THE WENDY'S COMPANY | Independent board chair at THE WENDY'S COMPANY

Status
30.09% votes in favour
AGM date
Previous AGM date
Proposal number
6
Resolution details
Company ticker
NASDAQ: WEN
Lead filer
New York City Office of the Comptroller
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Shareholder rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
RESOLVED: Shareholders of The Wendy’s Company (“Wendy’s”) ask the Board of Directors (“Board”) to adopt a policy, and amend the bylaws as necessary, to require the chair of the board to be independent of Wendy’s and any Wendy’s shareholder holding more than 15% of outstanding shares. The policy should provide that if the Board determines that a Chair who was independent when selected is no longer independent, the Board shall select a new Chair who satisfies the policy within 60 days of that determination. This policy shall apply prospectively so as not to violate any contractual obligation.
Supporting statement
SUPPORTING STATEMENT

In our view, Wendy’s Board needs an independent Chair to strengthen its independence from Wendy’s largest shareholder, Trian Fund Management, L.P. (“Trian”), and its responsiveness to investor concerns. Nelson Peltz, Trian’s Chief Executive Officer, is Chair of Wendy’s Board.

As long-term shareholders, we are troubled by Peltz’s conflicts of interest AND seemingly disproportionate influence over Wendy’s Board, whose members include his son, Matthew Peltz, and his longtime business partner, Peter May. It is noteworthy that the Board classified Peter May as an independent director in its 2022 proxy statement

A serious conflict of interest arose in May 2022 between Wendy’s and Trian, when Trian filed a Schedule 13D/A with the Securities and Exchange Commission indicating its intent to evaluate the possibility of participating in a potential transaction with Wendy’s. The potential for a related party transaction compromises the independence of all three Trian partners who are Wendy’s directors: Chair Nelson Peltz, Matthew Peltz and Peter May.

Exacerbating these concerns are Chair Peltz’s unresponsiveness to extensive shareholder outreach1 regarding Wendy’s supply chain labor standards. Under Peltz’s leadership, Wendy’s Board has inexplicably refused to permit Wendy’s to join the Fair Food Program (“Program”), the gold standard for preventing human rights abuses (such as human trafficking, sexual assault, and harassment) in the produce supply chain. Most of Wendy’s competitors, including McDonald’s and Burger King, joined years ago. The Program has received the Presidential Medal for Extraordinary Efforts in Combatting Modern-Day Slavery2 and is credited with transforming Florida tomato farms once called “ground zero for modern day slavery”3 into “probably the best working environment in American agriculture.”4

Companies with independent chairs are corporate governance and sustainability leaders. A 2021 report found that more than half of the companies listed on the MSCI ESG index at the time had independent chairs.5 In Fortune’s recent

DISCLAIMER: By including a shareholder resolution or management proposal in this database, neither the PRI nor the sponsor of the resolution or proposal is seeking authority to act as proxy for any shareholder; shareholders should vote their proxies in accordance with their own policies and requirements.

Any voting recommendations set forth in the descriptions of the resolutions and management proposals included in this database are made by the sponsors of those resolutions and proposals, and do not represent the views of the PRI.

Information on the shareholder resolutions, management proposals and votes in this database have been obtained from sources that are believed to be reliable, but the PRI does not represent that it is accurate, complete, or up-to-date, including information relating to resolutions and management proposals, other signatories’ vote pre-declarations (including voting rationales), or the current status of a resolution or proposal. You should consult companies’ proxy statements for complete information on all matters to be voted on at a meeting.