Instant Analysis: Whole Foods Market Revamps Its Board, Appoints New CFO

What happened?

Whole Foods (NASDAQ: WFM) has replaced nearly half of its 12-member board of directors, awarding seats to five individuals and naming a new chair. The incoming directors are veterans of either the retail, food, or finance sectors and include current Panera Bread chairman and CEO Ron Shaich and one-time Best Buy CFO Sharon McCollam.

Whole Foods also named a new chair of the board, Gabrielle Sulzberger. She has served as an independent director at the company since 2003.


Whole Foods CEO John Mackey said the new members "join a Board that is focused on being responsive to our shareholders and is committed to achieving the significant opportunities ahead."

Separately, Whole Foods announced it has named a new CFO. This is Keith Manbeck, who will take the reigns on May 17. He comes to the company from Kohl's (NYSE: KSS), where he served as senior vice president of digital finance, strategy management and business transformation. Manbeck is replacing outgoing CFO Glenda Flanagan.

Does it matter?

The large-scale board revamp seems to be an effort to show investors that Whole Foods is willing to change course. Perhaps more importantly, it also feels like a piece of stockholder politics, an attempt at keeping Jana Partners (the company's outspoken top activist investor) at bay for the moment.

As is typical with activists, Jana Partners -- which holds over 8% of the grocer -- is agitating for change at the company. Jana Partners had pressured Whole Foods to consider replacing some of its directors and to mull a possible sale.

There's every reason to think the investor will keep up that pressure, too. A revamped board won't immediately solve Whole Foods' core problem, which is that rivals have upped their game in the organic/natural comestibles space and cut into its business. Whole Foods' sales have been on the decline lately, with a consequent drop in stock price. The board shake-up probably won't do much to address that, but hopefully it will give the company some breathing room in what promises to be an escalating fight with its activists.

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John Mackey, CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Eric Volkman has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Whole Foods Market. The Motley Fool owns shares of Panera Bread. The Motley Fool has a disclosure policy.