Adam Jeffery | CNBC
Icahn has submitted a plan to nominate two candidates to Kroger’s board, the Cincinnati-based company said in a release Tuesday.
Kroger said it first heard from Icahn on Friday. The grocer said that during the discussion, the billionaire investor “voiced his concerns regarding animal welfare and the use of gestation crates in pork production.”
In a letter to Kroger CEO Rodney McMullen, Icahn also took aim at what he called the “egregious wage gaps” between McMullen and other employees at the company.
“The wage gap between the CEO and median worker at Kroger is unconscionable,” Icahn wrote in the letter, which was obtained by CNBC. “Our candidates will take our concerns about deplorable animal suffering and these wage gaps (and other governance problems) at Kroger seriously and add proper oversight.”
Kroger’s announcement Tuesday comes a little more than a month after Icahn launched a proxy fight with McDonald’s focused on the treatment of pigs. In an interview last Tuesday, Icahn addressed his involvement with the fast-food giant.
“I’m not doing that to make money,” Icahn told CNBC’s Scott Wapner on “Closing Bell: Overtime.”
Instead, Icahn described his efforts as a response to his feelings on animal rights. “Emotionally, when you read about what they do to these animals, the unnecessary torture and cruelty, it really bothers me. Whenever I can do something about it, I try,” Icahn said.
Kroger said it will review Icahn’s proposed board nominees, Alexis C. Fox and Margarita Palau-Hernandez, as part of its standard governance policies. The company also addressed Icahn’s issues with animal treatment.
“While Kroger is not directly involved in raising or the processing of any animals, we are committed to helping protect the welfare of animals in our supply chain,” the press release said. “Kroger has an established Responsible Sourcing Framework to clearly define our policies, requirements and practices, including our Animal Welfare Policy, which articulates our expectation that all suppliers will have transitioned away from gestation crates by 2025.”
McDonald’s also has defended its animal rights policies in the face of Icahn’s campaign. The company said last month that by year-end, it expects between 85% and 90% of its U.S. pork volumes will be sourced from sows who do not live in gestation crates during their pregnancy. McDonald’s said it expects that percentage to increase to 100% by the end of 2024.
Icahn’s stake in Kroger is small, as is his position in McDonald’s. Icahn told Kroger he owns 100 shares of the company, according to a person familiar with the matter. The grocer has about 746.8 million fully diluted shares outstanding, according to FactSet.
Kroger shares closed down 1% Tuesday at $56.39. The stock has gained about 25% year to date, bringing its market value to $41.46 billion.
In his letter to McMullen, Icahn said his goal was not to profit from this proxy campaign, but to make a difference in the “glaring injustices” at Kroger. Icahn criticized the company’s board for what he called a lack of oversight on supply chain policies and compensation. McMullen is chair of the board, in addition to serving as CEO since 2014.
Icahn, specifically blasted McMullen’s compensation increase in 2020, while noting the company removed a $2 per-hour raise for store and warehouse workers it offered for a few months during the early days of the Covid pandemic.
“What has happened at Kroger with the issues of animal welfare and employee wages is an affront to the basic fibers of our society — that of decency and dignity,” Icahn wrote. “Your Board of Directors has created an unnecessary situation, placing your company at risk, by rubber stamping unethical policies as well as breaking promises they made to frontline workers during the pandemic.”
Kroger defended its employee compensation record. A spokesperson told CNBC the grocer has “been investing more than ever before in wages,” both prior to the Covid pandemic and during it.
“Kroger invested an incremental $1.2 billion in associate wages and training over the last four years,” the spokesperson said. “This has increased our national average hourly rate of pay from $13.66 to nearly $17, reflecting an increase of more than $3 per hour, or a 25% increase. When benefits like health care and pensions are factored in, our average hourly rate is now over $22.”
— CNBC’s Scott Wapner contributed to this report.
Boeing to slash about 2,000 white-collar jobs in finance and HR, report says
Boeing expects to slash about 2,000 white-collar jobs this year in finance and human resources through a combination of attrition and layoffs, the planemaker confirmed to Seattle Times newspaper on Monday.
Last month, the Virginia-based company announced it would hire 10,000 workers in 2023, but some support positions would be cut.
Back then Boeing acknowledged it will “lower staffing within some support functions” – a move meant to enable it to better align resources to support current products and technology development.
“Over time, some of our corporate functions have grown quite large. And with that growth tends to come bureaucracy or disparate systems that are inefficient,” the newspaper quoted Mike Friedman, a senior director of communications at Boeing as saying. “So we’re streamlining.”
Boeing did not immediately respond to Reuters’ request for comment.
Last year, Boeing said it plans to cut about 150 finance jobs in the United States to simplify its corporate structure and focus more resources into manufacturing and product development.
Trump appeals sanctions for ‘frivolous’ suit against Hillary Clinton
presidential candidates Donald Trump and Hillary Clinton attend campaign rallies in Ambridge, Pennsylvania, October 10, 2016 and Manchester, New Hampshire U.S., October 24, 2016 in a combination of file photos.
Mike Segar | Carlos Barria | Reuters
Former President Donald Trump and one of his lawyers said Monday they are appealing nearly $1 million in sanctions imposed on them for what a federal judge called their “frivolous” lawsuit against Hillary Clinton and more than two dozen other defendants.
The court filing about the appeal came days after a lawyer for Trump and his attorney Alina Habba told the judge in the case they were willing to put up a bond of $1,031,788 to cover the costs of the sanctions while the federal Court of Appeals for the 11th Circuit considered the matter.
In imposing those sanctions Jan. 19, Judge John Middlebrooks said in an order, “We are confronted with a lawsuit that should never have been filed, which was completely frivolous, both factually and legally, and which was brought in bad faith for an improper purpose.”
Trump’s suit, which sought $70 million in damages, accused Clinton, former FBI officials, the Democratic National Committee and others of conspiring to create a “false narrative” that Trump and his 2016 presidential campaign against Clinton were colluding with Russia to try to win the election that year.
Middlebrooks in September dismissed the lawsuit, which was filed in U.S. District Court for the Southern District of Florida, and barred Trump from refiling the complaint.
He later ordered Trump and Habba to pay more than $937,000 in sanctions.
Middlebrooks in his sanctions order called Trump “a mastermind of strategic abuse of the judicial process,” and a “prolific and sophisticated litigant who is repeatedly using the courts to seek revenge on political adversaries.”
A day after Middlebrooks issued that order, Trump voluntarily dropped another lawsuit he had pending before the same judge against New York Attorney General Letitia James. That suit was related to James’ pending $250 million fraud lawsuit against Trump and his company in Manhattan state court.
Jared Roberts, the lawyer for Trump and Habba, did not immediately respond to a request for comment from CNBC about the appeal.
Nissan to buy up to 15% stake in Renault EV unit under reshaped alliance
Pavlo Gonchar | LightRocket | Getty Images
Nissan and Renault on Monday unveiled details of their redesigned alliance, with the Japanese car maker committing to buy a stake of up to 15% in Renault’s electric vehicles unit Ampere.
The alliance junior partner Mitsubishi Motors will also consider investing in Ampere, which Renault aims to list, the companies said in a statement.
“Nissan’s intention is to invest up to 15% in Ampere, Renault Group’s EV & Software entity in Europe, with the aim to become a strategic investor,” the statement said ahead of a presentation in London.
The companies had already announced that under the deal to revive their long-standing alliance the French carmaker would reduce its stake in its Japanese partner to 15% from around 43% now.
Renault will transfer 28.4% of Nissan shares into a French trust, making the two more equal partners in the alliance.
Sources close to the matter said the agreement aimed to make the alliance freer and more balanced for the next 15 years.
The partnership will produce synergies from joint projects in Europe, India and Latin America, and the companies will work together in Renault’s flagship EV business, electronics and solid-state batteries.
Renault will have flexibility to sell the Nissan shares held in the trust but “it has no obligation to sell the shares within a specific pre-determined period of time,” the statement on Monday said.
When it does sell, “Nissan would benefit from a right of first offer, to its or the benefit of a designated third party.”
The two companies last month announced a sweeping remake of their 24-year-old automaking alliance, which was thrown into disarray by the ouster of its architect and former chairman, Carlos Ghosn, amid financial scandal.
That announcement came after nearly four months of intense talks complicated by concerns about the sharing of intellectual property as Renault sought tie-ups with companies outside their alliance.
Renault’s board approved the deal on Sunday night, according to a source. Nissan’s board also approved it early on Monday, the source said.
Investors and analysts will be looking for more clarity on how the trust in which Renault will place the bulk of its Nissan stake will operate.
“There is absolutely no word about what’s going to happen to those shares in the trust,” said CLSA analyst Christopher Richter. “It seems they’re all avoiding the issue of Nissan buying them back which I think would be the best thing for all parties involved.”
Richter said Renault’s brand is not seen as being a strong brand, so it may be tough for the French carmaker to raise money for Ampere.
“I wonder once this thing goes into the market how much money you would really raise, he said. “That’s why I think they’re going to push Nissan to pay too much.”
The unequal relationship between the two carmakers had long been a source of friction among Nissan executives.
While Renault bailed out Nissan two decades ago, it is the smaller automaker by sales.
CLSA’s Richter said that the revamped alliance could enable Nissan and Renault to work together on R&D, shared costs and a few shared products “with a little bit less rancor and acrimony between them,” but added that Honda and General Motors <GM.N> have built a partnership that includes jointly developing lower-cost EVs together without any need for a capital relationship.
“One almost wonders what’s the point of them having any stake in either one, any stake at all,” Richter said.
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