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• In 2012, McDonald's pledged to stop buying pork
from producers who use gestation crates
• Icahn owns around 100 shares of McDonald's,
worth around $26,000
Carl Icahn, the billionaire activist investor, has
reportedly threatened privately to run a proxy fight for representation on the
board of McDonald’s Corp (NYSE: MCD).
Icahn is pushing the burger chain to treat pigs better and
expecting to ban the use of gestation crates, the Wall Street Journal reported
on Tuesday, citing people familiar with the matter.
Gestation crates are metal enclosures about two feet wide
to constrain pregnant swine and prevent sows from turning around, maximizing
available space. Some producers say it also prevents the pigs from harming one
another.
Investor activism is acquiring a significant stake in
companies before pressuring management to make changes to benefit shareholders.
McDonald’s false promise
In 2012, McDonald’s pledged to stop buying pork from
producers who use gestation crates. However, Icahn thinks the original promise
was a “hogwash,” the report said.
The burger chain is again trying to push for the cause in
2022, a decade later, after Icahn started pushing for the change behind the
scenes.
McDonald’s, in a statement to WSJ, said that more than 60%
of its U.S. pork is sourced from “confirmed pregnant sows” not housed in
gestation crates, and it expects that figure to be 85% to 90% by the end of
this year.
The burger chain said it would reach its goal by the end of
2024, which it earlier said would reach by 2022.
“Industry-wide challenges for farmers and producers –
including the impacts of global swine disease outbreaks and the COVID-19
pandemic - have delayed our producers ability to meet our 2012 pork commitment
on our original timeline,” McDonald’s said.
Controversy-ridden McDonald’s
Icahn currently owns around 100 shares of McDonald’s, worth
around $26,000, which he bought recently.
WSJ report did not say when he threatened to run a proxy
fight.
McDonald’s is in talks with advisers to shield itself from
a full-fledged campaign if Icahn decides to show how its sausage is made, the
report mentioned citing people familiar with the matter.
The fast-food giant, which is battling with controversies,
settled its lawsuit with former CEO Steve Easterbrook, guilty of inappropriate
behavior with employees, and clawed back his severance payment of $105 million in
cash and stock.
Picture Credit: NYPost