Procter & Gamble has given its new CEO, Shailesh Jejurikar, a powerful performance incentive to improve the company’s results: options on more than 130,000 company stock shares.
The consumer product giant’s new boss currently owns a $14.9 million stake in the company, which makes everything from Tide detergent, Pampers diapers and Gillette razors. But between more than $5 million worth of new stock grants and options set to vest, his net worth stands to jump higher than $28 million, according to company disclosures to the U.S. Securities and Exchange Commission.
While Jejurikar is one of the largest insider investors, P&G’s proxy reveals that all 27 top executives and board members collectively own less than 0.2% of the company’s more than $330 billion outstanding shares.
Jejurikar has the opportunity to increase the value of his stake, but his latest stock options are “underwater” or worthless as P&G’s stock has languished since the options were awarded in mid-September and early October. The shares won’t have any value until P&G stock climbs above $153.18. On Jan. 12, P&G stock closed at $143.46 per share.
Paying top executives in stock and options is a standard corporate practice to align their financial motives with shareholders.
Named the next P&G CEO in July
Jejurikar, 59, was tapped as the new CEO on July 28, replacing Jon Moeller, who led the company since 2021. He has long been seen as the company’s next leader, having been named its No. 2 executive the same day Moeller was selected to take the reins.
Before that he served as the CEO of P&G’s Global Fabric and Home Care from 2019 to 2021, overseeing many of P&G’s most iconic brands: Tide, Ariel, Downy, Gain, Febreze and Swiffer, which represent a third of the company’s sales and profit.
Jejurikar’s ascent comes as P&G aims to cut back
Company disclosures to the government said Jejurikar would be paid an annual salary of $1.6 million and receive additional annual incentive pay worth as much as $3.2 million. The company’s board has also approved a long-term incentive award valued at $14 million for Jejurikar.
Under Jejurikar, P&G is seeking to boost sales by investing in improved products funded by cutting jobs. Last summer, P&G announced it would cut 7,000 office jobs in a restructuring move amid slowing sales. In July, the company reported its most sluggish sales growth in seven years.