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Once again, it has been 'beat up the CEO' week - scratch that, decade. The target this week has been John Mackey of the natural and organic grocer Whole Foods (WFMI). Much ink has been spilled calling for his resignation from the company that he started from the first floor of his house in Austink Texas and grew to a $5.7 billion dollar sales, Fortune 500 company with 196 locations.

John Mackey has revolutionized the grocery business, shown that distributing natural and organic food can be profitable and made available healthier food to millions of Americans, British, and Canadians. Whole Foods has been named by Fortune Magazine every year since the inception as one of the 100 best companies to work for.

In recently released FTC documents, it was disclosed that Mackey was posting on the Yahoo Finance message boards for Whole Foods and Wild Oats under the pseudonym 'rahodeb', an anagram of his wife’s first name Deborah. I checked with lawyers and confirmed that the postings themselves are not illegal.

The press and corporate governance experts are calling for his scalp, because they say the postings show a lack of control and prudence. Who cares? I say keep him and fire the press. He certainly showed a lack of judgment and should be slapped on the wrist for it. Full Stop. That should be the end of the story.

A loose cannon in the CEO’s chair is nothing new. Patrick Bryne of Overstock, Jon Schwartz of Sun, Steve Jobs of Apple, and Jeff Bezos of Amazon are three examples. Whole Food shareholders been richly rewarded for believing in their eccentric CEO. Since August of 1992, the stock has appreciated in price from $2.50 to $39. Investors have earned 1500% return on investment.

Why all the braying now? The press is acting like the groom that married the town whore and is surprised on the wedding night that she is not a virgin. John Mackey has always been eccentric. He is a yoga and meditation practicing CEO Vegan who usually wears shorts and hiking boots to work. My favorite quote of his: "The union is like having herpes. It doesn't kill you, but it's unpleasant and inconvenient, and it stops a lot of people from becoming your lover."

The FTC released the documents because they are contesting the merger of Whole Foods and Wild Oats. The postings were used to proof that the Whole Foods CEO is obsessed with driving Wild Oats out of business. With the postings of Mackey and other factors, it seems to me that the FTC will prevail and the requested injunction to stop the sale will be issued.

If the Whole Foods-Wild Oats merger is prevented solely due to Mackey’s proclivity for the Yahoo message boards, maybe he hurt Whole Foods a smidgen. Or maybe not. History is littered with hyped mergers that have failed. Time Warner-AOL comes to mind. In my opinion, "synergies" is the most overrated word in the investment banker’s vocabulary.

Whole Foods has mostly grown by opening up new stores. They are in schedule to open a record number of stores this year. Opening stores is expensive. But it is not that much more expensive than acquisitions.

We need to keep this mistake in perspective. John Mackey has done many things right. If he did cost Whole Foods the merger with Wild Oats, maybe he should forgo his salary of $1 a year. (That is not a typo). He should be grounded from the corporate plane. Oh, I forgot - there is no corporate plane. John Mackey always flies commercial.

In many ways, the company practices good corporate governance. They release every conceivable piece of financial data. Each store keeps a notebook with all employees' (including top executives’) compensation in it. Executive pay is limited to no more than 14 times front line pay. The lowest paid worker makes $13.15 an hour plus benefits. The company claims that 94% of all options are issued to non-executives. Front line employees decide their own health insurance.

My advice to John Mackey is to eat meat. Maybe being a vegan has affected his brain functions. It is only excuse that I can find for his stupid but not criminal or malicious behavior. Before the press tightens the noose, they should reread my favorite quote of John Mackey: “There is no inherent reason that a business can not be ethical, socially responsible and profitable.”

As for the stock, I cannot get excited about it. Everybody knows that the grocery business is a low margin business. So why is the stock selling at 29 P/E when Walmart, the nation’s largest supermarket, is selling at an 18 P/E ratio?

The organic and natural food business, in general, is growing by leaps and bounds. Analysts predict a superior growth rate for Whole Foods. But it has disappointed in the last two quarters.

Source: Whole Foods' Mackey: Eat Meat, But Don't Go