Carl Icahn starts proxy fight with McDonald’s over pigs’ welfare

But McDonald’s has yet to make good on the promise. The company said Sunday that Icahn had nominated two people for election to its board in an apparent start to a proxy battle with the fast-food giant, a confrontational attempt to collect shareholder proxy votes to replace board members, gaining enough power within the company to change its policies.

In recent years, activist investors have used the tactic to not only seek higher profits, but also align companies with their ethical or political stances. A group of investors led by a hedge fund called Engine No. 1 successfully won a third seat on the board of ExxonMobil in June, pushing the oil giant on its positions regarding climate change.

Icahn nominated Leslie Samuelrich, president of Green Century Capital Management, which “leverages its clout as a shareholder to protect our water, air and land,” and Maisie Ganzler, chief strategy and brand officer at Bon Appétit Management Company, which describes itself as “food service for a sustainable future.”

McDonald’s said Icahn’s “stated focus in making this nomination relates to a narrow issue regarding the Company’s pork commitment,” referring to the gestation stalls. A senior supply chain executive at McDonald’s said in 2012 that the crates were “not a sustainable production system for the future” and that “there are alternatives that we think are better for the welfare of sows.”

In a 2017 “Animal Health & Welfare Update,” McDonald’s said that by the end of 2022, it would source its U.S. pork only from suppliers that do not use the stalls for housing pregnant pigs.

But McDonald’s said Sunday that it now expects that only 85 to 90 percent of its U.S. pork will be sourced from pigs not housed in the crates during pregnancy by the end of the year, citing “industry-wide challenges for farmers and producers,” such as the coronavirus pandemic and disease outbreaks. Its commitment to exclusively use pork in the United States that was sourced from “sows housed in groups during pregnancy” is now expected by the end of 2024, McDonald’s said.

Icahn had raised concerns over the scope of McDonald’s 2012 commitment, telling the Wall Street Journal that the company’s suppliers move pigs out of the crates only after it is confirmed that they are pregnant, at which point the sows could be more than a quarter into their 16-week pregnancies. Icahn had expected McDonald’s to ditch gestation crates entirely, he said.

McDonald’s did not immediately respond to a request for comment late Sunday regarding Icahn’s concerns. The company said in its statement that Icahn had “asked for new commitments,” including a demand that McDonald’s suppliers in the United States move to “crate-free” pork. McDonald’s said that “the current pork supply in the U.S. would make this type of commitment impossible,”…