Activist investor Carl Icahn launched a broadside against one of America’s largest retailers, accusing Kroger of having “condoned cruelty towards those who are the most defenceless” by failing to tackle animal welfare concerns and underpaying staff.
Icahn, 86, accused the chain’s board of being “completely tone-deaf” to concerns around the use of “torturous devices” such as gestation crates, which prevent sows from turning around.
The billionaire claimed Kroger’s policies were causing “needless distress” as he put forward two candidates for seats on the company’s board. Kroger said it expects suppliers to have “transitioned away” from gestation crates by 2025.
The company has overseen a “mockery of meritocracy” by paying its chief executive 900 times as much as workers, Icahn said. It is a “quintessential example of why capitalism and business get a bad rap and people are disillusioned with the American Dream”.
Established in 1883 and based in Cincinnati, Ohio, Kroger has almost 2,800 stores across 35 states and a market value of $41 billion. Its shares were up by 0.2 per cent at $56.58 yesterday.
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Icahn raised animal welfare, an issue on which he is also challenging McDonald’s, with Rodney McMullen, Kroger’s chairman and chief executive on Friday. “It remains clear, however, that our perspectives concerning Kroger are very much at odds,” Icahn wrote in an open letter to McMullen, 61.
Kroger is “conducting itself in ways which are unconscionable”, Icahn wrote, “flagrantly side-stepping financial obligations to workers who don’t make a fair wage (while you received $22.4 million dollars in 2020)”.
The company said it was “not directly involved in raising or the processing” of animals, but is “committed to helping protect” their welfare. It has raised the average wage of its staff by a quarter to $17 an hour over the last four years, a spokesman added. “Kroger’s CEO compensation is both market and shareholder aligned, and the majority is at-risk and performance-based.”
