… But shareholders and corporate accountability advocates quickly fire back in new SEC filing!
VOTE NO leaders IASJ and Majority Action cite Wendy’s “continued silence on potential connections between its supply chain and forced labor” as key element in closing argument.
As we shared last week — and again just yesterday in leading business publication the Financial Times — the growing support in the financial world for the shareholder-led campaign to VOTE NO on Wendy’s Board Chair Nelson Peltz received a big boost last week: the recommendation by leading proxy advisor service Glass Lewis that shareholders vote AGAINST Peltz.
Glass Lewis’ decision to advise shareholders to “Vote No on Peltz” was a massive development in the campaign to hold Wendy’s Board of Directors accountable for the company’s failure to take its shareholders’ human rights concerns seriously because of the influential position of proxy advisor services like Glass Lewis occupy in the powerful, but obscure, financial universe. Given the sheer number of shareholders at any given corporation, and the wide range of issues that can come up for a vote at any given annual meeting, organizations like Glass Lewis provide the invaluable service of advising millions of shareholders on how to vote on issues that they might otherwise have little or no idea how to judge, issues whose merits, however obvious to the informed observer, might escape the typically more detached shareholder. Glass Lewis does the analysis for their clients — who include the majority of the world’s largest pension plans, mutual funds, and asset managers, collectively managing over $40 trillion in assets — and their clients take their recommendations seriously.
But you don’t have to take our word for how important the Glass Lewis recommendation was—just ask Wendy’s. Because Wendy’s was apparently concerned enough that it penned its own letter, filed with the SEC for all Wendy’s shareholders to see, “to respond directly to the Glass Lewis proxy paper.”
And when did Wendy’s file this letter? On May 12—the same day that CIW was rallying in front of Peltz’s office in New York City, where New York City Comptroller Brad Lander showed up to tell the world that New York City’s Public Pension Funds were “proud” to be casting their votes as shareholders AGAINST Nelson Peltz. As of March 2022, those pension funds held over $263 billion in total assets, making them a shareholder Peltz and Trian can’t afford to ignore.
Despite filing its 11th-hour plea less than a week before tomorrow’s shareholder meeting, Wendy’s letter did not go unanswered. As you may recall, the VOTE NO campaign launched with an SEC filing by two respected players in the world of shareholder activism: Investor Advocates for Social Justice (IASJ), which represents the faith-based shareholders who filed the 95%-shareholder-approved transparency resolution at the center of all this, and Majority Action, a leading corporate accountability non-profit. And yesterday those same two players—IASJ and Majority Action—filed a response to Wendy’s.
The IASJ and Majority Action response is worth reading in its entirety, but below is an excerpt of its closing message:
… Wendy’s has chosen not to join the Fair Food Program, unlike its major peers. This places the onus on the company to disclose how its approach is effective in managing human rights risks in its food supply chain. The company continues to fail to disclose critical information that would enable shareholders to assess Wendy’s approach, including specific information explicitly requested in the Resolution’s resolved clause, such as all third-party auditors the company has approved, how often those auditors visit supply chain locations, and how those auditors engage with workers at those locations.
Given the company’s refusal to engage with the proponent after the Resolution received overwhelming support, and its continued refusal to disclose information explicitly requested by the resolved clause in the Resolution—as well as the company’s continued silence in the Letter on potential connections between its supply chain and forced labor that were set forth clearly in Proponent’s Solicitation—shareholders can have no confidence in the Board’s ability to adequately oversee and manage human rights risks in its food supply chain.
Check out the Majority Action/IASJ response to Wendy’s in its entirety here. And check back soon for news from Wendy’s annual meeting, as the big vote to send a message to Wendy’s — that it’s time to take shareholders’ concerns about fundamental human rights protections in its supply chain seriously — takes place tomorrow!
