How the Sausage is Made

🐷 McDonald’s on Sunday confirmed that billionaire activist investor Carl Icahn has nominated two members to its board of directors in a push to change the way the company’s pork suppliers treat pregnant pigs.

• In 2012, McDonald’s promised to phase out the practice of keeping pregnant sows in small gestational crates. The WSJ revealed earlier this month that Icahn had quietly pushed for that change behind the scenes.
• Now, the Humane Society and Icahn – whose daughter used to work there – are claiming the fast-food giant is simply working to reduce the practice rather than end it.
• In a statement McDonald’s said it expects to source 85% to 90% of its US pork volumes from “sows not housed in gestation crates during pregnancy” by the end of this year, and 100% by the end of 2024.
• The company also mentioned that Icahn is a majority owner of pork supplier Viskase and hasn’t publicly called on them to adopt similar commitments.

🧠 In the know: Icahn reportedly owns just 200 McDonald’s shares (worth ~$50,000). The activist investor typically acquires eight- or nine-figure stakes in the companies he targets.

It’s unusual for activist investors with such a small stake to gain traction. But last spring, a hedge fund called Engine No. 1 won three seats on Exxon Mobil’s board – despite holding just a 0.02% stake in the company – after arguing it should commit to carbon neutrality.