Whole Foods CEO to give up chairman title after activist shareholder calls for his replacement
The chief executive of organic supermarket chain Whole Foods Market Inc. is giving up his title of chairman, following years of petitioning by an activist shareholder to separate the two roles.
Co-founder and CEO John Mackey is voluntarily giving up his chairmanship, a position he's held since the Austin, Texas, company's inception in 1978, according to a Thursday filing with the Securities and Exchange Commission. Mackey will remain on the board.
Whole Foods said lead director John Elstrott will become chairman. His current position will be discontinued.
At Whole Foods' annual shareholders meeting in March, CtW Investment Group, a shareholder activist group that works with union pension funds, unsuccessfully proposed that the CEO and chairman roles be separated. The grocer said it has been receiving these proposals for three years.
But in August, CtW raised the stakes by calling for the CEO's removal. The activist group said an editorial by Mackey opposing President Obama's health care plan damaged the company's reputation, especially among its left-leaning customers.
The group said 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."
CtW said Mackey has become a "liability" because of his "indiscretion."
The shareholder activist has wanted Mackey to relinquish his chairman title because it believes an independent chairman could improve the company's stock price performance. CtW noted the stock had fallen 30 percent over the past five years ending Sept. 30, 2008 compared with a 14 percent gain in the S&P 500 Index.
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