John Mackey, the embattled chief executive officer at Whole Foods Market Inc., referred to activist investor Jana Partners as “greedy bastards” interested only in profiting from a forced sale of the grocer.
“We need to get better, and we’re doing that,” Mackey said in an interview with Texas Monthly. “But these guys just want to sell us, because they think they can make 40 or 50 percent in a short period of time.”
The remarks signal an escalation in tension between Mackey and Jana, which disclosed a stake in the grocery chain earlier this year and pushed to shake up the board. The New York-based investment firm has been calling on Whole Foods to overhaul its operations and seek potential buyers. Decrying Whole Foods’ poor performance, Jana vowed to reassess everything from the company’s brand to the way it schedules worker hours.
Jana made its campaign public at the same time that Mackey was launching a new book on the benefits of vegan eating — timing that Mackey now says was intentional.
“They hijacked my book tour,” he said in the Texas Monthly interview. “It’s not that I think that they were trying to harm the book tour. It’s just like, ‘OK, the CEO is going to be distracted. He’s not going to be able to give full attention to this.’ ”
Representatives for Jana and Whole Foods declined to comment to Bloomberg News.
The company’s same-store sales — a closely watched measure — have declined for seven straight quarters. The slump has put intense pressure on the former darling of the organic-food movement. Mackey co-founded Whole Foods in 1980 with a single store and built it into an industry powerhouse, but now organic food is widely available at mainstream supermarkets.
Last month, in a bid to avoid a fight with Jana and other restless shareholders, Whole Foods overhauled its board of directors, appointing five new members and replacing the chairman. The grocer had hoped the changes would be enough to reach a truce with the activist investor, but Jana decided to keep its options on the table. Whole Foods has already held its 2017 annual meeting, meaning a potential proxy fight for control of the board has to wait until next year.
Jana, which had a stake of more than 8 percent as of May 27, has named four potential board nominees who could be part its slate in 2018: Glenn Murphy, who previously ran Gap Inc.; Thomas Dickson, the ex-CEO of Harris Teeter Inc. who helped sell that chain to Kroger; Meredith Adler, a former equity analyst who serves as a food consultant; and Celeste Clark, a former Kellogg Co. executive who has been working as a regulatory and nutrition consultant.
The crisis has become a “morality play between conscious capitalism and greedy, short-term financial capitalism,” Mackey said in the interview.
“They’re greedy bastards,” he said. “And they’re putting a bunch of propaganda out there, trying to destroy my reputation and the reputation of Whole Foods, because it’s in their self-interest to do so.”
Mackey, 63, has made incendiary comments before. Though an advocate for “conscious capitalism,” he’s also a libertarian who has railed against Obamacare and minimum-wage laws. That’s put him at odds with some Whole Foods customers and employees.
As he faces what could be his biggest showdown, the CEO said he won’t go down without a fight.
“These people, they just want to sell Whole Foods Market and make hundreds of millions of dollars, and they have to know that I’m going to resist that,” Mackey said. “That’s my baby. I’m going to protect my kid, and they’ve got to knock Daddy out if they want to take it over.”