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Carl Icahn Initiates Investor Action Against McDonald's

02/27/2022

Carl Icahn has initiated a campaign to force McDonald's Corporation to expedite the announced program of only sourcing pork products from farms using group-housing of sows. McDonald's previously committed to banning pork from sows held in gestation crates. The Company had planned to attain approximately 90 percent compliance by the end of 2022 and complete sourcing consistent with California Proposition #12 by the end of 2024.

 

Icahn known as an activist investor has developed a concern for livestock welfare presumably advised by his daughter Michelle who has an affiliation with the Human Society of the United States. Icahn intends pursuing a proxy fight despite a small shareholding in McDonald's. In a recent interview, Icahn stated "I really do feel emotional about these animals and the unnecessary suffering they are put through. He added “A pig has a good brain and is a feeling animal".

 

Icahn has nominated Leslie Samuelrich, President of Green Century Capital Management and Maisie Ganzler, Chief Strategy and Brand Officer at Bon Appetit Management to the board of McDonald's. Although considered a long shot, Icahn has again focused attention on the issue of gestation crates and has elicited support from pension funds including KLP in Norway that holds a $75 million equity position in McDonald's. It is estimated that McDonald's is responsible for one percent of U.S. pork consumption.

 

The action taken by Icahn is a slippery slope and could represent a trend of activist investors placing pressure on food chains, restaurants and food service companies to conform to welfare standards that may neither be justified nor economically feasible and extending across a broad range of livestock including poultry.