Skip to comments.CtW Investment Group Calls on Whole Foods Board to Remove Chair and CEO John Mackey
Posted on 08/26/2009 5:22:29 PM PDT by lqcincinnatus
CtW Investment Group Calls on Whole Foods Board to Remove Chair and CEO John Mackey FOR IMMEDIATE RELEASE Tuesday, August 25, 2009
CONTACT: Per Olstad, (202) 721-6027
The CtW Investment Group called on the Whole Foods Market (NYSE:WFMI) board to remove CEO John Mackey as Chairman and to begin the process of naming a new CEO in a letter to Whole Foods lead independent director, Dr. John Elstrott, yesterday afternoon. Citing the risk to Whole Foods brand reputation caused by Mr. Mackeys editorial opposing President Obamas proposed healthcare reform, CtW urged the board to take immediate action to prevent continued damage in the face of a quickly-growing boycott by Whole Foods progressive customer base.
Mr. Mackey attempted to capitalize on the brand reputation of Whole Foods to champion his personal political views, but has instead deeply offended a key segment of Whole Foods consumer base, said CtW Investment Group Executive Director Bill Patterson. This is not the first time Mr. Mackeys unsanctioned communications have damaged Whole Foods image with consumers and investors. At a time when shareholders are looking for Whole Foods management to focus on improving operations in an uncertain economy, we can not afford the risk to our Companys brand reputation caused by Mr. Mackeys indiscretion. He has become a liability and the board should begin the process of identifying a suitable replacement.
For comment, please contact Per Olstad at (202) 721-6027. For more information regarding the CtW Investment Group please go to www.ctwinvestmentgroup.com. The text of CtWs letter follows:
Dr. John B. Elstrott Lead Independent Director c/o Director of Internal Audit Whole Foods Market 550 Bowie Street, Austin, TX 78703
Dear Dr. Elstrott:
Events of the past week establish yet again that John Mackeys lack of personal discipline makes him a liability for Whole Foods Market, Inc. Despite past indications that the board needed to exercise independent oversight of Mr. Mackey and supervise his external communications closely most notably his postings on the Yahoo! Finance bulletin board, which led to an SEC inquiry you and your fellow directors failed to take meaningful action to prevent Mr. Mackeys uncompensated brand and reputational risk to our Company.
The board must now recognize that managing reputational risk is central to building shareholder value at Whole Foods and act accordingly. Replacing Mr. Mackey as Chairman and CEO is the critical first step in this process. We first raised questions regarding Mr. Mackeys leadership in a July 25, 2007 letter to you in which we called on the board to immediately remove him as Chairman and determine what additional steps were warranted in response to Mr. Mackeys ill-advised Yahoo! Finance postings. As a result of the boards inaction, Mr. Mackeys indiscretion has continued to place our Companys brand reputation at risk. We therefore call on the board to immediately undertake the following:
Immediately remove Mr. Mackey as Chairman of the Board. Establish and disclose to shareholders a clear succession plan so that he can be removed expeditiously from his position as CEO as soon as feasible; the plan should detail how the board intends to ensure that CEO succession is a routine topic of discussion by the board, there is an emphasis on development of internal candidates while remaining open to external candidates, all board members are given exposure to internal candidates, and that there is both a long-term perspective to address expected CEO transition periods and a short-term perspective to address crisis management in the event of death, disability, or an untimely departure of the CEO. Quickly implement a board policy and process for supervision of executive communications in order to ensure that Mr. Mackey can cause no further damage to Whole Foods brand and reputation in his remaining time with the company. Commit to issuing a thorough and exacting annual review of all political or partisan uses of corporate resources, including a justification of any such expenditure, and make this review publically available.
The CtW Investment Group works with pension funds sponsored by unions affiliated with Change to Win, a federation of unions representing nearly 6 million members, to enhance long-term shareholder returns through active ownership. These funds are substantial long-term Whole Foods shareholders.
Whole Foods Unique Strength and Vulnerability
Whole Foods is the leading national provider of natural and organic foods, and as such has benefitted from growing environmental and health consciousness among affluent urban consumers. However, this leading position makes Whole Foods uniquely vulnerable to disaffection from these core customers if they perceive that the company is not managed in a manner consistent with their values. Following the publication of Mr. Mackeys op-ed piece opposing President Obamas health care reform proposal on August 16, 2009, Whole Foods customers have reacted with outrage: at least 26,000 have now joined a Whole Foods Boycott page on Facebook. Numerous commentators have noted that a boycott of Whole Foods by politically progressive customers could cause a significant loss of shareholder value. We note with apprehension that the Companys letter of apology to customers the necessity of which reinforces our concerns appears to have done nothing to soften the backlash against Mr. Mackey, and unfortunately, Whole Foods itself.
While we respect Mr. Mackeys First Amendment right to express his political views, as he did for instance in noting that the Constitution contains no right to health care, we hasten to point out that neither the First Amendment nor any other provision of the Constitution give Mr. Mackey or any other CEO the right to retain their position regardless of behavior or performance. Moreover, Mr. Mackeys article was not a citizens letter to the editor, but a lengthy op-ed that explicitly tied him to Whole Foods by identifying him as the CEO. Given Whole Foods unique exposure to a key segment of the customer base, Mr. Mackeys decision to express his views in such a public way, and on an issue of such enormous moment, seems ill-advised at best.
As noted above, we first called on the board to remove Mr. Mackey as chairman and to evaluate his suitability as director and CEO in a letter to you over two years ago. In that letter, we specifically called the board to investigate whether Mr. Mackeys Yahoo! Finance postings violated Whole Foods code of conduct and to establish clear disciplinary policies for unsanctioned executive communications. Unfortunately, you failed to take any meaningful action, and now Whole Foods shareholders again face potentially damaging fallout from unmanaged and uncompensated reputational risk.
Similar inaction now is unacceptable. The board must act immediately to address the burgeoning crisis caused by Mr. Mackeys undisciplined behavior or shareholders will have little option but to conclude that you and your fellow directors are unable or unwilling to hold management accountable.
William Patterson Director
CC: Whole Foods Market Board of Directors
# # #
** NOTE: For additional information or comment please contact Per Olstad at (202) 721-6027 or firstname.lastname@example.org. **
It's only a block more to QFC.
Give Per Olstad a call at (202) 721-6027 or email him at email@example.com. Let him and his union bosses know what you think about the attempted blackmail to force him out and the employees to be unionized. Thank God Texas is a right to work state.
The radical left plays for keeps people.
We haven’t even started yet.
Mr. Patterson, eat my shorts.
The brownshirts are coming out of the woodwork. If we are to preserve our Democracy, you must obey Obama. No dissent will be tolerated.
Maximizing shareholder value is no way to run a company. It leads to poor decision making with short-term focus that destroys the company in the long term.
Yes! Can his butt!
I absolutely love it when liberals eat their own.
The penalty for disagreement is always death with them.
Lockstep or Die.
“Looks like meat’s back on the menu, boys!”
This country is now a third world banana republic with a fascist government and dictator. That good old First Amendment is long gone as is the rest of our Constitution and Bill of Rights. We did it comrades! We are now Communists! We should all fart proudly!
This is very unusual. It isn’t like health food nuts to become sanctimonious pricks.
Same here. First rule of holes: When you find yourself in a hole, stop digging! Whatver PR problem they have now will become much worse if they fire their CEO.
Hey, WF board - Fox Uniform. Good for this guy for speaking the truth without fear.
Is CtW a leftist organization? You know why I never fly on airplanes? Because they ALL have a LEFT WING!
“Whole Foods Unique Strength and Vulnerability
Whole Foods is the leading national provider of natural and organic foods, and as such has benefitted from growing environmental and health consciousness among affluent urban consumers. However, this leading position makes Whole Foods uniquely vulnerable to disaffection from these core customers if they perceive that the company is not managed in a manner consistent with their values.”
Anyone, who thinks that Whole Foods is a great corporation and deserves our business has a serious problem with reality.
...CtW Investment Group is a union pension firm.
I see nothing but sanctimonious pricks at whole foods. Thats why the parking lot is full of Volvo and Audis.
They really are Nazis, aren’t they?
You cannot be serious.
Geez, and what exactly was Mr. Mackey’s “crime”? He listed out opinions of what should be done about healthcare. He didn’t swallow the Obama line, he has his own ideas to add to the debate. If I recall correctly, he was writing from the point of view of a business owner who has provided healthcare to employees, and talked about changes that could be made in our system.
so for this, the liberal radical types want to fire him????
This is reminding me of the termination of Larry Summers as president of Harvard University. Remember that incident, in which Larry Summers talked about the small numbers of women in certain science fields. He said that we could explore reasons why relatively few women enter certain fields. HE DIDN’T SAY THAT WOMEN SHOULD BE KEPT OUT OF THESE FIELDS. HE SAID THAT WE COULD EXPLORE THE REASONS. But for even saying anything about that subject, Mr. Summers was forced out. And he’s a good liberal; he worked in the Clinton administration and now works for Obama.
Yep, liberals can eat their own.
This whole incident makes me more likely to go to Whole Foods.
Far left fascists appear to be much more demented than their far right counterparts. WT...the man wrote a letter... Those battery operated cars these nuts drive must be leaking something into their brains.
And Whole Foods can kiss my $$$$$$ goodbye!!!
“While we respect Mr. Mackeys First Amendment right”
No you don’t, you want to destroy his career, you stupid pricks!
A simple way to show support:
Go to Whole Foods, buy a decent amount of goods. Write Mr. Mackey a nice letter telling him that you went there to support him, and also send him the receipt.
If enough do that, he’ll get the message and hold the line.
Sorry. I forgot that these were liberals that we were talking about.
Whole Foods Market Inc (WFMI)
29.52 Up+0.30 +1.03%
Open: 29.14 High: 29.88 Low: 28.83
Previous Close: 29.22 Volume: 3,212,355
After Hours: 29.52 unch Vol. 90,899
Stock has been going up since Mr. Mackeys comment and they want to get rid of him...What’s up with that? Let them all go to Kennedy!
The few protesters at Whole Foods are overwhelmed by the crowds shopping there every day. If the leftist idiots purge Mackey, they may install a rabid ideologue who will ruin the business.
Political correctness is running amock.
Fascism is FUN. Let’s all bow to the Messiah and do not speaketh one’s differing opinion of the One.
Does whole foods honor food stamps? If they don’t now and they get rid of Mackey, they better start because that is the market they will have.
However I may be over that way sometime in the next month and I think I will do so.
I hope I don't catch cooties. :)
Paging Glenn Beck...
I don’t shop there, but I’ll make it a point to never purchase anything from them, ever.
What part of mindless obedience to the group don't you understand?
Sheesh, we try and try with you, but you keep coming up with your own clear, rational, fair, insightful, decent thoughts.
Something's gotta be done about you. I'm calling Rahm.
And you can forget about any further invitations to the weekly meetings.
Reminds me of that swimming pool in PA that canceled the membership of a black daycare center (as well as other groups due to crowding). The guy was an Obama supporter but the left ate him alive-LOL
"We havent even started yet."
You are correct.
Everyone Must Do Something Everyday.
How much of Whole Foods does CtW own? If any?
Sounds like another attempt by the unions to muscle people around, to me. I’m going shopping at Whole Foods tomorrow.
SEIU Capital Stewardship Program offers corporate governance consulting and fund management services to private and public pension funds. It provides investment, shareholder activism, and fiduciary advisory services. SEIU Capital Stewardship Program, formerly known as CtW Investment Group, was founded in 2006 and is based in Washington, District of Columbia.
Which is it?
Uh, I think you are way off on that. Maximizing shareholder value requires also looking at the long term value, noting the present day value of decisions that affect the long term. The company should go with what makes the most sense over time, and that is how shareholder value is maximized.
I can't help wondering how "socialized medicine" helps these unions. Wouldn't the union members be worse off, compared to their current situation?
Oh, HELL no. They do that, they’re really gonna make me angry...
“If the leftist idiots purge Mackey, they may install a rabid ideologue who will ruin the business.”
That is what the leftist idiots are up to, and they will indeed destroy the business.
LOL! Mackey has a million plus shares? He should quit and cash them all in tomorrow. Look out below, Whole Foods, LOL!
Love it. :)
Who We Are
Founded in February 2006, the CtW Investment Group works with pension funds sponsored by unions affiliated with Change to Win, a federation of unions representing nearly 6 million members, to enhance long-term shareholder returns through active ownership. Members of CtW affiliates participate in Taft-Hartley plans with an estimated $217 billion in assets.
Whole Foods customers have reacted with outrage: at least 26,000 have now joined a Whole Foods Boycott page on Facebook.
I would suggest joining this group on Facebook! There are now 3,500 members - let’s see if we can’t counter the other group!!
In any case, it’s unbelievable to see what one op-ed piece, that really very sensible can do to the leftist clowns!
Doesn’t seem to be hurting them a bit!