Whole Foods Investor Calls for Mackey's Removal as Chairman

Posted by: Diane Brady on July 25

A major shareholder group in Whole Foods Market, CtW Investment Group, sent a letter to the chain’s board today to ask that Mackey step down as chairman.

As Michael Garland, CtW’s Director, Value Strategies, tells me: “We believe more aggressive steps may be required with regard to Mr. Mackey’s future with the company, but we’re willing to wait until the findings of the special committee.” The first step, he adds, is for “the board to name a strong independent board chair to replace him.”

Whole Foods already announced a special committee to investigate Mackey’s anonymous postings on Internet bulletin boards. This latest push has an undertone of possibly setting the stage for Mackey to step down as CEO, too.

Clearly, CtW is disgruntled by the whole thing. In his note, Executive Director William Patterson says, “In our view, Mr. Mackey’s apparent efforts to anonymously influence the share prices of the two companies were inappropriate, unethical and quite possibly illegal. To the extent that he may have sought to drive down the Wild Oats share price to reduce the cost of an acquisition by Whole Foods, the implications appear especially serious.”

Patterson goes on to draw a correlation between Mackey’s posts and Wild Oats’ share price swings, including a comment in which Mackey writes he “may short [Wild Oats] in another year if nothing fundamentally changes.” And he questions how much time Mackey was spending on company computers during work hours to make the 1,394 posts, deducing that some items took as long as 49 minutes to write and as many as 17 different comments were posted some days.

CtW works with union pension funds that own more than 900,000 Whole Foods shares and control another 6 million through the public pension funds of its members.

You might ask why Patterson felt a need to make his note public. Says Garland: “Mackey’s credibility is in question. The special committee is an insufficient step.” In his view, getting Mackey out as chairman will at least reinforce the independence of any investigation and “will send a strong signal to the SEC and shareholders.”

TrackBack URL for this entry:http://blogs.businessweek.com/mt/mt-tb.cgi/

Reader Comments

Eric

July 25, 2007 04:35 PM

I concur.

Thomas

July 26, 2007 08:29 AM

I don't. Even though I reject what John did, he built the company and it would be a sad day in corporate America if we'd rely on fickleness to make our hiring/firing decisions.

Thomas

Another Thomas

July 26, 2007 01:19 PM

Wouldn't it be funny if the supportive "Thomas" is Mr. Mackey playing his games again. Probably not since he left out a compliment about his looks.

Thomas (not Mr. Mackey)

Peter

July 26, 2007 02:35 PM

I also concur. What if Mackey were betting on WF and WO stocks by buying WO and then putting a 'put' on WO? That is, betting that WO share would drop a certain amount, and then start posting to in order to influence the market.

Thomas, that wouldn't be fickle. It would be illegal. As a former subordinate of Mackey, he must go. And not just him, but also WO's CEO Mays. Don't think Mays didn't know about this??

Thomas (the original one)

July 26, 2007 02:49 PM

LOL. No, I'm not John Mackey. If I was I'd be as ignorant of my predicament as the one who's still pushing Iraq. See my previous posts and you'll see I'm not exactly "supportive." Although I do find he has great hair. :-)

Thomas (not Mr. Mackey either)

Bug Eye

July 27, 2007 03:03 PM

I think Mackey should recognize that WF's growth has out paced his own and step down all on his own. We need a new captain at the helm.

Add to this whole thing the buzz about WF not giving full benefits for domestic partners come 2008 and one can't help but think that this ship's just veering wildly off course.

sorro

July 27, 2007 08:48 PM

yeah, but what he did was wrong and illegal. i think when you consider the possibility of what other things he might have done behind the scene is in question now. just because of he lead the way to build this company that doesnt mean he has to stay forever.
i am saying this as a shareholder of the company.

Green Lady

July 28, 2007 07:46 PM

Oh please wake up. Does no one else see the union hand in this? Mr. Mackey has always been staunchly pro worker and anti union. A coincidence this was brought by CtW?

Not 4 U

August 2, 2007 09:05 AM

Green Lady...do you realize the assualt on unions Mackey has issued over the years. It's one thing to not like unions, but another to call them 'herpes' on a public scale. If the unions do have a small part (and I believe it would be small), I'm glad. Mackey has a giant ego and it was only a matter of time before it crumbled.

And, Bug Eye, I am with you about WFM going off course. The benefits have been vanishing slowly now for three years. By 2008, I believe many people will find themselves without the coverage they really need.

And for the Thomas who doesn't agree on Mackey being forced to step down. That Mackey started the company and doesn't deserve to be fired for fickle reasons...well, he and his managers have fired many, many people for much less. Not only do they fire people, they contest each and every unemployment case. Fair or not. So, karma is a bitch.

Plus, Mackey did not start the company by himself. There were a number of founders. So, I don't have an idol view of him. He did many unethical things and needs to be punished.

HWF

March 31, 2008 08:18 AM

I feel John Mackey is Quantum Light years ahead in multi-dimensional thinking and is playing a significant role on this Earth plane. He's one of my heroes. Spiral Dynamics, Wow! A conscious Creator filled with compassion.


Post a comment

 

About

How can you manage smarter? BusinessWeek writers Diane Brady, Michelle Conlin, Nanette Byrnes and Jena McGregor synthesize insights from the brightest business thinkers, critique the latest management trends, and comment on leaders in the news.

BW Mall - Sponsored Links

Buy a link now!