John Chevedden helped me draft and defend a resolution at Whole Foods Markets that requests the Board to adopt a policy establishing an engagement process with proponents of shareowner proposals supported by a majority of the votes cast, excluding abstentions and broker non-votes, at any annual meeting. It seemed like a rather straight-forward and simple request to me.
If shareowners vote in favor of a proposal and the board doesn’t implement it, such as the simple majority-voting proposal which won our 57%-support at our 2009 annual meeting, Whole Foods would set up an independent board committee, schedule a telephone meeting with the proposal proponent, and would present the proposal with the committee’s recommendation to the full Board.
Well, I guess this type of proposal is a little new or maybe I’m viewed as a bomb-throwing radical by some for proposing that a company at least discuss a shareowner proposal with the proponent before deciding not to implement it after it is passed by a majority of votes cast. The proposal only got 39% of the vote.
Another simple-majority voting proposal this year from John Chevedden won 58% this year. Will they ignore it again?
The proposal for CEO succession planning from the Central Laborers’ Pension Fund fared worse, only got 30% of the vote. Even living on a diet of whole foods, Mackey won’t be forever. Isn’t it good to plan ahead?
In addition to passing a second simple-majority proposal, shareowners also approved a resolution from Amalgamated Bank’s LongView Funds would roll back a bylaw change that Whole Foods directors put in place a few months after the SEC closed an investigation into the online chat activities of John Mackey in April 2008. The proposal would permit sharewners to remove a director either “with or without cause.”
When they lowered their standards to with cause only, the board redefined “cause” narrowly as covering only a criminal indictment or a judicial finding that a director had breached his or her fiduciary duties to the Company or was not capable of performing a director’s responsibility.
I’m glad to see this proposal won 53% support. “We are pleased that investors have supported this call for the Board to reinstate fundamental shareholder rights,” said Scott Zdrazil, Director of Corporate Governance for Amalgamated Bank. “We encourage the Board of Whole Foods to be responsive to shareholders and to take the necessary steps to implement the proposal.”
All the proposals were reasonable and deserve full consideration by the board.
When Mackey was pretending to be someone else in the Yahoo! chat room, he said shareowner proposals turn annual meetings into “a circus.” Yet, I understand, it was Whole Foods employees who applauded management and heckled at least one shareowner for speaking during the Q&A portion of the meeting. Did Canadians suddenly become less polite after the Olympics (the meeting was held in Vancouver) or were these imported Americans, specially trained by Mackey in how to misbehave?
In part, I’m teasing but I also believe shareowners should be treated with respect. Discussing the issues should be a major portion of any annual meeting, especially one like WFMI, which has chosen to ignore the expressed will of the owners.