Whole Foods Markets – Establish Independent Chair (2010)

Outcome: Successfully Withdrawn. After the shareholder proposal was filed, CEO John Mackey stepped down as Chairman of the Board.

That pursuant to Section 2.23 of the Texas Business Corporation Act and Article IX of the Amended and Restated Bylaws of Whole Foods Market, Inc., the stockholders of Whole Foods Market, Inc. hereby amend those Bylaws as follows:
• Article III, entitled “Directors”, is amended by adding the following section 13:
“Independent Chairman. The Chairman of the Board shall be a director who is independent from the Corporation. For purposes of this requirement, “independent” has the meaning set forth in New York Stock Exchange (“NYSE”) listing standards, unless the Corporation’s common stock ceases to be listed on the NYSE and is listed on another exchange, in which case such exchange’s definition of independence shall apply. If the Board determines that a Chairman who was independent when time he or she was selected is no longer independent, the Board shall select a new Chairman who satisfies this independence requirement within 60 days of such determination. Compliance with this independence requirement shall be excused if no director who qualifies as independent is elected by the stockholders or if no director who is independent is willing to serve as Chairman. This independence requirement shall apply prospectively so as not to violate any contractual obligation of the Corporation that may be in effect when this requirement was adopted. This section shall not be amended or repealed by the Board of Directors.”; and
• Article V, entitled “Officers”, is amended by deleting from section 2 thereof, entitled “Election”, the sentence “No officer need be a member of the Board of Directors except the Chairman of the Board, if one be elected.” and substituting therefor: “No officer need be a member of the Board of Directors.”
The Board of Directors is responsible for protecting shareholders’ interests through independent oversight of management, including the Chief Executive Officer’s (CEO) performance. Currently Mr. John Mackey is both Board Chairman and CEO. We believe that combining the two positions may not serve the best long-term interests of shareholders.
We see an urgent need for objective and independent Board evaluation of our Company’s strategic plan, as Whole Foods trailed the S&P 500 and Dow Jones Food Retailers & Wholesalers Index for the three-, four- and five-year periods ending September 21, 2009. By setting the agenda for, and leading discussions of, strategic issues at the Board level, the Chairman is critical in shaping the Board’s work.
We believe an independent Chairman will enhance Board leadership and protect shareholders from potentially harmful management decisions. Corporate governance experts agree. In a 2009 report the Milstein Center at Yale School of Management recommended splitting the two positions as the default provision for U.S. companies. In 2008 and 2009, proxy advisor RiskMetrics/ISS recommended voting FOR a shareholder proposal urging separation of the roles at our Company.
Given our Company’s performance in recent years, the uncertain competitive landscape, and the importance of independent scrutiny of management, we urge a vote FOR this resolution.

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