Procter & Gamble Co. board members are dissatisfied withChief Executive Officer Robert McDonald's performance and arediscussing a possible leadership change, according to peoplefamiliar with the situation.

Some P&G directors are talking about contacting formerexecutives to potentially take the top job, said one of the people,who declined to be identified because the matter is private. JamesMcNerney, who is chairman of the board's compensation andleadership development committee, has told other members of theboard he is unhappy with McDonald's performance, especially afterthe company cut forecasts three times this year, another personsaid.

The board's discussions in part coincide with activist investorWilliam Ackman taking a stake in P&G. Ackman plans to press formanagement changes and is seeking more investors to join his push,the people said.

The moves increase pressure on McDonald, 59, who has been CEOfor about three years and came under fire from analysts earlierthis year when P&G lost market share to competitors. The stockhad fallen 8 percent this year through July 11, giving theCincinnati-based company a market value of about $168 billion. Theshares rose 0.6 percent to $64.06 at 7:27 a.m. in New York.

“This is a really good company with some serious problems,” saidAli Dibadj, an analyst at Sanford C. Bernstein & Co. in NewYork. He has recommended P&G consider a breakup if earningsdon't improve this year. “A lot of those problems have been drivenby management.”

Directors don't see a clear internal candidate to replaceMcDonald, one person said. A.G. Lafley preceded McDonald as CEO,while other former executives include Paul Polman, the CEO ofUnilever, who ran P&G's European business until 2006.

Paul Fox, a spokesman for P&G, declined to comment.McNerney, who is also the CEO of Boeing Co., wasn't available forcomment through his spokesman.

P&G, the maker of Tide laundry detergent and Duracellbatteries, most recently cut its profit forecast last month, citingcurrency fluctuations and rising commodity costs, even ascompetitors reaffirmed their projections. In February, McDonaldannounced a $10 billion cost-reduction plan that included 5,700 jobcuts.

'Smidgen Premature'

“If he has lost the confidence of the board, I'm sure they aregoing to make a change,” Janna Sampson, who helps manage about $2.9billion, including P&G shares, at OakBrook Investments inLisle, Illinois, said by telephone. “But it does seem a smidgenpremature. I'm not sure the problems are of the CEO's making. Hestarted in a tough economy, and it's not gotten much better.”

In response to Ackman buying a stake, P&G said that itwelcomes investment in the company.

“We are focused on creating shareholder value by executing onour plan to deliver top- and bottom-line growth through our $10billion cost savings program, renewing our focus on innovation,pricing initiatives and improved execution, and reallocatingresources to invest in the highest return opportunities,” P&G'sFox said in an e-mailed statement.

Ackman, who has lobbied for shakeups at companies includingTarget Corp. and Canadian Pacific Railway Ltd., said in an e-mailthat the P&G stake purchase is his largest initial investmentever.

The activist investor this year won an effort to remove CanadianPacific CEO Fred Green and replace him with Hunter Harrison. Ackmanalso pushed Fortune Brands Inc. to break up, and the company lastyear split into spirits maker Beam Inc. and a company that sellshome products such as faucets and locks. More than two years ago,he led a failed effort to get Target to sell its card unit anddivest its land holdings into a real-estate investment trust.

P&G's other shareholders include Berkshire Hathaway Inc.,led by billionaire Warren Buffett. The firm held a stake of about73.3 million shares, or 2.7 percent, as of March 31, according todata compiled by Bloomberg. That's down from 76.8 million at theend of 2011.

McDonald took over P&G's top job in July 2009 after servingas chief operating officer. A West Point graduate, McDonald rose tolead the company's Northeast Asia operations in 1999 after stintsin the Philippines and Japan. In 2001, he became president of theglobal fabric and home-care business. Three years later, he wasmade vice chairman for global operations.

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