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Carl Icahn's Redemption Arc
we must hold Vanguard and BlackRock to account
I dated a vegan girl once, and she made me swear up and down that I would use my Substack platform to highlight animal rights issues. Of course I said yes… what am I going to say, “no”? Consider this article, then, me keeping that promise.
That being said, if you are a vegan, I strongly advise you *do not* read this article since it gets into the details of factory farming.
Many effective altruists argue that factory farming causes more suffering than anything else in the world. It is hard for me to disagree with this. Here is a terrific essay on factory farming by The Centre for Effective Altruism.
I was curious to see what the factory farming Substack scene was like, and it turned out to be thriving. Please consider subscribing to these independent writers:
The problem with promising this girl that I would write about animal rights was that I didn’t… really… have anything to say. I didn’t have a unique angle, nor was I an expert. I toyed with the idea of writing an article called “Factory Farming is a Crime Against Nature,” in which I generally rant against the evils of factory farming for a few thousand words, but it felt rather aimless, so I shelved it. No need to force it. Sun Tzu said “If you wait by the river long enough, the bodies of your enemies will float by” and I find this philosophy to be true in the investigative journalism game. Just by living my life I sometimes organically stumble upon the opportunity to advocate for certain topics that I am keeping an eye out for.
The first opportunity was 3 months ago, about a chimp in Missouri:
Today it is about Carl Icahn, an 86-year old Jewish billionaire from Queens, New York.
Not that this is an exclusive scoop, or anything. This is just my take on the situation. This story is already out there, floating around in bits and pieces, but I felt it was worth writing because I feel I am able to arrange these bits and pieces in superior way than the mainstream media ever did, or could.
Without googling it, do you know who Carl Icahn is?
Forbes ranks him as the 106th richest person in the world.
He made his bones as a corporate raider on Wall Street in the 80s, and legend has it that he was the inspiration for Gordon Gekko in the 1987 movie Wall Street. More recently you may know him from his feud with Bill Ackman which was turned into a Netflix documentary Betting on Zero, or from the 2022 HBO documentary Icahn: The Restless Billionaire.
I am not going to delve into every shady business dealing he has been involved with over the past 50 years… there are too many insider trading probes, leveraged buyouts, proxy fights and hostile takeover to count.
He reminds me of Logan Roy from Succession.
I at least admire Icahn’s honesty — he doesn't pretend to be anything other than a ruthless prick. He has leaned into his role as a heel, some might even call him an anti-hero. Contrast this with, say, Warren Buffet, who is every ounce as ruthless and bloodthirsty as Icahn but obsessed with astroturfing his “cuddly harmless warm grandpa” image.
When Trump ran for President in 2015, he named Carl Icahn as his Treasury Secretary… but later reneged on this offer for some reason? I was unable to figure out why.
The mainstream media has mostly ignored this story about Icahn and the pigs simply because they don’t have a financial incentive to cover it. The general public don’t want to be lectured about the evils of factory farming for the umpteenth time — it’s one of those topics that sadly just doesn’t drive clicks. People prefer to ignore it.
Case in point: Carl Icahn has 440,000 followers on twitter and all he ever tweets about is pig welfare, yet he only ever gets a handful of retweets. Nobody cares. His tweets fall on deaf ears. Here is one of the better performing ones… only 34 retweets:
Here is the Wall Street Journal covering it… their twitter account has 20 million followers! The article only got 24 retweets, despite it being an exclusive scoop.
Same with the New York Times coverage… fell flat. 5 retweets.
Probably it is an editorial mistake, then, for me to cover a story that has already proven to be a dud! But that is precisely what makes it so compelling. Nobody cares about Icahn's fight for pig welfare… but he keeps fighting it anyways.
Even if the whole point of Icahn’s pig jihad is to trick gullible journalists like Karlstack, the NYT & WSJ into praising him so that he can build his legacy as a good guy, so be it. He is making the world a better place by picking a fight with McDonald’s. He deserves some positive press coverage, even if all I can offer him is 5,000 eyeballs.
Subscribe to Karlstack to become eyeball #5,001!
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Episode 1: McDonald’s
Roughly 1% of all pigs in the USA are eventually turned into a McDonald’s product.
There are ~6 millions breeding sows in the USA and 80% of them are confined in a 2-foot wide cage for the entirety of their pregnancies. Here are 3 pictures of gestation crates, if you have the stomach for clicking on them: one, two, three.
Gestation crates are a crime again nature. Ian Duncan, an animal welfare scientist, describes them as “one of the cruelest forms of confinement devised by humankind.”
Senator Bernie Sanders, on the other hands, thinks they aren’t thaaaaat bad, we should focus on more important things, like whether or not McDonald’s workers are unionized.
HEY BERNIE! Factory farming is a much greater crime than McDonald’s not forming a union. People can choose to work elsewhere else if they don't like the working conditions provided by the employer they willingly entered into a contract with.
Pigs can’t choose.
Here are 2 great Substack deep-dive on gestation crates.
These 2 articles walk through the case of Smithfield Foods, a pork producer who promised in 2007 that they would phase out gestation crates within 10 years, but when 2017 arrived, failed to keep their promise, and then lied and tried to cover up their failure.
That is now what is happening with McDonald’s. Déjà vu.
10 years ago, acting at the behest of his vegetarian daughter, Icahn forced McDonald’s to announce that they would phase out gestation crates within 10 years. Fast forward to 2022 and McDonald’s has failed to keep that promise. They have pushed their gestation crate deadline back by at least 2 more years.
This pisses Icahn off. He argues that McDonald’s have dragged their feet on this pig welfare commitment and shifted the goalpost at every opportunity, and are playing games with definitions; for example, McDonald’s suppliers only move pigs out of gestation crates once they’re confirmed pregnant.
“You’re just hiding behind the word pregnant,” Icahn told the McDonald’s CEO. “When you keep injecting semen into the sow every day, you don’t think she’s going to be pregnant?”
Another wordgame McDonald’s plays is that their original promise of “pigs will never be in a gestation crates” has since evolved into “never being in gestation crate more than three months every year.”
The Proxy Fight
For those unfamiliar with Carl Icahn, his whole schtick is that he is an activist investor.
The way he generates value for companies (and for himself) is that he buys a stake in the company, and once he has a big enough stake, he installs his own leadership team. This new leadership team is charged with taking the company in a fresh direction, a direction which will presumably maximize value for shareholders.
That is exactly what Icahn did here… activist investing… except with no profit motive! Icahn picked a fight with the most powerful restaurant in the world and nominated 2 of his own people to the McDonald’s board, launching a vicious proxy battle, simply because he cares about pig welfare. That’s heroic.
Normally when Icahn launches a proxy battle he will own at least, like, 5% of the target company’s outstanding shares, so that he has a powerful vote. But in this case he only owns 200 shares, or $50,000 worth, of McDonald’s stock. He barely has any tangible voting power. What these shares give him, though, is a voice… and Icahn’s voice is all that he needs. It’s the most influential voice on Wall Street***.
*** or should I say the most influential voice in Florida! Icahn moved his hedge fund from NYC to Miami during the pandemic.
If you want to quantify how much Icahn’s voice is worth, consider that McDonald’s wrote in a regulatory filing that they expected to spend $16,000,000 USD in the proxy fight against these 200 measly shares.
“Can’t McDonald’s find better ways to spend that kind of money?” Icahn retorted. “In more simple terms, how many pigs would be spared the torture of gestation crates if the $16 million were spent on that?”
Here were some of McDonald’s’ talking points:
Icahn is “pushing single-platform nominees” at the expense of “valuable directors.”
“It also presents a cost challenge … it significantly increase those costs, placing a burden on all aspects of our business, our supply chain and McDonald’s customers.”
In my opinion, customers would be happy to pay an $0.01 for bacon on their burger if they knew the bacon wasn’t tortured.
McDonald’s says that they can’t meet their pig welfare commitment because they are busy dealing with the Covid-19 pandemic as well as an African swine fever outbreak.
McDonald’s does not directly own any sows or produce or package pork.
“The definition of ‘crate-free’ … is so obscure that it represents an extremely niche market.”
“Icahn would be economically divorced from the potential impact of its proposals on the company’s financial support.”
“the current pork supply in the U.S. would make this type of commitment impossible”
“[Icahn’s proposal] reflects a departure from the veterinary science used for large-scale production throughout the industry.”
Yeah… this is a “departure from the veterinary science.” That’s the whole point. The current paradigm of veterinary science as it relates to factory farming is evil. It needs to change.
Excuses, excuses, excuses.
Tell it to the millions of pregnant pigs currently locked in their own personal torture chambers.
I know for a fact that these excuses are all bullshit because Whole Foods (A.K.A. Amazon) has been relying on gestation-crate-free supply chains since 2003. If Whole Foods could do it 20 years ago, McDonald’s can do it now if they really wanted to.
A Defeat… Followed By A Partial Victory?
Icahn’s 2 nominees to McDonald’s board failed spectacularly, only garnering support from 1% of the company’s outstanding shares. On the face of it, this is a huge loss. But maybe not. Maybe something tangible came of this crusade. A few months after getting crushed 99 to 1, the McDonald’s board member who Icahn was targeting to be replaced, Sheila Penrose, retired.
Sheila Penrose was in charge of McDonald’s’ sustainability and corporate responsibility committee.
After she retired, media speculated whether or not she was pushed out because of Icahn. Nobody had any proof. These articles are saying that Icahn did A, and then B happened, but they can’t prove that A caused B.
McDonald’s did not comment on why Penrose is retiring.
She looks old enough to retire, I guess, and she had served on the board for 15 years, so it is plausible that she is just organically retired. I like to think that Icahn pushed her out, but I have no proof.
Here is Sheila Penrose talking at the World Economic Forum.
I read the McDonald’s SEC filing.
This filing states that, '“Mr. Icahn … is the majority owner of Viskase, a company that produces and supplies packaging for the pork and poultry industry. Mr. Icahn’s ownership provides him with unique exposure to the industry-wide challenges and opportunities in migrating away from gestation crates. Thus, it’s noteworthy that Mr. Icahn has not publicly called on Viskase to adopt commitments similar to those of McDonald’s 2012 commitment.”
Wow, shots fired.
Is this true?
I checked, and yes, Icahn Enterprises owns 71% of Viskase, a huge meat company. Here is what the Viskase website looks like. They are definitely a company centered around pork:
Here is where alarm bells start going off in my head… Icahn owns a huge meat company that produces the tubes that pork is packaged in?
And Icahn’s meat company supposedly treats animals worse than McDonald’s?
McDonald’s has the best lawyers in the world, I strongly believe that the wouldn’t just throw around an accusation like that if there weren’t at least some kernel of truth to it. They wouldn’t just make up accusations about pig welfare standards out of thin air, and file it with the SEC. Would they?
If what McDonald’s alludes to is true, it is a big deal, because then Icahn is a flaming hypocrite. If what McDonald’s alludes to is false, then that is also a huge deal, because that would mean McDonald’s lied for no reason to the SEC.
I tried to get to the bottom of this, but was stonewalled. I repeatedly tried to contact Viskase and McDonald’s but neither answered me.
Viskase’s core company values are integrity and trust, collaboration & teamwork, customer focus, sustainability, commitment to excellence. Odd case. A meat company that goes out of its way to never mention meat or animals.
I conclude that if Carl Icahn were truly a good person who cared about pigs rather than PR, he would dictate that Viskase must immediately cease doing any business with any company that profits from gestation crates in any way, shape, or form.
But he won’t do that… will he?
If I may be so bold as to compare this crime against nature, gestation crates, to a crime against humanity, chattel slavery. What Icahn is doing here is akin to opposing slavery in public, while building & selling & operating slave ships in private.
It’s pretty gross. But again, this grossness all depends on whether or not McDonald’s’ allegations about Viskase are true, or were they just slander/libel?
In any case, McDonald’s called Icahn a hypocrite in front of the whole world, and Icahn never responded to this charge (maybe he said something about it somewhere, I never found a response).
His silence speaks volumes.
Episode 2: Kroger
One month after losing his McDonald’s fight, Icahn picked the exact same fight with Kroger, the United States' largest supermarket operator. He lost that fight too.
The Bigger Picture
In an SEC filing, Icahn hints that this whole episode wasn’t really about attacking McDonald’s… it was about attacking BlackRock and Vanguard.
I want to shine a light on what may be the biggest hypocrisy of our time: a large number of Wall Street firms and their bankers and lawyers appear to be capitalizing on ESG to drive profits without doing nearly enough to support tangible societal progress. These players seem to be engaged in a cover-up to downplay their ESG-related economic incentives and promote their purported social impact. Clearly, the ESG status quo on Wall Street needs to change.
I believe the world’s largest asset managers, who collectively possess immense influence due to their trillions of dollars in capital, must stop subjectively selecting which ESG principles are important. The reality is that if the ESG movement is to be more than a marketing concept and fundraising tool, the massive asset managers who are among McDonald’s’ largest owners must back up their words with actions. While many ESG policies cover a host of sustainability and supply chain issues, it is unacceptable and irresponsible that major asset managers have put such little emphasis on animal welfare in their stewardship and voting guidelines. It is my hope that in this election contest, these ESG proponents will finally champion animal welfare as vigorously as other issues and join me and others in promoting positive change at McDonald’s for all the world to see.
— Carl Icahn
I use “Blackrock and Vanguard” as a crude stand-in for the entire ESG industry for the sake of brevity. These 2 companies own ~14% of McDonalds and 20% of the Kroger supermarket chain.
BlackRock & Vanguard own even bigger chunks of the meat industry.
BlackRock & Vanguard could use their influence to end all of the cruelest factory farming practices in the world TOMORROW if they decided to aggressively crusade against them. Instead, BlackRock & Vanguard decides to aggressively crusade for pronouns, diversity, and all things globohomo.
I am torn over whether or not BlackRock + Vanguard + McDonald’s should be forced by the government to end the use of gestation crates. On one hand, it would save the pigs. On the other hand, this is basically fascism — the state compelling private companies to act in the manner the state commands. Is ecofascism justified to save pigs? Which is the greater evil: fascism, or factory farming?
Is it more ethical to invest in Viskase, or Raytheon?
Look: we are aren’t going to solve the ethics of ESG in this Substack article. All I am saying is that BlackRock’s corporate values are completely out of whack. They are focusing on woke shit when they should be focusing on the torture of animals. But nobody cares about pigs, and woke shit is sexy right now, so Blackrock keeps shoving woke shit down western civilization’s throat.
BlackRock's CEO insists that their penchant for aggressively pushing wokeness on western civilization isn't "woke" - it’s just good business.
Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not “woke.” It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism.
Hey Fink, maybe you should stop “harnessing the power of capitalism” to implement mandatory racial quotas and start “harnessing the power of capitalism” to stop torturing pigs, you psychopath. I am glad that Carl Icahn called out your bullshit.
The whole ESG industry is built on bullshit.
If Carl Icahn can bully the ESG industry into ending the torture of millions of pregnant pigs, in my books he will have redeemed himself for his lifetime of greed and plunder. His sins will have been washed away. Keep up the fight, Carl, McDonald’s was episode 1, Kroger was episode 2, and I am looking forward to episode 3.
Remember that girl I mentioned in the first line of this article who I made a promise to? Her favorite charity in the world is Farm Animal Refuge, a 501 (c) (3) Public Charity and shelter in California for abused, neglected, and unwanted farm animals. I know for a fact that she follows all the goats, pigs, and cows on Instagram and knows all of their names.
As far as effective altruism goes, this gets as close to “praxis” as you can possibly get. This is effective altruism in the real world. Every dollar donated to Farm Animal Refuge goes directly towards alleviating the suffering caused by factory farming, and towards providing a happy, long, loving life for survivors.
I have to imagine there is a chance Carl Icahn is reading this article, or at least his enemies are. Billionaires read news about themselves. Carl, if you are reading this: you can’t fix all the problems in the world. You can’t help all the pigs. But you can help all of the pigs who live at Farm Animal Refuge. You can keep this beautiful charity fueled for years — decades, even — by offhandedly donating the amount that you piss away every morning. Please consider making a charitable donation to Farm Animal Refuge.
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