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

Status
20.85% votes in favour
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
NASDAQ: WEN
Lead filer
Individual
Co-filers
New York City Office of the Comptroller
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • CEO / chair duality
  • 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: We believe Wendy’s Board needs an independent Chair to strengthen its independence from one of Wendy’s largest shareholders, Trian Fund Management, L.P. (“Trian”), and responsiveness to investor concerns. Nelson Peltz, Trian’s Chief Executive Officer, is Chair of Wendy’s Board. In 2023, this proposal received an estimated almost 41% of unaffiliated votes cast, indicating substantial outside shareholder support.

As long-term shareholders, we are troubled by Peltz’s potential conflicts of interest and disproportionate influence over Wendy’s Board, whose members include his son, Matthew Peltz, and his longtime business partner, Peter May. Notably, the Board classified Peter May as an independent director in its 2023 proxy statement.

The potential for a serious conflict of interest arose in 2022 for Nelson Peltz (as well as Matthew Peltz and Peter May) when Trian filed a Schedule 13D/A disclosing Trian’s intent to evaluate a potential transaction with Wendy’s. Although Trian decided not to pursue a potential transaction with Wendy’s, the potential for a related party transaction remains, which would create conflicts of interest for the Peltzes and May, all of whom are Trian partners.

Exacerbating these concerns are Chair Peltz’s unresponsiveness to shareholder concerns and a resolution regarding Wendy’s supply chain labor protections.

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 in the produce supply chain. Most of Wendy’s competitors, including McDonald’s and Burger King, joined years ago. The Program, credited with transforming Florida tomato farms once called “ground zero for modern day slavery,”2 received the Presidential Medal for Extraordinary Efforts in Combating Modern-Day Slavery.

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.4 In a Fortune ranking of the most innovative boards in the S&P 500, “companies that scored higher on board effectiveness have an independent board chair.”

There is a pressing need for an independent chair at Wendy’s to improve and protect long-term shareholder value.

For these reasons, we urge you to vote FOR this proposal"



Lead Filer: The Comptroller of the City of New York

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.