The Franciscan Sisters of Allegany has filed a shareholder proposal asking Wendy’s to amend its proxy access bylaws, concerned by hedge fund Trian Partners’ “outsized influence” over the U.S. fast food chain’s board.
The proposal asks Wendy’s to enable as many shareholders as needed to aggregate shares to meet the 2% of stock owned continuously for three years required to nominate directors to the company’s ballot.
“Eliminating group limits and lowering the ownership percentage from 3% to 2% would empower shareholders with smaller holdings to nominate more diverse board members with independent perspectives,” the proposal reads. “This would benefit the company, especially given the influence that Nelson Peltz and hedge fund Trian Partners hold over the board.”
The Franciscan Sisters expressed concern over reports that Trian Partners is “exploring a potential acquisition of the company,” noting Trian and its founder Peltz collectively hold 19.24% of Wendy’s common stock while nine of Wendy’s ten non-executive board committee members have current or former business associations with either Trian or its founder.
Adding to these governance concerns, the proponent also criticized Wendy’s board for failing to “adequately manage human rights risks in its supply chain.”
The company was allegedly “unresponsive” to the Franciscan Sisters of Allegany’s 2021 shareholder resolution, supported by 95% of votes cast, requesting disclosure about worker protections in the company’s food supply chain.
The proxy access proposal will be subject to a vote at Wendy’s 2023 annual meeting, which is typically held in May.