Kroger is activist Carl Icahn's latest target in his push for better pig treatment

Mar. 29, 2022 4:38 PM ETThe Kroger Co. (KR)MCDBy: Joshua Fineman, SA News Editor41 Comments

Kroger Supermarket. The Kroger Co. is One of the World"s Largest Grocery Retailers.

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Activist billionaire Carl Icahn is targeting Kroger (NYSE:KR) and has nominated two directors to the supermarket chain's board as he pushes for humane treatment of pigs following a similar effort at McDonald's (MCD).

Icahn has submitted an intent to nominate two director candidates – Alexis C. Fox and Margarita Paláu-Hernández - to the board, according to a Kroger statement. Icahn owns about a 100 shares, according to a Bloomberg report.

The Kroger potential proxy contest comes after Icahn last month nominated two board members at McDonald's amid a dispute with the company over its treatment of pigs. The billionaire wants McDonald's to stop using pork that is sourced from gestation crates, something that he first brought up with the fast food giant around 2012. Icahn owns about 200 shares of McDonald's, the fast food chain said last month.

"Our concerns regarding Kroger’s governance go beyond animal suffering and other terrible practices taking place at industrialized factory farms – that are supported by Kroger’s patronage," Icahn wrote in a letter to Kroger CEO Rodney McMullen. "Kroger’s inaction towards creating meaningful animal welfare policies and verification methods is totally out of step with consumer desire and current legislation."

Kroger said that Icahn first contacted the company on Friday, only days before he submitted his intent to nominate two director candidates. During the talks with the supermarket chain, Icahn voiced his concerns regarding animal welfare and the use of gestation crates in pork production.

"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." Kroger said in the statement. "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."

Icahn is also concerned about the disparity between the compensation of Kroger CEO McMullen and the supermarket chain's median worker.

"The wage gap between the CEO and median worker at Kroger is unconscionable," Icahn wrote. "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."

Details of the letter were earlier reported by CNBC's Scott Wapner.

Last week, Icahn said McDonald's appears to have a `rubber stamp' board.

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