much for the passion in this area. Is an area we take seriously.
And frankly, we take all of this input on board and we'll continue to work on doing better and better in this area and working with the respected certification programs around the world. So thank you very much. Next, in this area, I do comment, P and G is a leader, not a laggard, and we will continue to work aggressively. Next, let's go to the next topic. The second proposal was submitted by As U Sow in a request that the company published annually a report assessing the company's diversity and inclusion efforts at reasonable expense and excluding proprietary information.
AGU Sow has chosen to submit a recorded presentation of this proposal, and we will play that now.
My name is Robert Xavier Schneier Williams and I'm speaking on behalf of the non profit advocacy organization, AZUCEAU. I formally move proposal number 6. This resolution request that Procter and Gamble publish an annual report assessing its diversity and inclusion efforts. I'm a college senior and worked on the research underlying as you saw workplace diversity scorecard, which will be published at the end of October. Soon, I'll be graduating into workforce for men of color, especially black men like me face huge career headwinds.
Not only will the coronavirus and the economy be my major concern while looking for my first full time job, I'll have to also consider which companies are most likely to give me a fair chance of proving myself and allowing me to contribute to their success. As a 21 year old Black man, I'm also a member of 1 of the segmented audiences Procter and Gamble is hoping to reach through this racial justice focused marketing. The content I had seen from P&G on being black in America resonated with me. It felt like P&G was an ally brand, one that truly understood the black experience and was seeking to change racial discrimination and injustice. When I learned that P&G declined to share diversity and inclusion data on its own workplace, I felt let down and hurt.
Feels like my favorite superhero turning out to be a villain. The company just released its EEO-one form, which shows workforce composition data, but it continues to decline to share key inclusion statistics such as recruitment, retention and promotion rates. In the proxy statement, P and G sought to reassure investors of a strong and effective workplace diversity program. With a strong diversity program in place, a company's lack of transparency, not the number themselves, are what represent an unnecessary business risk. In decline to share its workplace inclusion data, P and G undermined significant advertising efforts.
Capturing diverse consumers is a focus of P and G's growth strategy. If P and G were able to replicate its general marketing performance with diverse consumers and the words of Chief Brand Officer, Mark Pritchard, the size of the prize is big, up to $1,000,000,000 extra sales just by achieving market shares equal to the national average on all of our brands. Given its reliance on diverse consumers, P and G needs to be more transparent, more honest and more committed than other companies. Yet, it is lacking. Our research shows, for example, as it relates to gender, approximately 15% of the S and P 100 published promotion data, 20% show recruitment data and 11% show retention data.
CNG's short film, The Choice shows the words not being racist is
not enough. Now is the time
to be anti racist. Words and feelings are not enough. Now is the time to take action. The request for P and G's workforce inclusion metrics is a reasonable ask for material data from a company that has presented itself as a leader on diversity issues. It is both confusing and worrying that is unwilling to release this information.
Thank you.
Thank you, Robert. Let me first say unequivocally that equality and inclusion is not something we believe, it's something we live and the actions we take every day at P&G. I'm also proud of the work we've done on the look, the choice and other efforts you mentioned. They are making a difference in bringing people together at a time when our country and our world really need it. There's tremendous diversity within P&G.
The more we reflect the consumers we serve around the world, the more we win with consumers around the world. Our diversity is improving substantially as a result of the strong programs we put in place because of our commitment to P and G people all over the world. For many years, we shared our diversity progress within the company, and we're doing even more to transparently share our progress publicly. Today, on pg.com, we fully disclose the gender diversity of our Board of Directors, Global Leadership Council, total P and G Management and all P and G employees. We also disclosed the race and ethnicity across these same groups for our U.
S. Employee base. I'm pleased to say that as we shared on png.com, 50% of our Board of Directors nominees, 41% of our Leadership Council and 48% of our managers are women, 28% of our Board of Director nominees, 36% of our Global Leadership Council and 28% of the managers in our U. S. Workforce identify as multicultural.
These numbers stack up very well against nearly all Fortune 100 Companies. We're proud of our progress and we know there's more work to do. We recognize that improving representation is a journey. We have shared our aspiration of fifty-fifty representation of women at all levels, all functions and all geographies. Similarly, we recently declared our aspiration to achieve 40% representation of multicultural employees in our U.
S. Workforce. The Board has been and continues to be a strong proponent of equality and inclusion and regularly reviews our progress towards our goals. We also believe that equality benefits all of us and it will take all of us working together to make a bigger impact. We expect our stakeholders to hold us accountable and we believe the detailed representation data we will continue to share on an annual basis, including our most recent EEO-one report is the best way to track our progress.
John, are there any questions or comments on this proposal?
David, there are no questions or comments on this proposal.
Very good. Thank you for your comments, for the question. We strive to reflect the billions of diverse people we serve around the world at every level of our company and leverage that diversity to improve the company, strengthen our ability to serve consumers and positively impact the communities around us. At P and G, we quality and inclusion are achievable for all, where respect and inclusion are the cornerstones of our culture, where equal access and opportunity to learn, grow, succeed and thrive are available to everyone. P and G has an unwavering commitment to diversity inclusion, and we do not believe the additional report will be meaningful in helping us further our efforts.
Accordingly, the Board of Directors recommends a vote against this resolution. I now declare the polls closed. Before we get to the report of the business, I'd like to announce that the Board of Directors has declared P and G's quarterly dividend. The dividend of 0.79 $07 per share will be payable on or after November 16, 2020, to common stock shareholders of record at close of business on October 23, 2020, and to preferred stock shareholders of record at the start of business on October 23, 2020. P and G has been paying a dividend for 130 consecutive years, ever since the company was incorporated in 18/90.
We've increased the dividend for 64 consecutive years. We're committed to returning cash to you, our shareholders. Now I will announce 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 has been elected to a 1 year term expiring at the annual meeting in 2021 and until their successors are elected. That the Board proposal to ratify the appointment of the independent registered public accounting firm has been adopted with at least 95% votes cast in favor.
That the Board proposal for an advisory vote on executive compensation has been approved, adopted with at least 91% votes cast in favor that the Board proposal to approve the Procter and Gamble International Stock Ownership Plan as amended and restated has been adopted with at least 98% votes cast in favor that the shareholder proposal requesting a company requesting a report on the company's efforts to eliminate deforestation has been approved with approximately 67 votes cast in favor and that the shareholder proposal requesting that an annual report on the company's diversity inclusion efforts was not approved with only 37 votes cast in favor. Certified totals and percentages will be available later from the secretary. I'd like to acknowledge the proponents and the many people involved in these shareholder proposals. We value the engagement with shareholders as well as the dialogue and the insights that help us better serve P and G Consumers, P&G's shareholders and the many stakeholders involved in our business. We remain deeply committed to effective governance, transparency, environmental sustainability and equality and inclusion.
And with regard to the proposals, we will respond as appropriate in due course. That concludes the business items on our agenda. May I have a motion to adjourn?
Motion to adjourn.
Thank you. I now adjourn the meeting and we will move on to the report on the business and the question and answer session. We will take questions from shareholders through the Ask a Question box in the online portal or on the phone line listed in your proxy materials, both of which are now open. But before we get to Q and A, because we could not have our meeting in person this year, I've recorded the report on the business and we're going to play it now for you. Questions or comments on other matters related to the company's business that have not already been discussed.
We will take questions from shareholders through the Ask A Question box in the online portal or the phone line that was listed on your screen. We'll try to get through as many as we can in this 30 minute period. Out of respect for everyone who would like to ask a question according to the rules established for the conduct of this meeting, each shareholder is allowed 2 minutes. There will be a limit of 3 speakers on any one subject. Get right to them.
John, can you give us the first question, please?
Yes, David. We've received a few questions on the composition of the Board of Directors, particularly what is P&G's action plan to include South Asian talent and other non U. S. Citizens on the Board of Directors?
First, it's a good question because it's very important that our Board have the set of experiences and to the extent possible the diversity to be able to address the many challenges that the Board faces and the company faces. And diversity and inclusion is critical at all levels in the company, including our Board, and improving it is a continual process. And we've made very strong progress in recent years all the way in our whole company from entry level recruiting all the way to senior leadership appointments. Our Board reflects diversity in many important ways and the Board's overall diversity continues to be a significant consideration in the Board nomination process. Without a doubt, P&G is fully committed to a diverse organization and inclusive culture that enables us to serve all consumers around the world.
And specifically in South Asia, one of the things that helps us in that area, because I very much agree with the individual that wrote the question how important that is the future of the company. There's many ways you can get that experience. For instance, I had the benefit early in my career of working in South Asia for 3.5 years. We've had a number of our individuals and our senior management team have that. That helps.
We also have executives on our Board that have had run global businesses that had significant operations in South Asia or broadly with global businesses. That gives them a set of experiences they can draw from. In addition, we continue to look for talent that not only has experiences, but to the extent it brings added diversity, we're very open to that. And you've seen the progress we've made over the last several years and we'll continue to work or making sure we have a Board capable of providing the perspective and governance that you'd expect. And I can tell you today, the Board is doing an outstanding job doing just that.
Next question?
Yes, David. The next question is how much has the U. S. Corporate tax rate reduction from 35% to 21% contributed to bottom line profits?
Our Chief Operating Officer, Anthony Financial Officer on this as well. John, you want to take a offer some perspective on that?
Certainly. That's actually a very complicated piece of legislation that aims to do a number of things, including prevent capital flight from the U. S. And to try to ensure a competitive rate for U. S.
Companies, which gives them every opportunity to grow, to create jobs and increase American standard of living. As I mentioned though, it's very complicated. There are 3 major parts of the legislation which impact P and G cash flow and earnings. The first is, what the questioner mentioned, which is the reduction in rate on U. S.
Income. There is, however, 2 other pieces that go the other way. And the first is a tax that is levied on historical earnings in non U. S. Markets.
That for us is about a $4,000,000,000 impact that gets paid over about 8 years. And there's a disallowance in the legislation for certain U. S. Tax credits that were previously allowed. And when you put all that together, it's 6 to 7 years under the current legislation before there's any net payout to the Procter and Gamble company.
So the benefit from a cash paid standpoint in the near term is relatively modest. John,
next question please.
Yes, we have another question. Mr. Peltz is 13 years older than the director retirement age for directors and 13 years older than the average age of the current Board of Directors. At what point will you stop making a special exemption for this one particular director or just get rid of the retirement age?
Just a couple of comments on that. First, 3 years ago in 2017, there was a proxy contest, and we listened to our investors. And at that time, about 50% of investors thought that Nelson would add Nelson Peltz would add to the Board. We decided to vote him on, the Board did. And to me, it's been a very positive experience for the company and I think for our shareowners.
Nelson and all of our directors are very engaged. They all provide valuable input and to me are contributing to the success that you're experiencing in our company today. We benefit from the wise counsel of all of our directors. And I can say with very clear set of experiences that all the directors, including Nelson Peltz, continue to contribute and help the company grow and get better over time. Next question?
Yes, David, we have a comment. The Pampers commercial is the best. Let's remember the Summer of Love is something different than all the difficulty we're currently going through. Moving on, we do have another question. We've received multiple additional questions on the topic of our efforts prevent deforestation in our supply chains, including questions from Zoe Van Buren and Kyla Van Buren.
The questions focus on how we are holding certification agencies accountable and how we plan to address deforestation and its impacts on the rights of indigenous people. Do you have any additional comments on this topic?
Yes, I do, because it's very, very important. And frankly, we share the interest in addressing this. It's very important. Just a couple of things. We continue to be highly engaged on environmental stewardship at multiple levels and across every operating unit of our company.
We're focused on ensuring we do the right things in the right ways, innovating using science and nature for the long term. We've made a set of industry leading commitments. We're confident that we will be able to help protect, grow and restore for us globally. The groups that we work with, these certification systems, I just want to add a little bit color on what they do because when we talk about 3rd party certification systems, whether it's FSC, which we think is the most strict, or SFI or the PEFC, all of these ensure forests are responsibly managed. We have again 100% of our wood pulp we source is certified by 1 of these 3.
These 3 forest certification systems used by 100% of our wood pulp suppliers adhere to multiple criteria for sustainable forest management, including ensures no deforestation number 2, replanting and reforestation after harvesting preserves water, soil and air protects biodiversity, respects the rights of indigenous peoples, protects endangered species and for every tree we use, at least one is regrown. And we partner with these 3rd party forest certification systems that ensure our sourcing respects indigenous peoples' rights as outlined in the United Nations declarations on the rights of indigenous peoples. So this is one where I don't think we have a disagreement in many ways. There may be differences in the way we people ask to report. But if you look at our market, P and G to me is doing the right things and we will continue to engage and listen and work to do even better over time because we do see sustainability as an opportunity for innovation, which is why we're progressing packaging innovation to achieve 100% recycled fiber in our fiber based family care packaging.
And as I mentioned earlier, including investing $20,000,000 investments to accelerate research in alternative fibers and FSC certified fast growing forest fibers. All of this is because we do care and we believe that P and G does need to have a meaningful and industry leading set of actions and that's just what we're doing. Thank you for the question and we will continue to engage with all stakeholders in this area because we recognize it's high interest and we share that interest and that commitment to do the right thing over time. Next question?
Yes. Our next question is, I'm concerned that P and G has been selling off too many tertiary brands. Historically, several tertiary brands have become primary brands. I view the selling of brands such as Folgers, Zest, Duracell, Iams, etcetera of concern regarding categories that may prove successful in the future. I do support the growth of strategic brands and strategic categories.
That said, I also encourage the development of new brands and new categories. Will you please comment?
We have made a set of choices over time to participate in categories that we think we have a basis to win over time. They tend to be categories that are more daily use, categories where performance drives brand choice. And while there are many different businesses we could be in, I think as evidenced by our results, what you've seen is the categories we're in, we're able to compete very effectively in. And in many cases, if you look at some of the categories or businesses we sold, they have not fared as well in the marketplace, in part because the category is not as attractive as the ones we currently participate in. And in terms of brands, we have made a choice many years ago to reduce the number of brands to be able to focus on our core, build trusted, superior performing brands, and we'd even broaden our definition of superiority to make sure these brands can continue to grow and attract users.
For that reason, we work very hard on ensuring we're expanding our level of performance advantage on the product, on the package, on our go to market capability, on our communication and on the value we provide consumers and customers to support our brands. Working together with our team, I think you've seen in the marketplace, this strategy is working and working very, very well. In addition, we do share your interest in P and G entering new spaces. In addition to our Corby and Healthy, which is first and foremost job 1, have invested significantly in our P and G Venture area and into a GrowthWorks, which is both of these are aimed at identifying new sources of consumption that P and G can serve. Our P and G Ventures Group, in fact, has launched some additional brands and went into new spaces.
We've launched Xevo, which is our first move into the natural insecticide category, and it's off to a very good start. Some of you may have had an opportunity to buy. You may have seen it in stores like at Home Depot or Target. We have additional products coming out that will be coming out shortly. Many of these we've talked about in past investor meetings.
So we share the interest in 1, growing our core with trusted superior performing brands and number 2, entering new categories, but in categories where we believe the daily use and they tend to be categories where performance drives brand choice. That plays to P and G's strengths and will continue to do so. Our interest is to grow the company sustainably over time in a way that creates value for you, our shareowner, and for the benefit of all stakeholders. Next question, John?
Yes. The question is, I'm happy P and G is helping with supply of personal protective equipment such as procedure style face masks and face shields. Will we also be helping to alleviate shortages of other types of PPEs such as gowns? I read these are also in short supply as still our N95 certified respirators.
We have focused on things that we could make with the equipment we have that we're well positioned to do so. And our people have been incredibly inventive on this. When the pandemic first hit, in many cases, it was our employees that came forward and said we could repurpose some of our equipment. Our teams in Gillette, in Boston, as well as some of our development people here in Cincinnati were able to repurpose some of our packaging equipment and turn them into face shields. And to date, we've donated 100 of 1000 of face shields to hospitals and other medical workers that need them.
Same is true on the face mask that you mentioned. We've been able to source that equipment and ensure that all of our employees worldwide have access to mask. In many cases, we've even sent them to their families to help them keep their families safe. In addition, we've donated millions of masks, often to frontline workers or their healthcare workers. And the same is through sanitizers.
We don't make we weren't making sanitizers, but we had some folks at one of our plants that said we could repurpose some of our perfume making equipment and make sanitizer. And within a very short order of time, we were shipping almost 45,000 liters a week, providing both to our employees to be able to stay safe, but for our facilities, but also donating to others that needed it. So what we have done is we focused on those things that we can do and do quickly because the need is now. Some of the other areas are require equipment we don't have and the time to source it would not make sense. There's others better positioned.
I think you'll find that the response P and G has had, in addition to all of these PPE, we've been donating meaningful amounts of product and other cash donations to help those that help others. But CMG believes very strongly in 3 clear priorities right now. Number 1, take care of your employees, keep them safe, keep your workplaces safe. Number 2, make, pack and ship the products, the health, hygiene and cleaning products that consumers need around the world so we can serve our consumers when they're in need. Number 3, we want to serve the communities in which we live and work.
And we're working to serve these communities holistically with our time, our talent and our technical capability, doing all the things that I just described. And we think if we can do these and do these well, P and G will make a big difference, both to the consumers we serve and to the many other stakeholders that depend on us that we can help. Thank you for the question. And we again, we share your passion on this one. It's really important that we do everything we can until we gather this pandemic.
John, next question?
Yes. The next question is, will P and G look at reentering the pharmaceuticals business?
We don't talk about future plans, but I'd say what we've done to date would indicate we like the categories we're in and we really have made choices in areas that we think serve both our shareholders well and play to the company's strengths. Our choice to exit the pharmaceuticals, to me, was a thoughtful choice at the time and certainly stand by that. We do see the consumer healthcare, the over the counter healthcare is a very attractive category as evidenced by our purchase of the Merck German business several years ago or a couple of years ago that is doing very, very well and will continue to work to grow that business. At this time, we have no plans to go in the pharmaceutical business Big White. Next question?
Yes, next question. P and G and Unilever recently swapped places in global companies who put out single use plastics. Unilever used to occupy the 5th slot and P and G the 6th slot, keeping us out of the top 5. P and G now occupies the 5th slot. What is P and G doing to remove or minimize the amount of single use plastic we put into our recyclable into packaging and goods?
Related to this, what is P and G doing to make its packaging more easily recyclable? I've heard composite packaging, multiple different polymers fixed together are not easily separated by consumer or commercial collectors orders and recyclers, and especially packages with sleeve labels, covering more than 40% of the outside. These are called horrible hybrids and cause most of these packages to be tossed out or misidentified by optical sorting equipment, and thus are considered non recyclable.
I very much share and we very much share the objective to eliminate plastic waste in the environment. The rest of the issue of plastic waste in the environment is everybody's responsibility, including the companies that use much of the plastic in the world today. We all need to do more to show that we have a long term solution and that we have a plan to get there, which is why we're looking at the entire ecosystem across our brands. By 2,030, we aim to have 100% recyclable or reusable packaging, also to reduce our use of virgin petroleum plastic by 50% and to keep recyclable plastics out of landfills and oceans. We're making changes now and bringing long term solutions going beyond our supply chain to invest in recycling facilities, to develop new technologies and to collect plastic waste.
Our brands, our suppliers and our partners are all working on solutions that drive circularity so that plastic is treated as a resource that's collected, recycled and reused. In fact, we helped start and have a leadership role in the Alliance to End Plastic Waste. I'm the group's Chairman. That group is now over 40 companies that are working together, their members across the entire value chain that have invested 1,000,000 of dollars. In fact, over the next 5 years, the alliance of which we're again the chair and investing in plans to invest $1,000,000,000 that the companies are putting in to find circular, scalable, sustainable solutions to eliminate plastic waste in the environment.
Our goals are to advance infrastructure development, innovative solutions, education and cleanup efforts to end plastic waste in the environment, especially in the oceans. Now ending plastic waste will require unprecedented levels of investment, innovation and partnerships, and we're definitely committed to making a positive difference as evidenced by the actions we've taken and by our participation and even leadership role in the Alliance to End Plastic Waste. So we shared it is a very challenging task because in many cases, plastic is the best alternative, has the best life cycle footprint. Having said that, we need to make sure that all plastic has a second life. And to the extent we can find technologies and innovation that help, you can count on P&G to be at the lead in working that aggressively.
Thank you. Next question, please.
Yes. The next question is, hello, regarding the diversity issue, the young man we heard speak was very specific in his concerns, including those of black people. Listening to you speak, I heard multicultural spoken, but nothing regarding how you intend to specifically target diversity to include black people, specifically without evasion of topic.
While our Doris inclusion efforts are broad in scope, we take time to understand the specific needs, experiences of multiple groups, including African Americans and translate this into very specific programs to support our employees internally and specific programs to serve our consumers externally. The representation disclosures we share on our website includes specific measures of African American, Hispanic, Asian Americans and Pacific Islanders, Native Americans among others. And our community support as for some time included efforts targeted addressing the issues of race, including establishment of a Take on Race Fund, which you can learn many specifics if you go to www.pg.com/ takeonrace, then you get to a whole list of very specific things we are doing. We are using our voice in advertising. You've seen the films.
We are working with all those our suppliers. We're one of the $1,000,000,000 members of our diversity roundtable. We also are working to make sure those we hire to do films, we have African American representation in front and behind the camera. There's many actions we're taking and without taking a lot of time today, I'd encourage you to look at png.com/takeonrace. And you'll find very specific things we're doing in our Take on Race campaign that's specifically to address your question.
Next question?
Yes. The next question is, why don't you advertise to conservatives?
We advertise to all consumers. Procter and Gamble is one of the largest advertisers in the world. So I'm not sure where we believe we don't advertise to conservatives. Fact, 5,000,000,000 consumers roughly this year will buy a P and G product. More than the 5,000,000,000 we hear about it in the many, many different ways we try to reach consumers to help them become aware of our products and to understand the benefits that we offer.
And we want to respectively communicate when and where people are receptive to the message in all forms of media and all markets in which we participate. And we try to do it in an apolitical way, in a way that understands and serves consumers. So there's no effort at all to try to not target any one group. In fact, it's in our own best interest to try to communicate to all the consumers that would have an interest in any of the brands or categories in which we participate. And we're working very hard to do just that in a respectful way.
Next question?
Yes. I was concerned when I received a request to purchase my P and a company, Mason Bell LLC. Their correspondence looked as if it was sanctioned by P and G and I was encouraged to sell them. Was this a scam to procure my stock as they could ensure a certain person on the board? What can a regular stockholder do to ensure correspondence comes from P&G?
Very good. I'm glad you asked. I'm going to ask Debbie Majoris to provide some perspective on this because this may be helpful to everybody. Debbie, can you help with that?
Sure. To take the last part of the question first, absolutely, if you are ever concerned about whether a mailing actually comes from P and G, you should contact our shareholder office and we can confirm that for you. We did issue a press release to caution our shareholders about this tender offer for Mason Bell. These offers actually are allowed by the SEC, though the SEC has cautioned shareholders about them. It was legitimate, but the offer was at a price below the current market price of P&G Shares, which is why we sent out the press release.
So again, in the future, if you are concerned, please do contact us and we can let you know whether it's something that we actually sent you.
John?
Yes. Our next question comes from the telephone line.
Your next question comes from Frank Kern. Please go ahead.
Yes. Hello. In Mr. Taylor's prerecorded state of the business presentation, he mentioned a number of possible risks to achieving corporate goals in the future. I'd like a little more information on what you view as the most serious threats to our achieving our goals.
It's a big question to answer in a few minutes, but I'll give you at least a little bit of perspective. And we tried to outline some of those in a number of the different materials that we provide investors because it's important that you recognize we do compete in a dynamic marketplace. I've had to step back and say what are the most significant ones. It's ensuring anything that affects consumers' ability to participate in the economy is a huge one. So obviously, the economic environment that consumers experience will have a big impact.
Having said that, I can say P and G tends to fare well in all economies in terms of whether the economy is growing or in difficult times because of the fact that our brands are trusted. Other areas that I think continue to are paying a risk are things like competitive actions. We work very hard to make sure our innovation stays ahead of our competitors. But we also have high respect and recognize that there are many competitors, both existing competitors that you know of, but also startups that are coming after the consumers that we serve. It's one of the reasons why the strategy that we've articulated on superiority and using the concept of constructive disruption to continue to challenge ourselves to invent the future is critical.
Because if we do not stay ahead of other companies and provide consumers truly superior products that provide value to them, then we'll be at risk. And certainly, if you look over time, go back and look at the S and P 500 50 years ago and today, and you'll see many, probably most of the companies don't exist today. Procter and Gamble has been around for over 183 years because we put the consumer at the heart. The biggest risk is if we ever lose track of the consumer because as long as we have the consumer at the heart of everything we do and we innovate in ways to serve him or her better than any of the competitors and we have our systems such that we continue to stay in touch both quantitative data and qualitatively on the needs of the consumers, then we're well informed and we can bring again the considerable capabilities we have in our company. We have great respect for the environment in which we operate today, and we know whether it's the pandemic, whether it's potential recessions, whether it's foreign exchange in some of the markets or anything that disrupts consumers, all those are risks we face.
Having said it, the greatest comfort I can give you is the fact that we are very, very committed to be in the company that better serves the consumers in each of the categories in which we compete, and we're very committed to making sure the brands stand for both superior product performance and communicate in a respectful way that the consumers will feel that they can trust that brand to deliver each and every time. And my hope is you've seen that play out in the marketplace the last several years in a world that's frankly been as challenging as I can remember. You think about what we've gone through in the last few years and yet the company you've invested in is continuing to make progress. And I give the credit to the 99,000 P and G people that are extraordinarily committed to Procter's purpose, values and principles on serving consumers, and they've stepped up in the face of any challenge, be it pandemic, be there any kind of natural disaster to do the right things, keep each other safe, make, pack and ship the products and the brands consumers trust and love and need and take care of their communities.
And so I could give you the litany, you've read them before of the risk. The ones that I think are front and center is be the best at serving consumers with superior brands, very performing products and packages. Thank you for the question and we always stay centered on making sure we serve consumers. Because doing that well, the best insurance, frankly, all of our shareholders and stakeholders have that P and G will be able to continue to thrive for decades ahead, which is certainly our aspiration.
Thank you very much.
Yes, next question is, what is the name of the P and G bug product?
We launched a brand called Xevo. Xevo is a natural insecticide that comes in several forms. It's in the U. S, you'll find it in a couple of different stores and it's off to a very good start. Consumers love the combination of benefits it offers.
And certainly if you haven't tried it, I'd recommend you do try it. It's a great brand. But Zevo, Zevo, for those that are interested.
David, the next question is, P and G has an incredibly strong successful yet somewhat insular culture. How is the company looking to secure and diversify talent from outside the organization at executive levels?
First, P and G works with just a wide range of stakeholders to ensure that we're constantly stay in touch with consumers and what's happening outside our company. We have worked very hard and been very public on addressing some of the concerns and insularity by making sure that we stay in touch with consumers, work with our customers, work with our suppliers, stay in touch with leading universities and work frankly with many outside companies. All of those are evidence that P and G can continue to reinvent its culture to make sure that we're in touch and able to be appropriately aggressive on serving consumers. Now in addition to that, we have selectively brought in external talent where we thought it would accelerate our progress. Think if you look at the results the last few years that you can see the combination of selective external talent along with a heavy investment in the people that we have makes a huge difference.
We believe that great diversity of thought, skills and experiences is what is needed and we have it in our 99,000 people. The challenge is to activate them, to create an environment that unleashes their capability, that recognizes the differences in opportunity to contribute at a higher level. And an interesting fact here, in our senior leadership, the top 200 officers of our company, almost 60% of them are from outside the United States, which reflects about 60% of our sales are outside the United States. We have a diverse pool of talent that is very outward looking, staying in touch with consumers and stakeholders. And I think the evidence would say that's working right now.
We also have one of the strongest internal development systems that ensure people get the skills and abilities to be ready for tomorrow's challenges. And evidence of that is not only the progress the company has made, but also if you look at people that have P and G in their background, you can look across the competitive set in our company as well as industry broadly and you'll see many, many P and G people. And to me, it's a testament to the investment we make in developing talent. The greatest insurance you have is the 99,000 people that are doing a great job today, and to me, they're striving every day to be their best tomorrow, working to sustain excellence and balanced top and bottom line growth to create value for all of our stakeholders. One more question?
Yes. To conclude, we've received several shareholder comments expressing thanks for P&G's continued commitment to the payment of dividends and they'd like to make that known to you and the leadership team. That concludes the time we have for questions and comments.
Very good. Thank you. This completes today's meeting. I want to again express my appreciation to all of you for your confidence and support. I want to thank so many of you who have been long term shareholders of P&G.
Thank you very much. This concludes our meeting.