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Lesson #1 in business career management: Don't say or do anything that you wouldn't be comfortable having plastered on the Front Page of the Wall Street Journal. Now this might seem like a pretty rigid guidepost, but at least it forces thinking about the consequences of one's actions and its possible impact on your reputation and that of your employer. Imposes pretty good discipline, I'd say. This includes things you say to others both inside and outside your company and all forms of written communication, including emails and, say, postings on blogs and message boards. And if you happen the CEO of a public company, the stakes are that much higher because of heightened reputational risk as well as rules like Regulation FD. Now, my lesson should be second nature to all CEOs, as it has probably been repeated to them 1000 times by their General Counsel, Head of Compliance, Head of the Audit Committee, etc., yet it doesn't seem so in light of revelations about the CEO of Whole Foods, John Mackey, and his behavior as chronicled in a recent WSJ Online story. So my question to my readers is this:

HOW DOES JOHN MACKEY, CEO OF WHOLE FOODS, THINK THAT POSTING RAH RAH MESSAGES ON YAHOO! MESSAGE BOARDS OVER AN 8 YEAR PERIOD IS OK? MESSAGES THAT INCLUDE FINANCIAL DISCLOSURES AND PERSPECTIVES FROM THE CEO OF THE COMPANY, WHO IS NOT PUBLICLY DISCLOSING HIS TRUE IDENTITY AND CERTAINLY NOT DISCLOSING THIS INFORMATION TO ALL INVESTORS AT THE SAME TIME?

Sorry for the use of all caps, but I am so blown away by this discovery that I couldn't control myself. For those who are playing along, Reg FD was imposed in October 2000, a full six years before Mr. Mackey ended his message board posting career. Did it ever occur to him that maybe, just maybe, his postings using a pseudonym were in violation of a pretty important securities law? Did anyone in the company know about this like, say, company counsel? I don't even know where to begin as it relates to governance best-practices. This is such a horrible example of corporate stewardship that it is truly mind-boggling. Through his actions, which I will assume for the moment were fueled by ego and not the conscious desire to manipulate stock prices, he has jeopardized the very brand and franchise he and thousands of employees have worked so hard to build over almost 30 years. Did this ever occur to him as he was posting as Rahodeb that he could be placing his company, his employees and his stockholders at risk? I'd assume not. But isn't this part and parcel of being the CEO of a public company? I'd say so.

Just check this out from the WSJ story and think to yourself: is this one of the most astounding lapses in CEO judgment that you've every heard of?

Mr. Mackey's online alter ego came to light in a document made public late Tuesday by the Federal Trade Commission in its lawsuit seeking to block the Whole Foods-Wild Oats deal. The 45-page filing, submitted under seal when the lawsuit was filed in June, includes a quote from the Yahoo site in which Mr. Mackey said "the writing is on the wall" for Wild Oats. An FTC footnote said, "As here, Mr. Mackey often posted to Internet sites pseudonymously, often using the name Rahodeb."

Whole Foods didn't authenticate each and every one of Rahodeb's postings as being from Mr. Mackey, who declined to be interviewed. However, the company said in a statement that among millions of documents the company gave the FTC were postings Mr. Mackey made from 1999 to 2006 "under an alias to avoid having his comments associated with the Company and to avoid others placing too much emphasis on his remarks." The statement said, "Many of the opinions expressed in these postings now have far less relevance than when they were written."

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Rahodeb began posting messages about Whole Foods shares on Yahoo.com in the late 1990s. He quickly gained a reputation as being one of the stock's biggest cheerleaders, and gamely defended himself when other posters chastised him for being too rosy. "I've never pretended to be anything but enthusiastic about WFMI," he wrote in 2000, using Whole Foods' stock symbol. "I admit to my bias -- I love the company and I'm in for the long haul. I shop at Whole Foods. I own a great deal of its stock. I'm aligned with the mission and values of the company... Is there something wrong with this?"

Rahodeb often expressed pride in the work of Mr. Mackey. "While I'm not a 'Mackey groupie," he wrote in 2000, "I do admire what the man has accomplished -- building a $1.6 billion business from scratch is quite an achievement."

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By 2005, Whole Foods had grown to more than 160 stores and its annual sales were $4 billion, making it the leading player in the natural and organic foods sector. In a message in January of that year, Rahodeb predicted great things for Whole Foods' stock. "13 years from now Whole Foods will be a $800+ stock before splits," he wrote. "Whole Foods is a tremendous growth stock." At the time, the shares traded at about $94. Whole Foods' shares closed yesterday at $39.50, up $1.03, or 2.68%.

Rahodeb often sparred with other users, deploying a rigorous analysis of financial statements. "Your quarterly cash flow variance isn't statistically meaningful because the time period is too short," he complained to another user who had criticized Whole Foods in March 2006. He then pasted a summary of the previous six years of Whole Foods' operating cash flow. "Over the past 5 years operating cash flow has increased 330%," Rahodeb noted.

When it came to Wild Oats, Whole Foods' main rival, Rahodeb didn't pull punches. He often criticized Perry Odak, Wild Oats' former CEO, who resigned last year. "While Odak was trying to figure out the business and conducting expensive 'research studies,' to help him figure things out, Whole Foods was signing and opening large stores in OATS territories," Rahodeb wrote in 2005. "Odak drove off most of the long-term OATS natural foods managers" and brought in executives who "didn't know too much about the natural/organics industry or their customers."

And to think: all of this came to light because of a filing relating to the proposed Whole Foods-Wild Oats deal. Given today's revelations I'd say that Mr. Mackey might have some problems somewhat larger than whether or not the OATS acquisition goes through. Let this experience be a reminder to everyone, be you a corporate chieftan, a junior employee or a high school student posting on Facebook: Nothing is truly private and your actions have consequences. Be mindful of what you do and how you do it because, some day, it just might end up on the Front Page of the Wall Street Journal. Just like Mr. Mackey learned today.

Source: Whole Foods CEO John Mackey Makes a Mind-Boggling Mistake