Not all protests are ineffective. Just ask Whole Foods CEO, John Mackey (or ask Glenn Obama-is-a-racist Beck how he's doing lately).
The bad publicity Mackey drew Whole Foods into unnecessarily, has gotten under the skin of a Whole Foods Investor group. What will come of this call for Mackey's replacement, only time will tell, but Mackey's freedom of speech has drawn buyers, and now CtW Investment Group's, freedom of speech in return.
From PR Newswire (via DKos 'Hopeful Skeptic):
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. Mackey's editorial opposing President Obama's 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. Mackey's 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 Company's brand reputation caused by Mr. Mackey's indiscretion. He has become a liability and the board should begin the process of identifying a suitable replacement."
The text of CtW's letter follows:
Events of the past week establish yet again that John Mackey's 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. Mackey's 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. Mackey's 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. Mackey's ill-advised Yahoo! Finance postings. As a result of the board's inaction, Mr. Mackey's indiscretion has continued to place our Company's 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 publicly available.