Billionaire investor Carl Icahn began his battle with McDonald’s in the usual way – buying a small stake in the company and then pushing his own candidates for its board. But what’s different this time is the issue – better treatment for the pigs whose meat goes into McDonald’s sausage patties and other pork products.
McDonald’s on Sunday confirmed that Mr Icahn, who it says owns 200 shares in the restaurant chain, had appointed two people to its board over the matter – in what will likely be the start of a bitter contest and particular.
Unlike the typical target of corporate agitators, McDonald’s has fared well, with its shares soaring more than 18% in the past 12 months to give it a market capitalization of $187 billion. And while Mr. Icahn’s stake in the company is small, activist investors for social causes have recently had successes on small stakes, such as Engine Capital’s victory on the board of Exxon Mobil l year on its climate strategy.
The two candidates for Mr. Icahn’s board of directors are Leslie Samuelrich and Maisie Ganzler, according to McDonald’s. Ms. Samuelrich is president of Green Century Capital Management, an investment fund focused on sustainable energy, according to her. LinkedIn profile. Ms Ganzler is director of strategy and brand at Bon Appétit Management Company, according to her LinkedIn Profile.
Mr. Icahn argues that McDonald’s has not fully delivered on its commitment to change the way it sources pork. In 2012, McDonald’s pledged to phase out the use of so-called gestation crates, the tiny stalls in which sows are housed during pregnancy. Animal rights activists have referred to the crates, known as sow stalls, as inhumane.
Mr. Icahn told the Wall Street Journal this month that the company’s hog producers only moved sows once they were four to six weeks into their 16-week pregnancies. He said his campaign was inspired by his daughter, a vegetarian animal lover.
A press secretary for Icahn Enterprises did not immediately respond to a request for comment.
“Sir. Icahn’s stated purpose in this nomination relates to a narrow issue regarding the company’s commitment to pork, which the Humane Society US has previously introduced through a shareholder proposal. said McDonald’s. said in a statement on Sunday. “This is an issue on which McDonald’s has been a leader.”
McDonald’s argues that Mr. Icahn’s demands are unreasonable given the current supply of pork in the United States. And he cited what he said were inconsistencies with Mr. Icahn’s other investments, pointing out his majority ownership at a packer and supplier of pork and poultry, Viskasethrough its holding company Icahn Enterprises.
“Sir. Icahn’s ownership provides him with unique exposure to industry-wide challenges and opportunities by stepping away from gestational crates,” McDonald’s said.
“As such, it should be noted that Mr. Icahn has not publicly called on Viskase to adopt commitments similar to McDonald’s 2012 commitment.”
McDonald’s supplies about 1% of all pork production in the United States, he said, and does not own any sows or produce or package pork in the country. By the end of this year, McDonald’s said it expects to source 85 to 90 percent of its U.S. pork from sows not housed in gestation crates during pregnancy. By the end of 2024, he said, he expects all of his U.S. pork to come from sows housed in groups during gestation.