Wednesday, August 01, 2007

CTW Investment Group Calls on Vegan A-Hole to Resign

Group Urges Whole Foods' Mackey
To Step Down as Firm's Chairman
July 26, 2007

Wall Street Journal

CHICAGO -- An investment group affiliated with union pension funds said John Mackey, the embattled chief executive of Whole Foods Market Inc., should step down as chairman of the natural-foods giant in the wake of revelations that he posted anonymous comments on Internet stock-market forums.

CtW Investment Group, a branch of Change to Win, a coalition of labor unions, wrote a letter Wednesday to John B. Elstrott Jr., the lead independent director at Whole Foods, urging the board to immediately name an independent chairman "who can quickly establish credibility with regulatory authorities and shareholders."

Union pension funds affiliated with CtW own some 900,000 shares of Whole Foods, according to the letter. That's less than 1% of the Austin, Texas-based company's outstanding shares.

Whole Foods' board said last week it had formed a special committee to launch an internal investigation into Mr. Mackey's online statements. Over a roughly eight-year period, Mackey used a pseudonym, "Rahodeb," on Yahoo Finance message boards. He touted Whole Foods, derided his rivals and got into lengthy debates with other users.

The Securities and Exchange Commission has begun an informal probe to determine if the comments violated the law.

The investment group said even if Mr. Mackey didn't violate the law or the company's code of conduct, his "poor judgment has already damaged his credibility" and jeopardized the company's proposed purchase of rival Wild Oats Markets Inc. "With Whole Foods under mounting legal and regulatory scrutiny, its share price down 37% in two years, and Mackey's leadership in question," the group wrote, "we do not believe the creation of a special committee alone is sufficient to restore investor and regulatory confidence in the company and its management."

Mr. Mackey's postings as Rahodeb surfaced as part of a lawsuit by the Federal Trade Commission aimed at blocking the $565 million acquisition of Wild Oats. The government contends the deal would reduce competition and raise prices for consumers.

For years, labor unions have been at odds with Mr. Mackey, who has opposed efforts to organize workers at Whole Foods stores and criticized the broader labor movement.

A Whole Foods spokeswoman declined to comment.

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