Whole Foods Market Inc
The shareholder resolution from Amalgamated Bank's LongView Funds would roll back a bylaw change that Whole Foods directors put in place a few months after the U.S. Securities and Exchange Commission closed an investigation into the online chat activities of Chairman and Chief Executive John Mackey in April 2008.
The proposal before the company's annual meeting in Vancouver seeks a bylaw change to permit shareholders to remove a director either with or without cause. The bylaws now require that a cause be given.
The ability for shareholders to remove a director with or without cause helps investors promote accountability among our elected directors, said Scott Zdrazil, director of corporate governance for Amalgamated Bank, whose LongView Fund holds 66,830 Whole Foods shares.
Whole Foods' board unanimously recommended that investors vote against the proposal from Amalgamated.
The SEC probe centered on Mackey's anonymous comments on a Yahoo financial chat forum from 1999 to 2006 in which he trumpeted Whole Foods' performance while disparaging then-rival Wild Oats Markets Inc. Whole Foods bought Wild Oats for $565 million in 2007. The SEC ultimately decided to take no action against Whole Foods and Mackey.
Amalgamated said Whole Foods' board unilaterally and without advance notice to shareholders changed the bylaws in August 2008 to limit shareholders' power to remove directors only in situations where there was cause.
That change narrowly defined cause as covering only a criminal indictment or a judicial finding that a director had breached his or her fiduciary duties to the company or was not capable of performing a director's responsibility, the proposal said.
Representatives from Austin, Texas-based Whole Foods were not immediately available for additional comment.
(Reporting by Lisa Baertlein; Editing by Richard Chang and Diane Craft)