Whole Foods CEO Mackey's sock puppet

John Mackey is an interesting cat. I wonder if this stock pumping pseudo-scandal took place during working hours? Well, he only gets paid a dollar a year anyway.


Whole Foods CEO Mackey Posted Comments on Stock Message Board - WSJ.com:
In January 2005, someone using the name “Rahodeb” went online to a Yahoo stock-market forum and posted this opinion: No company would want to buy Wild Oats Markets Inc., a natural-foods grocer, at its price then of about $8 a share.

“Would Whole Foods buy OATS?” Rahodeb asked, using Wild Oats' stock symbol. “Almost surely not at current prices. What would they gain? OATS locations are too small.” Rahodeb speculated that Wild Oats eventually would be sold after sliding into bankruptcy or when its stock price dipped below $5. A month later, Rahodeb wrote that Wild Oats' management “clearly doesn't know what it is doing... OATS has no value and no future.”

The comments were typical of the banter on Internet message boards for stocks -- but the identity of the writer was anything but. Rahodeb was the online pseudonym for John Mackey, co-founder and chief executive of Whole Foods Market Inc. Earlier this year, his company agreed to buy Wild Oats for $565 million.

For about eight years until last August, Mr. Mackey posted voluminous messages on Yahoo's stock forums as Rahodeb, the company confirms. The moniker is an anagram for Deborah, which happens to be the name of Mr. Mackey's wife. Rahodeb routinely cheered Whole Foods' financial results, trumpeted his personal gains on the stock, and bashed Wild Oats.

Rahodeb even defended Mr. Mackey's haircut when another user poked fun at a photograph in Whole Foods' annual report. “I like Mackey's haircut,” Rahodeb said. “I think he looks cute!” ... Rahodeb began posting messages about Whole Foods shares on Yahoo.com in the late 1990s. He quickly gained a reputation as being one of the stock's biggest cheerleaders, and gamely defended himself when other posters chastised him for being too rosy. “I've never pretended to be anything but enthusiastic about WFMI,” he wrote in 2000, using Whole Foods' stock symbol. “I admit to my bias -- I love the company and I'm in for the long haul. I shop at Whole Foods. I own a great deal of its stock. I'm aligned with the mission and values of the company... Is there something wrong with this?”

Rahodeb often expressed pride in the work of Mr. Mackey. “While I'm not a 'Mackey groupie,' ” he wrote in 2000, “I do admire what the man has accomplished -- building a $1.6 billion business from scratch is quite an achievement.” He then asked another user, “whtmewrry 99,” what he or she had accomplished by comparison.

My aunt used to work in the online department of Whole Foods in Austin, “developing communities” or some such technobabble, she probably has a few tales to tell. In fact, I've heard some, but won't bother relating second hand gossip.

Mr. Mackey, a 53-year-old vegan, co-founded Whole Foods in 1980. He built the Austin, Texas, company into the world's largest organic and natural-foods grocer, in part by acquiring many smaller chains. Like Whole Foods itself, Mr. Mackey is unconventional. He slashed his annual salary to $1 starting last January, explaining later that “this is what my heart is telling me is the appropriate thing to do right now.” Outspoken and opinionated, he writes his own blog on the company's Web site.

Love Mackey or hate 'em (or neither option: I just shop there), he certainly is not a typical executive. Can you imagine Jack Welch writing this?

From his blog post about raising the ratio of executive pay to average employee pay

This will be the third time we have raised our salary cap since we created one about 20 years ago. The original salary cap was set at 8 times the average pay. It was raised to 10 times the average pay in the early 1990's and raised again to 14 times the average pay in 2000. This increase to 19 times the average pay remains far, far below what the typical Fortune 500 company pays its executives. As you can see from the following chart, the average CEO received 431 times as much as their average employee received in 2004, while the Whole Foods Market CEO (me) received only 14 times the average employee pay in cash compensation.

Most large companies also pay their executives large amounts of stock options in addition to large salaries and cash bonuses. However, this is not the case at Whole Foods Market. As the chart below indicates, the average large corporation in the United States distributes 75% of their total stock options to only 5 top executives with the remaining 25% going to everyone else in the company (actually most of the remaining 25% goes to the next level of executives below the top 5). At Whole Foods, the exact opposite is true: the top 16 executives have received 7% of all the options granted while the other 93% of the options have been distributed throughout the entire company with all Team Members eligible for a grant after 6,000 hours of service to the company.

The second part of today's announcement has to do with my own compensation. While it has become necessary to raise the salary cap at Whole Foods to help ensure the retention of our key leadership, this is not true in my case. The tremendous success of Whole Foods Market has provided me with far more money than I ever dreamed I'd have and far more than is necessary for either my financial security or personal happiness. I continue to work for Whole Foods not because of the money I can make but because of the pleasure I get from leading such a great company, and the ongoing passion I have to help make the world a better place, which Whole Foods is continuing to do. I am now 53 years old and I have reached a place in my life where I no longer want to work for money, but simply for the joy of the work itself and to better answer the call to service that I feel so clearly in my own heart. Beginning on January 1, 2007, my salary will be reduced to $1 per year and I will no longer take any other cash compensation at all. I will continue to receive the same benefits that all other Team Members receive, including the food discount card and health insurance. The intention of the Board of Directors is for Whole Foods Market to donate all the future stock options I would be eligible to receive to our two company foundations – The Whole Planet Foundation and The Animal Compassion Foundation. In case there is some technical, tax, or legal reason why these stock options cannot be given to our two foundations, then I will retain future option grants and will pledge to donate 100% of the gain from those options to the foundations. This donation of future options received doesn't apply to the stock options already issued to me prior to January 1, 2007.

One other important item to communicate to you is, in light of my decision to forego any future additional cash compensation, our Board of Directors has decided that Whole Foods Market will contribute $100,000 annually to a new Global Team Member Emergency Fund. This money will be distributed to Team Members throughout the company based on need when disasters occur (such as Hurricane Katrina last year). The money will be placed in a special account and any money not distributed in any particular year will roll over and be added to the following year's contribution. We are still working on the exact way Team Members will be able to access this money. The first $100,000 will be deposited on January 1, 2007.

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This page contains a single entry by swanksalot published on July 11, 2007 5:05 PM.

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