Relentless Wall Street Billionaire Has a Secret Cause
By Cara Lombardo, Feb. 8, 2022, WSJ

Carl Icahn, the billionaire investor known for his relentless
campaigns against CEOs and rivals, has a secret cause that he
has pursued for a decade.

In 2012, McDonald’s Corp. pledged to stop buying pork for its
Bacon McDouble cheeseburgers, McRib sandwiches and the like by
2022 from producers who use small crates to constrain pregnant
swine. Left unmentioned was that Icahn had pushed for the change
behind the scenes.

A decade on, Icahn has concluded the original promise was hogwash. McDonald’s now often has its producers move pigs out of the
containers only after confirming they’re pregnant. Many wait to
do so until the sows are four to six weeks into their 16-week
pregnancies. Icahn had expected the use of so-called gestation
crates to be banned altogether.

The man who helped send TWA into bankruptcy and partly inspired
Gordon Gekko, the ruthless corporate raider in “Wall Street,” is
spending a lot of time advocating for better treatment of pigs,
using many of the same tactics.

Icahn got involved with the Humane Society of the U.S., which is
leading the push, at the behest of his daughter, Michelle Icahn
Nevin, a vegetarian animal-lover who was working there at the time.
He learned details of the pigs’ plight when he hosted a Humane
Society executive for dinner at his Manhattan penthouse. The
nonprofit was having trouble getting McDonald’s to take action
until it corralled Icahn.

“Animals are one of the things I feel really emotional about,”
says Icahn. He and his wife have three small dogs. He says he
feels particular affection for pigs, pointing to their intelligence.
A recent study suggested a kinship with humans by showing pigs can
play videogames with their snouts.

McDonald’s declined to comment on the difference in the inter-
pretation of the 2012 pledge. It said in a written statement that
more than 60% of its U.S. pork is sourced from “confirmed pregnant
sows” not housed in gestation crates, and it expects that figure to
be 85% to 90% by the end of this year.

It said industrywide challenges including outbreaks of swine
disease and the Covid-19 pandemic delayed producers’ ability to
meet the original timeline. As a result, the company said, it has
extended it to 2024.

The company said that it maintains an active dialogue with Icahn
and the Humane Society.

Icahn, who turns 86 next week, until now hasn’t waded into the
socially conscious investing trend sweeping Wall Street. He is
more often seen slinging mud at what he views as greedy CEOs and
docile boards, and has amassed an estimated $17 billion fortune
doing so.

He once called Bill Ackman a “major loser” on live TV in a face-off
over Herbalife Nutrition Ltd. , and said he wouldn’t do business
with his rival shareholder activist if he were the last man on Earth.
Ackman said at the time that Icahn “either has a very, very bad memory
or he has trouble with the truth.”

Icahn called Michael Dell, with whom he clashed over the buyout of
the eponymous PC maker, a “bamboozler” who tried to “swindle share- holders.” Mr. Dell called Mr. Icahn a “circus clown.”

Icahn, who moved to Florida in 2019 from New York in search of warmer
weather and lower taxes, typically scoops up hundreds of millions
worth of shares in the companies he targets and pushes them to make
changes to boost their stocks. One of his most successful bets, on
Netflix Inc., made him a $2 billion profit in 2015.

In the case of McDonald’s, he owns only roughly 100 shares, or about
$26,000 worth, which he bought recently. That is about 0.008% the
size of his initial investment in Netflix.

Icahn has already threatened privately to run a proxy fight for
board representation, according to people familiar with the matter.
It’s a threat he’s followed through on at other companies, though
not usually with such a small share holding.

McDonald’s has been conferring with Wall Street advisers to help
should he launch a full-fledged campaign over how its sausage is
made, people familiar with the matter said.

On a recent phone call with McDonald’s CEO Chris Kempczinski,
Icahn bristled at the company’s interpretation of the pledge,
which banned using the stalls to house pregnant sows. “You’re
just hiding behind the word pregnant,” Icahn told the CEO. “When
you keep injecting semen into the sow every day, you don’t think
she’s going to be pregnant?”

Gestation crates are typically about two feet wide and prevent
sows from turning around, maximizing use of available space. Some
producers say it also prevents the pigs from harming one another.
Breeding pigs can produce seven or more piglets per litter, totaling
well over 60 piglets in consecutive pregnancies over a few years.

Massachusetts and California have outlawed the sale of pork
produced using such crates in most circumstances. Some brands say
they don’t use them at all, including Applegate Farms and Niman
Ranch. The parent company of McDonald’s rival Burger King,
Restaurant Brands International Inc., has set a goal to eliminate
the use of crates for both pregnant and nonpregnant sows.

Widespread use of gestation crates began in the 70s as pork
producers gave priority to efficiency. A 1978 article in the
industry publication National Hog Farmer suggested producers
consider the sow “a valuable piece of machinery whose function
is to pump out baby pigs like a sausage machine.”

“Under that mind-set, the industry went, no pun intended,
hog wild into moving pigs into gestation crates,” says Matthew
Prescott, senior director of food and agriculture for the Humane
Society, who has been focused on eliminating the crates since 2002.

Icahn’s interest in McDonald’s doesn’t extend to eating its
products (his tastes run more toward vodka martinis and penne
pasta). He thinks he ate at McDonald’s once, roughly 20 years ago.

https://www.wsj.com/articles/carl-icahn-mcdonalds-pigs-gestation-crates-11644335198

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