Whole Foods Market (Nasdaq: WFMI) Chairman
and CEO John Mackey is
no stranger to controversy. His recent health care op-ed
in
The Wall Street Journalled some angry customers to
threaten a boycott. Now a shareholder's joined the dogpile,
agitating for Mackey's resignation or removal by the
company's board.
CtW Investment Group argues that Mackey "attempted to
capitalize on the brand reputation of Whole Foods to champion
his personal political views," and that his action
"deeply offended" members of the grocery's consumer base.
Note that CtW is part of Change to Win, a federation of
unions; it's no secret that non-unionized Whole Foods isn't
exactly chummy with the labor movement.
Ironically, all the outrage seems to ignore that Whole
Foods is a very progressive company that treats its employees
very well. A
Slatearticle recently noted that Mackey actually
uses the same health plan as his employees. When it comes to
health care, whatever his opinions, he eats his own
(presumably organic) cooking.
Still, the rancorous buzz raises a legitimate question for
investors: Should a CEO potentially endanger a company's
brand by speaking out about personal beliefs? Executive
crusades can be risky and distracting, as
Overstock.com 's (Nasdaq: OSTK) CEO Patrick
Byrne's increasingly quixotic war against naked short selling
amply demonstrated.
Domino's Pizza 's (NYSE: DPZ) founder Thomas
Monaghan's well-known anti-abortion views also led some
customers to steer clear of the chain in the 1980s. On the
opposite side of the debate, abortion foes have criticized
Berkshire Hathaway 's (NYSE: BRK-A) Warren
Buffett for his quieter but still substantial support for
family planning organizations. If executives' strong opinions
distract them from running their businesses, or trigger
customer backlash, shareholders could suffer real
consequences.
However, some CEOs can voice opinions with nary a peep.
Safeway 's (NYSE: SWY) CEO Steven Burd
similarly opined on health care reform recently.
"Market-based solutions can reduce the national health-care
bill by 40%," read the subhead in his own
WSJop-ed piece. But given the subsequent radio
silence, nobody really gave a flying fig (organic,
conventional, or otherwise) about Burd's thoughts on the
topic.
Personally, I think Mackey should stay. He's the company's
founder, and in my opinion, taking stances on controversial
issues (and rationally supporting his theses) actually
demonstrates his intelligence. He may be a loose cannon
sometimes, but he's also one of the sharper knives in the
proverbial drawer. And lest we forget, he's built a fabulous
company.
That said, many investors disagree with me. Some still
haven't gotten over the
Rahodeb discussion board scandal.
What do you think? Should Whole Foods keep Mackey and his
fresh ideas in the CEO spot, or toss him out like last week's
lettuce? Sound off in our poll below.
This article was originally published as
Should Whole Foods Bag Its CEO?on
Fool.com
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