facebook pixal
Financing

McDonald’s pushes back against Carl Icahn

The investor has ignited a proxy fight against the burger giant over the treatment of pigs. But the company is wondering why Icahn isn’t making the same recommendation to a pork supply business he owns.
McDonald's Carl Icahn
Photo courtesy of McDonald's

Carl Icahn has proposed two new members to the McDonald’s board, the company confirmed on Sunday, following through on a promise he made to take the burger giant’s treatment of pigs directly to the company’s shareholders.

Icahn, who is not a big shareholder of the company, has nominated Leslie Samuelrich and Maisie Ganzler to stand for election at this year’s annual meeting, the company said Sunday.

But the Chicago-based chain pushed back against Icahn, defending its record in its pork purchases and arguing that it became the first major brand in 2012 to promise that it would move away from buying pork from suppliers that use gestation crates.

The company also questioned why Icahn isn’t making the same demands of Viskase, a supplier to the pork and poultry industries. Icahn is a majority owner of that company, McDonald’s said.

“Mr. Icahn’s ownership provides him with unique exposure to the industry-wide challenges and opportunities in migrating away from gestation crates,” the company said in a release on Sunday. “Thus, it’s noteworthy that Mr. Icahn has not publicly called on Viskase to adopt commitments similar to those of McDonald’s 2012 commitment.”

Icahn is not a big shareholder at McDonald’s—he told Bloomberg last week that he only owns about 100 shares. But he also told the network that he was close to preparing a slate of nominees to the burger giant’s board.

His complaint is that McDonald’s hasn’t followed through on a promise the company made to buy pork from suppliers that use gestation crates, enclosures that sows are kept in for much of their lives.

The company argued that it has made progress on that front. It noted that it sources only about 1% of U.S. pork production. The company said that 30% to 35% of U.S. pork production has moved to group housing systems. And McDonald’s said it expects that 85% to 90% of its pork will come from sows not housed in gestation crates during pregnancy. And it expects to reach 100% by the end of 2024.

McDonald’s said Icahn wants the chain to require its suppliers to move to “crate-free” pork and set time frames. But the company said the current U.S. pork supply would make that type of commitment impossible. It also said that doing so “reflects a departure from the veterinary science used for large-scale production throughout the industry.” It also suggested that such a demand would raise prices.

According to her LinkedIn profile, Samuelrich is president of Green Century Capital Management, an environmentally focused investment firm. Ganzler, meanwhile, is chief strategy and brand officer for Bon Appetit Management Co.

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Trending

More from our partners