Thursday, May 22, 2008

Retail Memo: Whole Foods Market CEO John Mackey is 'Back to Blogging'; As Well as Being 'Back in Town.'

Yesterday, we posted this interview with Whole Foods Market, Inc. CEO John Mackey conducted by a Boston Globe reporter and published in the Wednesday, May 21 edition of the newspaper, in a short piece with some commentary.

Mackey was recently cleared 100% of any wrongdoing by the U.S. Securities and Exchange Commission (SEC) for making comments and posts on 'Yahoo Finance' message boards about Wild Oats Markets, Inc. and Whole Foods Market, Inc. He used the screename "Rahodeb" when making the online posts.

One of the things Mackey stopped doing last year once it was discovered he was making these online comments using the screename "Rahodbed"--and the SEC decided to investigate the matter to determine if his doing so broke any laws since the online communications included posts about the at the time impending Whole Foods/Wild Oats acquisition-merger--was to stop publishing his "The CEO's Blog" on Whole Foods' website.

Well, heee's back. Now that the SEC has cleared Mackey of any wrongdoing regarding the online posts, the Whole Foods Market CEO has returned to writing his "The CEO's Blog."

John Mackey's very first post is appropriately titled, "Back to Blogging." In the posting, Mackey talks about his online posting, why he chose the screename "Rahodeb" and other topics surrounding the postings and the SEC investigation. You can almost feel the relief in his words that he's been cleared of any wrongdoing by the SEC.

Additionally, you can read Mackey's last blog post note, the day he stopped posting to his blog, here. There's also a couple links on this post (below it), which link to his apology statement, a report on Whole Foods' board of directors' investigation of the online posting issue, and the initial July 17, 2007 contacting of Whole Foods Market, Inc. by the SEC that the regulatory agency was launching its investigation.

Lastly, in our post yesterday of the Q&A interview with Mackey in the Boston Globe, we mentioned Globe reporter Jenn Abelson interviewed the Whole Foods' CEO shortly before he gave the commencement speech to the Bentley College 2008 graduating class on the school's campus in Waltham, Massachusetts. You can read the text of Mackey's commencement speech at Bentley College here.

Not All Welcome John Mackey Back to Blogging

John Mackey's return to blogging isn't being met in some media quarters with open arms.

For example, Felix Salmon, who writes the "Market Movers" finance blog for Conde Naste Portfolio online, has a piece today titled: "Annals of Hypocrisy, John Mackey Edition." The title to the posting pretty much says all that's needed in terms of an introduction to what the writer says. So rather than elaborating, you can read Felix Salmon's commentary here.

Others Welcome Mackey Back

On the other hand, there are already a few comments on Mackey's blog piece, welcoming him back to blogging and encouraging him on. We expect once news of his blog post, and more links to it get out there, there will be more comments on his post.

Natural~Specialty Foods Memo Analysis

Do we think John Mackey is going to suffer any long-term damage from the online posting incident. No we don't. We aren't offering a position that he was right or wrong about it. Merely providing our analysis.

There are six key reasons why he won't suffer any long-term damage from it, in our analysis:

  1. He came out and admitted it as soon as he was caught. No spin, no B.S.
  2. He posted it on his blog, and stopped writing his blog during the investigation. This showed respect for the process.
  3. He didn't shoot off his mouth--although he probably wanted to--while the SEC was conducting the investigation. The SEC likes this kind of behavior from those it investigates. It also was good PR for Mackey and Whole Foods.
  4. He isn't running off at the mouth about how the SEC is an instrument of the "police state" as many others under similar circumstances have when being investigated.
  5. He's been cleared by the SEC, so there are no longer any clouds hanging over the issue from a legal standpoint. There are ethical clouds perhaps. But how many reading this haven't made ethical lapses in their lifetimes? The key is to recognize them and go forward as a better person.
  6. Lastly, John Mackey is hanging a lantern on the issue instead of now once he's been cleared by the SEC, just saying its over. Agree or disagree with his blog piece, Mackey is opening himself up, offering his explanation and defense, and allowing readers to comment on his words.
There will be a few more pieces like Felix Salmon's posting today in Conde Naste in the next couple weeks. But beyond that, the issue will fade away.

That's do in part to the short shelf life of such issues in American life. It's also due to the fact the SEC has cleared Mackey 100%. Lastly, as we describe in our six points above, it's due to how Mackey and Whole Foods has handled the matter basically since the launch by the SEC of the investigation in July, 2007, to today. It appears, like in the phrase in the famous song 'Mack The Knife' by Bobbie Darin, that "Mackey's Back in Town."


Felix said...

To clarify: I have no problem at all with Mackey posting under his own name on his own official CEO's blog. In fact, I think that more CEOs should do that. I have a problem with Mackey doing his sockpuppet act and pretending to be someone else on Yahoo message boards. And I have a problem with the way that even now he's trying to defend his actions. But I DO welcome Mackey back to the blogosphere -- under his own name.

Natural~Specialty Foods Memo said...

What do other readers think?

Do you agree with Felix that John Mackey's posting under an assumed handle on the Yahoo Finance message boards was a big deal; that perhaps the SEC let him off easy?

Or do you feel it was a minor incident, and that the SEC was correct in clearing him 100% of any wrongdoing in the matter?

Do you think other CEO's and executives post on such message boards under assumed names often? If so, did the Mackey incident prevent many of them from continuing to do so?

Felix said...

This was never an SEC issue. I daresay the SEC was right in clearing him -- not of "any wrongdoing", I might add, but just of doing something illegal. I don't think what Mackey did was necessarily illegal, just that it was wrong. And that the board of directors of Whole Foods -- not the SEC -- should have asked him to resign, since he didn't resign of his own accord.

Anthony Bennett said...

I disagree it's a clearcut issue as to if the board should have canned Mackey.

Should he have been posting on these online boards using a fake name? Probably not.

However, it's a less than clear area in terms of what effect his doing so had. For example, since he was using the fake handle, did anybody reading his posts really take what he said seriously?

It is the online world after all.

If he was posting under John Mackey, they would have.

If online posting does move markets under postings by annon. screen names, then we all have to worry about the state of the global financial system. (I'm already worried for other reasons.)

Of course, there is an ethical issue regarding Mackey's postings, no doubt. But doesn't the Whole Foods' board have the right to decide on that ethical issue? Of course the board is going to error in Mackey's favor. He is popular at Whole Foods. It's likely a less-popular CEO, and one who isn't a founder, would meet a worse fate than Mackey did from the board.

Anonymous said...

The Wall Street Journal has a story on Mackey's return to blogging today as an fyi.

Poster, are you the Felix who wrote the blog post linked in the story here on this blog?

If so, wondering what action you believe the WFM Board should have taken against John Mackey? Fire him? or some other less drastic punishment?

Anonymous said...

Noticed lots of new comments on John Mackey's blog since the post.