Holiday Recap: Whole Foods Chairman Relinquishes Title and Other News

FILED DECEMBER 1, 2009

Dear Client:

We’re still technically on a hiatus but here’s a quick recap of stories that hit over the past week:

JOHN MACKEY GIVES UP CHAIRMAN TITLE, REMAINS CEO

Whole Food’s chief John Mackey has “voluntarily” given up his title of chairman, according to a December 24 Securities and Exchange Commission filing. He will continue as ceo and remain on the board, while lead director John Elstrott will assume the role of chairman. The news is rather surprising because John has held the dual role of chairman and ceo since the company was founded in 1978. So why the sudden change?

According to the filing, corporate activists repeatedly asked for the positions to be separated: “Whole Foods Market always has strived to maintain high corporate governance standards. In keeping with this goal, the Board added the Lead Director designation in 2000, and since that time, has shifted all of the responsibilities of the Chairman of the Board to the Lead Director. Despite this shift in responsibilities which has rendered the Chairman role to a mere title, the Company repeatedly has received proposals from corporate activists to separate the Chairman and CEO roles. To avoid unnecessary distraction and protect the Company’s corporate governance profile, Mr. Mackey believes giving up the Chairman title to be in the best interests of the Company and its stakeholders.”

CtW Investment Group, a shareholder activist group that works with union pension funds, has proposed the change for three years, said the company. Then in August the group asked that John Mackey be removed from the company after penning an editorial opposing President Obama’s health care plan. They claimed his article damaged the company’s reputation and that John had become a “‘liability’ because of his ‘indiscretion,’" according to the Associated Press. CtW also believes an independent chairman could help boost the company’s stock price performance.

SAM’S CLUB ADDS WINE AND SPIRITS TO ONLINE ORDERING SYSTEM

Sam’s announced last week that its adding its wine, spirits and beer department to its online order-ahead program titled “Click n’ Pull,” which also lets members submit product reviews. Click n’ Pull allows Sam’s Club members to order their beverage of choice online and then pick it up at the store the next day. Sam’s said it expects approximately 3,000 wine, beer and spirits orders online once the program is completed early next year.

WSJ CANCELS WINE COLUMN

It was reported today that WSJ has cancelled its celebrated wine column by married wine critics Dorothy Gaiter and John Brecher. Their last column was published Saturday. Click here for interesting thoughts on the news.


Until next year, Megan

“Never confuse movement with action.”
Ernest Hemingway

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