From Eleanor Bloxham:
Whole Foods investor [Jim] McRitchie has sent a proposal to the grocery chain for shareholders to vote on next year. It is designed to revise Whole Foods’ proxy access bylaw to “meet best practices according to investors.” The proposal would give investors the right to nominate two directors or a quarter of the board, whichever is greater, and place “no limitations on the number of shareholders that can aggregate their shares to achieve the 3% Required Ownership Percentage” to put forward nominations. The proposal also calls for no limits on how often candidates can be proposed and no limits on any compensation arrangements the candidates may have with shareholders.
The Whole Foods proposal is just one example of a new series that will start to come on company ballots next year to improve on the proxy access requirements now on the books. In August, the Council of Institutional Investors issued a paper on the common fixes needed to some of the current proxy access measures adopted by companies. “We will see more of these in a second wave … even though the first wave has just begun,” McRitchie wrote me in an email.
But for Whole Foods shareholders, there’s more than ballot access to be concerned about. The company’s share price has fallen by 46% over the past seven months. And the company faces increasing competition, all while it’s trying to revamp its operations.
Employees and customers likely have their own concerns. Earlier this week, Whole Foods announced that it would be laying off workers. And last week, PETA (People for Ethical Treatment of Animals) sued the company for alleged violations in its five step animal welfare ranking system. “The entire audit process for Whole Foods’ animal welfare standards is a sham,” the lawsuit reads.
With shares tanking, competition rising, employee ranks dwindling, and customers (potentially) defecting, the new proxy access “update” at Whole Foods may have a shot.