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Carl Icahn McDonald’s shareholders letter calls out Wall Street ESG ‘hypocrisy’


Delivering Alpha, New York: September 13, 2016, Carl Icahn

David A. Grogan | CNBC

Carl Icahn published his letterTo McDonald’sOn Thursday, shareholders called out the compensation of Wall Street and company top brass for ESG investment policies.

This latest advancement is it in Icahn’s animal-welfare battle with the fast-food chainConcerns about the treatment of pregnant porcines. A billionaire corporate raider wants to fill two of the seats in his board. He’s looking for nominees who support McDonald’s belief that all U.S.-based suppliers should be “crate-free”. Icahn is also fighting a similar war. KrogerAlso,

Icahn started his letter challenging asset managers for their “biggest hypocrisy” of the present. Large Wall Street lawyers, banks, and Wall Street bankers are investing to maximize profits and not support “tangible social progress,” he said.

He wrote that “If the ESG movement wants to be more than just a marketing tool and fundraising tool,” the large asset managers, who make up the majority of McDonald’s’ biggest owners, must prove their claims with action.

The Vanguard Group (the asset management arm State Street) and McDonald’s are McDonald’s three largest shareholders. BlackRockAccording to FactSet, it is.

Icahn called McDonald’s compensation “unconscionable”, and stated that the board condones multiple forms of injustice.

Icahn stated that if executives of the Company made the same efforts to get their suppliers out of gestation crate, as they did to obtain rich compensation packages to do so, this would have prevented the election.

McDonald’s claims that its U.S. pork supply is “crate-free” by 2024. This marks a delay of two years to the 2022 deadline, which it had set ten years ago. McDonald’s blames the Covid-19 pandemic as well as the outbreak of African Swine Fever for this delay.

Icahn wrote in his letter that McDonald’s should’ve prioritized the issue earlier to ensure it would stick with its initial promise.

According to Burger King, the burger chain will have 85% to 90% pork from sows who were not kept in gestation crates at any time during pregnancy.

McDonald’s reported in regulatory filings that the company expected to spend $16million on its proxy fight. Icahn challenged the decision of McDonald’s to spend so much.

“How many pigs wouldn’t be subject to the torturous gestation crates torture if $16 million was spent on that instead of third parties retained to McDonald’s soliciting your votes for re-election two Board nominees who presided over an inexplicable multi-year failure by McDonald’s in order to promote animal welfare throughout McDonald’s’ supply chain?” He wrote.

McDonald’s shareholders are invited to vote at the annual meeting of McDonald’s on May 26, on whether they want Icahn’s nominees Leslie Samuelrich, and Maisie Ganzler.

McDonald’s shares have risen 10% in the past 12 months. This gives the company an estimated market value of $190 billion.