Carl Icahn is most definitely not Lovin’ It.
The billionaire investor slammed McDonald’s for its animal welfare practice and the “hypocrisy” of Wall Street firms that seek to drive profit from ESG investments without actually following through and supporting initiatives that drive “tangible” progress in his annual letter to shareholders on Thursday.
“I consider it my responsibility to engage in constructive activism to help rectify glaring injustices perpetuated by many ineffective boards of directors and management teams leading America’s top public corporations,” Icahn icily began in his letter. “By promoting necessary change at these types of companies, which have the resources to be a force for good, we can clean up insular boardrooms and drive lasting improvements for society as a whole.”
Icahn wrote that McDonald’s has a “responsibility” and a “duty” to be a leader on ESG-related issues, especially animal welfare.
“Ten years ago, McDonald’s made a commitment that convinced me it genuinely intended to be that leader, but I realize now its real intention was only to appear to care about animal welfare while in practice remaining complacent regarding glaring cruelty in its own supply chains,” he said.
Icahn issued several demands for the company on this subject, most of which involve the elimination of placing pregnant animals in gestation crates, which are tight, metal stalls that do not allow for the animal to move about and are considered a form of animal cruelty by animal activists.
He called for the elimination of gestation crates (for pregnant animals) from the company’s supply chain by 2023 in the U.S. and elimination globally by the end of 2024.
“Industry and food retailers need to hear the bell tolling for a more humane food system in which gestation crates are no longer acceptable,” Icahn wrote. “It’s essential that we ensure corporate leaders keep their word and make progress against stated goals that will help catalyze better stewardship for our entire economy.”
Icahn claimed that McDonald’s promise to source 85 to 90% of its pork from non-gestation crates by the end of 2022 is a “cynical fabrication” and slammed the chain for “animal abuse,” noting that the U.S. is far behind on legislature and protection practices that recognize animals as “sentient beings” and called McDonald’s and its board “irresponsible and reprehensible.”
“Big Meat’s powerful and connected lobby protects and enables the stronghold the industry has on markets and supply chains. This is why it is crucial for influential buyers such as McDonald’s to take a stand through their procurement mandates with their suppliers,” Icahn told shareholders. “I believe McDonald’s’ customers want food that is sourced ethically, responsibly and humanely. Gestation crates are none of those.”
In a written statement, McDonald’s responded to Icahn’s letter, calling his demands hypocritical and pointing out that if the company were to abide by all of Icahn’s demands, the price of food would go up for customers.
“What Mr. Icahn is demanding from McDonald’s and other companies is completely unfeasible. Based on current estimates, McDonald’s would require at least 300-400 times the animals housed today in “crate-free” systems to keep our supply chain running,” the company penned. “Mr. Icahn asserts that McDonald’s customers ‘want food that is sourced ethically, responsibly, and humanely.’ We agree, and we take our role in providing that seriously. Value and accessibility are also important, particularly as customers confront rising costs in all aspects of daily life. Lacking broad support from industry experts, his campaign would have one certain outcome: a greater financial burden on customers.”
The chain also called Icahn out for his decision to nominate two new members to the company’s board of directors (Leslie Samuelrich and Maisie Lucia Ganzler, whom Icahn nominated in February 2022 ) as one-sided with only Icahn’s interests in animal welfare at top of mind.
As of that February 2022 decision, Icahn reportedly only owned 200 shares of McDondald’s stock.
“Mr. Icahn would seek to remove valuable directors with strong track records from the McDonald’s Board and replace them with single-platform nominees that not only lack public company board experience, but also the expertise and qualifications to add meaningful value to the majority of issues regularly faced by the McDonald’s Board,” the fast-food giant said. “McDonald’s shareholders deserve better.”
McDonald’s was up more than 8% year over year as of Friday afternoon.