Carl Icahn Nominates Directors To McDonald’s Board To Challenge Pork Policies

Billionaire investor Carl Icahn has launched a proxy fight for two seats on the Board of McDonald’s Corp. aiming to challenge the treatment of pigs by the fast-food chain’s suppliers.

Icahn, who holds 200 shares of McDonald’s stock, recently slammed McDonald’s for failing to end the use of gestation crates for pregnant pigs in its supply chain, saying the practice causes unnecessary suffering.

In a statement confirming Icahn’s nominations for two directors, the burger chain said it is on track to achieve its goal of sourcing U.S. pork from confirmed pregnant sows not housed in gestation crates by 2024. The company initially had pledged to end the practice by 2022.

McDonald’s noted that Icahn’s stated focus in making the nomination relates to the issue regarding the company’s pork policies, which The Humane Society U.S. has already introduced through a shareholder proposal.

McDonald’s said Icahn has insisted on new company commitments, and has required all of McDonald’s U.S. pork suppliers to move to “crate free” pork, and set specific timeframes for doing so.

However, the company said the current pork supply in the U.S. would make this type of commitment impossible, and would also harm the company’s shared pursuit of providing high quality products at accessible prices.

McDonald’s noted that it sources only around 1% of U.S. pork production and does not own any sows, or produce or package pork in the United States.

The company also said that in 2012 it made a commitment to source from producers who do not use gestational crates for pregnant sows. McDonald’s said it led the industry since then, and at present, an estimated 30 – 35% of U.S. pork production has moved to group housing systems.

By the end of 2022, the company expects to source 85% to 90% of its U.S. pork volumes from sows not housed in gestation crates during pregnancy. By the end of 2024, it expects 100% of its U.S. pork will come from sows housed in groups during pregnancy, despite industry-wide challenges for farmer and producers, such as the COVID-19 pandemic and global swine disease outbreaks.

Further, McDonald’s noted that Icahn, the majority owner of Viskase, a packaging supplier for pork and poultry industry, has exposure to industry-wide challenges and opportunities in migrating away from gestation crates. Still, he has not publicly called on Viskase to adopt commitments similar to those of McDonald’s 2012 commitment.

McDonald’s confirmed Icahn’s nominations of Leslie Samuelrich and Maisie Ganzler to stand for election at the 2022 Annual Meeting. The company said there is no shareholder action required at this time, and that the Board will evaluate the nominees just like any other candidates based on Director Selection Process guidelines.

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