NEWSWhat Would John Galt Do … AboutGlobal Warm<strong>in</strong>g? Deny it.Just before Christmas, <strong>in</strong> the latest chapterof the ongo<strong>in</strong>g sprouts opera that is JohnMackey’s relationship with Whole FoodsMarket Inc., the CEO announced that he isstepp<strong>in</strong>g down from the chairmanship of thecompany’s board while stay<strong>in</strong>g on as CEO andboard member. In a statement posted on hisblog Christmas Eve, Mackey described themove as essentially symbolic. “I have held theChairman title s<strong>in</strong>ce Whole Foods Mar ket’sbeg<strong>in</strong>n<strong>in</strong>g <strong>in</strong> 1978, but the reality is that todayit is merely a title with no authority or responsibilities.<strong>The</strong> authority and responsibilitiesnormally associated with the Chair man positionwere all shifted over time to JohnElstrott, after he became our Lead Directorback <strong>in</strong> January 2001. Despite this shift <strong>in</strong>responsibilities, Whole Foods, along withmany other companies with comb<strong>in</strong>ed CEO/Chairman roles, has been targeted by corporategovernance activists for several yearsnow seek<strong>in</strong>g a separation of these roles.”<strong>The</strong> loudest of those activists have beenassociated with the CtW InvestmentGroup, which has lobbied the board aga<strong>in</strong>stMack ey’s chairmanship for some time.“CtW” means “Change to W<strong>in</strong>,” and thegroup works with the pension funds ofnational unions <strong>in</strong> the CtW alliance that splitfrom the AFL-CIO <strong>in</strong> 2005. As an <strong>in</strong>vestmentgroup, CtW says it focuses on “organiz<strong>in</strong>gworkers’ capital <strong>in</strong>to an effective voice forcorporate accountability and retirementsecurity.” (Accord<strong>in</strong>g to f<strong>in</strong>ancial <strong>in</strong>itiativesmanager Per Olstad, CtW funds hold approximately885,000 shares of WFMI stock, witha market value last week of about $24.4million.) Last August, when Mackey’s WallStreet Journal op-ed oppos<strong>in</strong>g the proposednational health care reform generated widespreadpublicity and a boycott of WholeFoods, CtW President Bill Patterson said,“Mr. Mackey attempted to capitalize on thebrand reputation of Whole Foods to championhis personal political views, but has<strong>in</strong>stead deeply offended a key segment ofWhole Foods consumer base.”Asked last week about Mackey’s decisionto step down from the chairmanship, CtWresearch director Richard Clayton called themove “long overdue,” but said it is unlikely toend CtW’s pressure to replace Mackey asCEO. “As long as Mr. Mackey cont<strong>in</strong>ues tobehave this way, and cont<strong>in</strong>ues to seizeopportunities to publicly speak out <strong>in</strong> waysthat seem bound to aggravate Whole Foodscustomers, and potentially damage the company’sreputation, I th<strong>in</strong>k we and other shareholdersare go<strong>in</strong>g to cont<strong>in</strong>ue call<strong>in</strong>g on theboard to address the problem.” Mackey’s disda<strong>in</strong>for unions is longstand<strong>in</strong>g and returned<strong>in</strong> k<strong>in</strong>d, but Clayton rejected speculation thatthe <strong>in</strong>vestors’ concerns are simply a politicaldispute between the CEO and union <strong>in</strong>terests.“It would be a lot more plausible ifthere were active organiz<strong>in</strong>g campaigns [atWhole Foods], which I’m not aware of,”Clayton said, “or if the company’s performancewas more sterl<strong>in</strong>g … due to Mackey’sstrategic decisions.”Mackey’s outspoken op<strong>in</strong>ions aren’t conf<strong>in</strong>edto health care. A few days after hischairmanship announcement, the Jan. 4 NewYorker published a lengthy Mackey profile byNick Paumgarten likely to add fuel to the controversy.Amid bemus<strong>in</strong>g reflections aboutspiritual epiphanies, deep-breath<strong>in</strong>g exercises,and his own rebirth<strong>in</strong>g, Mackey declareshis belief that “‘no scientific consensusexists’ regard<strong>in</strong>g the causes of climatechange,” dismisses “hysteria about globalwarm<strong>in</strong>g” and <strong>in</strong>ternational efforts to mitigateits effects, and argues, “Historically, prosperitytends to correlate to warmer temperatures.”At a m<strong>in</strong>imum, that would seem tomake po<strong>in</strong>tless – or even counterproductive –his company’s earnestly helpful websiteenabl<strong>in</strong>g customers to calculate their “householdcarbon footpr<strong>in</strong>t.” Moreover, the companyproudly emphasizes its Green Mission andpromotes many programs aimed at environmentalaction and awareness; Mackey’sstatements on climate change would seemto have the potential to underm<strong>in</strong>e that work.In response, Whole Foods spokeswomanLibba Letton said: “I th<strong>in</strong>k most of our regularshoppers understand the difference betweenJohn Mackey mak<strong>in</strong>g a personal statement ofhis op<strong>in</strong>ion about an issue … versus the corporatepolicies that govern our organizationacross almost 300 stores. … <strong>The</strong>re all sortsof th<strong>in</strong>gs that we do, day <strong>in</strong> and day out, thatspeak to how we care for the environment,”reflect<strong>in</strong>g one of the company’s “core values.”As for shareholder concerns that Mackey’sstatements might underm<strong>in</strong>e consumer confidence<strong>in</strong> the Whole Foods brand, Letton said,“I don’t sense anyth<strong>in</strong>g except confidence <strong>in</strong>Mackey’s abilities as CEO of this company andhis vision and leadership.”LEAH LOVISEClayton argues that Mackey’s eccentric outspokennessis offend<strong>in</strong>g core customers,hurt<strong>in</strong>g the Whole Foods brand, and underm<strong>in</strong><strong>in</strong>gthe company’s bottom l<strong>in</strong>e. “Mackeycont<strong>in</strong>ues to look for opportunities to publiclytweak Whole Foods’ core customer base,” hesaid. “It makes very little sense from a bus<strong>in</strong>esspo<strong>in</strong>t of view for the CEO of a companyto put his personal beliefs and his partisancommitments ahead of the reputation of hiscompany, and its appeal to consumers.“<strong>The</strong> guy’s got a John Galt complex,” Claytoncont<strong>in</strong>ued, referr<strong>in</strong>g to the pout<strong>in</strong>g hero ofAyn Rand’s libertarian cult novel Atlas Shrugged.“It’s unfortunate that he keeps <strong>in</strong>dulg<strong>in</strong>g<strong>in</strong> it, rather than putt<strong>in</strong>g his obligations to thecompany ahead of his personal preferences.”Indeed, Mackey told Paumgart en that Randwas mistaken <strong>in</strong> describ<strong>in</strong>g her own philosophyas based on “selfishness” and that he’sa better marketer. “And, by tell<strong>in</strong>g people thatit’s all about selfishness, you’re alienat<strong>in</strong>g ahuge potential part of the market unnecessarily,”Mackey said. “She really meant self<strong>in</strong>terest.Enlightened self-<strong>in</strong>terest. So whyuse ‘selfishness’? It’s a bad brand.”On matters of public policy, some shareholdersargue, Mackey needs to heed hisown advice.– Michael K<strong>in</strong>gClear<strong>in</strong>g the Path to Posthumous PardonAttorney General Greg Abbott has concluded that a Texasgovernor may issue a posthumous pardon – even though thesubject of the pardon wouldn’t be alive to receive the goodnews. Issued Jan. 7, the op<strong>in</strong>ion came <strong>in</strong> response to arequest penned by Houston Sen. Rodney Ellis last summerquestion<strong>in</strong>g the governor’s power to clear the record of anexonerated <strong>in</strong>dividual who has already died. Gov. RickPerry’s office had said his hands were tied by a legally b<strong>in</strong>d<strong>in</strong>g1965 A.G. op<strong>in</strong>ion conclud<strong>in</strong>g that the law required theexonerated <strong>in</strong>dividual to be around to physically receive thepardon. But the previous op<strong>in</strong>ion was not legally b<strong>in</strong>d<strong>in</strong>g,Abbott has concluded, and the governor may clean the slateeven after a person has passed on.Now that Abbott has ruled, the field appears clear for Perryto f<strong>in</strong>ally pardon Timothy Cole, who was convicted of a 1985rape <strong>in</strong> Lubbock that he did not commit. Cole died <strong>in</strong> prison<strong>in</strong> 1999 before he was able to clear his name,and last year he became the state’s first personto be posthumously exonerated. But even thatdeterm<strong>in</strong>ation, made by Travis County DistrictCourt Judge Charlie Baird <strong>in</strong> February 2009,was not enough to earn Cole a pardon. Now, itseems Cole’s family will f<strong>in</strong>ally get the reliefthey’ve been look<strong>in</strong>g for. Abbott concluded that there is noth<strong>in</strong>g<strong>in</strong> the Texas Constitution that would bar a governor fromissu<strong>in</strong>g such a pardon so long as the state’s Board ofPardons and Paroles recommends the pardon be issued.“<strong>The</strong> pla<strong>in</strong> language of the constitution does not expresslyaddress whether the Governor may issue posthumous pardons,”Abbott wrote. “However, because the constitution hasgiven the Governor pardon power <strong>in</strong> all crim<strong>in</strong>al cases excepttreason and impeachment and has not otherwise limited hisauthority to grant posthumous pardons, it couldbe <strong>in</strong>terpreted as implicitly authoriz<strong>in</strong>g him togrant posthumous pardons <strong>in</strong> crim<strong>in</strong>al cases, solong as all constitutional requirements are met.”<strong>The</strong> Innocence Project of Texas was thrilled withCole the outcome, which project founder and chief counselJeff Blackburn called the “f<strong>in</strong>al hurdle” toclear<strong>in</strong>g Cole’s name. <strong>The</strong> organization took Cole’s case afterJerry Wayne Johnson, the person actually responsible forthe rape of Michelle Mall<strong>in</strong>, contacted the group to confesshis guilt. Blackburn said the group is now work<strong>in</strong>g on a pardonpacket to be sent to the Board of Pardons and Paroles. In astatement, Perry said he was “pleased” that Abbott had“opened the door” for him to issue such a pardon. “I hope the[board] will act swiftly <strong>in</strong> send<strong>in</strong>g a recommendation to my deskso that justice can f<strong>in</strong>ally be served,” he said. – Jordan Smith14 T H E A U S T I N C H R O N I C L E JANUARY 15, 2010 a u s t i n c h r o n i c l e . c o m
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