Wednesday, December 7, 2022

Carl Icahn starts proxy fight with McDonald’s over pigs’ welfare

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But McDonald’s has but to make good on the promise. The firm mentioned Sunday that Icahn had nominated two folks for election to its board in an obvious begin to a proxy battle with the fast-food big, a confrontational try to gather shareholder proxy votes to switch board members, gaining sufficient energy inside the firm to alter its insurance policies.

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In current years, activist traders have used the tactic to not solely search larger income, but additionally align corporations with their moral or political stances. A gaggle of traders led by a hedge fund known as Engine No. 1 efficiently received a 3rd seat on the board of ExxonMobil in June, pushing the oil big on its positions concerning local weather change.

Icahn nominated Leslie Samuelrich, president of Green Century Capital Management, which “leverages its clout as a shareholder to protect our water, air and land,” and Maisie Ganzler, chief technique and model officer at Bon Appétit Management Company, which describes itself as “food service for a sustainable future.”

McDonald’s mentioned Icahn’s “stated focus in making this nomination relates to a narrow issue regarding the Company’s pork commitment,” referring to the gestation stalls. A senior provide chain govt at McDonald’s mentioned in 2012 that the crates have been “not a sustainable production system for the future” and that “there are alternatives that we think are better for the welfare of sows.”

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In a 2017 “Animal Health & Welfare Update,” McDonald’s mentioned that by the top of 2022, it might supply its U.S. pork solely from suppliers that don’t use the stalls for housing pregnant pigs.

But McDonald’s mentioned Sunday that it now expects that solely 85 to 90 p.c of its U.S. pork will likely be sourced from pigs not housed within the crates throughout being pregnant by the top of the yr, citing “industry-wide challenges for farmers and producers,” such because the coronavirus pandemic and illness outbreaks. Its dedication to completely use pork within the United States that was sourced from “sows housed in groups during pregnancy” is now anticipated by the top of 2024, McDonald’s mentioned.

Icahn had raised considerations over the scope of McDonald’s 2012 dedication, telling the Wall Street Journal that the corporate’s suppliers transfer pigs out of the crates solely after it’s confirmed that they’re pregnant, at which level the sows could possibly be greater than 1 / 4 into their 16-week pregnancies. Icahn had anticipated McDonald’s to ditch gestation crates fully, he mentioned.

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McDonald’s didn’t instantly reply to a request for remark late Sunday concerning Icahn’s considerations. The firm mentioned in its assertion that Icahn had “asked for new commitments,” together with a requirement that McDonald’s suppliers within the United States transfer to “crate-free” pork. McDonald’s mentioned that “the current pork supply in the U.S. would make this type of commitment impossible,” and that it “would harm the Company’s shared pursuit of providing high quality products at accessible prices.”

According to the Humane Society of the United States, gestation crates are “so restrictive that the pigs cannot turn around.” Pigs relegated to the stalls “suffer a number of significant welfare problems, including elevated risk of urinary tract infections, weakened bones, overgrown hooves” and different points, it mentioned in a 2013 report. Gestation crates have been banned in no less than 10 states, together with California, Colorado and Florida, in line with Compassion in World Farming.

Icahn informed the Journal that “animals are one of the things I feel really emotional about,” including that he realized of the crates from a Humane Society govt whom he had hosted for dinner at his penthouse in New York City.

Icahn, who’s the topic of a brand new HBO documentary, is price greater than $23 billion, in line with the accuratenewsinfo Billionaires Index. His stake in McDonald’s is small: The firm mentioned he held about 200 shares, although he informed the Journal that he held 100, which might be equal to a roughly $25,000 stake within the $187 billion firm.

In its assertion Sunday, McDonald’s questioned why Icahn hadn’t used his majority stake within the pork and poultry packaging provider Viskase to power related commitments on that firm. Representatives for Icahn didn’t instantly reply to a request for remark concerning the McDonald’s assertion or about the variety of the corporate’s shares he at present held.

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