In a scathing open letter to McDonald’s shareholders, legendary investor Carl Icahn said the company’s leadership “disappointed” its investors and misled the public about animal welfare practices.
He wrote: “McDonald’s board of directors … is failing shareholders and stakeholders by overseeing animal welfare abuses, the downfall of the supply chain and what I see as a hollow environmental, social and governance agenda.” “The company’s reluctance to improve policies and verification methods represents a serious risk to business, its bottom line, and the world around us.”
In February, McDonald’s reported that Icahn nominated two new directors for its board of directors, saying at the time that the move “related to a narrow issue of the company’s commitment to pork”. This issue is the use of pregnancy boxes Small stalls where pregnant pigs are kept, their movements severely restricted – in McDonald’s pork supply chain.
Icahn said he only owned 200 shares in the company, McDonald’s indicated at the time.
McDonald’s first promised in 2012 to phase out the use of boxes. at February of this yearsaid that by the end of 2022, 85% to 90% of pork in the United States will come from pigs that are not placed in gestational crates, and that it expects to meet the 100% target by the end of 2024. The company also backtracked on the proposal from Icahn , saying it was “asking for new commitments,” including sourcing exclusively “box-free” pork.
“While the company looks to foster further collaboration across the industry on this issue, the current supply of pork in the United States will make this type of commitment impossible,” McDonald’s said.
In a speech Thursday, Icahn said that McDonald’s
(MCD) The claim that most American pork comes from pigs not placed in lamb crates was a “cynical slander”. In a proxy statement filed with the Securities and Exchange Commission on Thursday, Icahn and his board nominees, Leslie Samuelrich and Macy Lucia Ganzler, argued that to get to those numbers, McDonald’s said
(MCD) is “simply reducing the amount of time the sows spend in cages of lambs and using misleading language to disguise their failed commitment.”
In his letter, Icahn said some of the reasons McDonald’s gave for not meeting its 2022 target — such as pandemic challenges across the industry and devastating swine fever – are “bad excuses”. He pointed to the high salaries of executives as evidence that the company can reach its goals when it wants to. “You can look but you won’t find similar pay gaps for McDonald’s managers and employees,” he said.
The letter outlined clear demands, including a commitment to remove the use of carry-on boxes entirely from McDonald’s supply chain by the end of next year, among other things.
The company said in a statement in response to the filings, that making the changes requested by Icahn will increase prices for customers.
“McDonald’s today is paying a premium to purchase mass pork in accordance with our 2012 commitment,” the company said, noting that switching to a system that meets the standards set by Icahn on Thursday “would significantly increase these costs, placing a burden on all aspects of our business, supply chain, and McDonald’s customers.” “.
From the company’s point of view, the company said, “What Mr. Icahn is asking … is absolutely not possible.”
McDonald’s added that it “concerns the health and well-being of the animals in our supply chain and has long led the industry with our animal welfare commitments.”
Animal welfare became Icahn’s personal cause. in february Interview with BloombergHe said he was disturbed by the conditions of holding the pigs. “I really feel so emotional for these animals and their needless suffering,” he said.
Last month, he turned his attention to Kruger
(Korea) On the same subject, by telling the company that he intends to appoint directors to the company’s board of directors. “Mr. Icahn expressed concerns regarding animal welfare and the use of lamb crates in pork production,” the company said at the time.
For Icahn, this isn’t just about pigs. his fight Also about Wall Street’s overall commitment to sustainable practices.
“I want to shed light on what may be the greatest hypocrisy of our time,” wrote Icahn. “It appears that a significant number of Wall Street firms and their bankers and lawyers are taking advantage of ESG to make profits without doing enough to support tangible societal progress…It is clear that the ESG status quo on Wall Street needs to change.”
“If the ESG movement is to be more than a marketing concept and fundraising tool, then the massive asset managers who are among McDonald’s biggest owners must back their words with action,” he added.
McDonald’s annual shareholder meeting is scheduled for May 26. It will announce its earnings next week, on April 28.
CNN Business’s Julia Horowitz and Alicia Wallace contributed to this report.
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