We live in crazy times. Up is down and down is up. People take horse deworming medicine to fight off viruses. A Congresswoman openly muses about Jewish-funded space lasers designed to start wildfires.

And now this: Carl Icahn is trying to force McDonald’s to treat pigs better.

Yes, that Carl Icahn, the infamous corporate raider of the 1980s turned billionaire activist investor, is now the champion of downtrodden factory farm animals. Or at least the swine variety.

Icahn (who is now 86 years old) has launched a proxy campaign against the Golden Arches to replace two of its directors. His beef? The company failed to honor previous commitments to phase out sourcing meat from producers that use tiny "gestation crates" to house pregnant pigs.

"We believe that these stalls are inhumane and cause unnecessary suffering for pigs that are used in the production of pork," the proxy materials said.  

Icahn only owns 200 shares but being someone of his stature grants him access to top executives, including a meeting in January with CEO Chris Kempczinski and chairman Enrique Hernandez.

"Mr. Icahn maintained that he felt McDonald’s was not honoring its original pledge and that gestation crates are unnecessarily cruel forms of animal abuse," according to SEC filings. "Mr. Icahn shared his concern about verification methods to ensure that sows were not kept in gestation crates and questioned the seemingly inherent lack of transparency or trusted, third-party compliance in verifying McDonald’s progress in fulfilling its commitments."

So what is Icahn up to? Does he really care about the pigs? Or is something else going on?

"Complete bullsh*t"

You'll have to forgive my obvious skepticism. Animal welfare is an important issue. But Icahn has never been the soft, cuddly type. Throughout his career, Icahn has demonstrated he cares about one thing: himself.

My interest in him goes back to my days as a business reporter for the St. Louis Post-Dispatch. The city was home to TWA, once the crown jewel of the American aviation industry. At least, until before Icahn got his hands on it.

In the mid 1980s, Icahn borrowed a lot of money to acquire TWA and then subsequently laid off scores of employees and sold assets to pay back the debt, a process known as "asset stripping."

Over the next decade, Icahn sold off some of the airline's most profitable routes and then arranged for lowestairfares.com, a business he controlled, to exclusively offer heavily discounted blocks of TWA tickets. Such an arrangement bled profits from the airline's balance sheet.

When TWA filed for bankruptcy after 9/11, Icahn, who chaired the company, held up the proceedings because he wanted to protect the lowestairfares.com arrangement. Suffice to say, employees, including pilots, mechanics, and flight attendants, did not like the man.  

Icahn next turned his sights on Silicon Valley. He went after Apple and eBay, arguing the boards of directors were not properly spending shareholder cash.

Icahn's new image as an activist investor seeking to protect shareholder interests was "complete bullshit," author Mark Stevens once told me

Stevens should know. With the support of Icahn, he wrote a biography called "The $20 Billion Man." 

"He's the smartest guy I ever met," Stevens said. "But he doesn't give a damn about anybody but himself. To position himself as a corporate governance guy is a joke."

Reading the tea leaves

Perhaps Icahn is just reading the tea leaves and adapting accordingly. 

Boards of directors today are increasingly viewing Environmental, Social, Governance, aka “ESG,”issues like climate change and racial equity as serious problems that could materially impact shareholder value.

"ESG is a very big deal for boards today," said Patricia Lenkov, an author and expert on boards and corporate governance.

The Covid-19 pandemic, racial justice protests, and growing alarms over global warming have prompted a broader "reset" in how companies look at their place in the world, she said. 

Not just as insular organizations solely dedicated to generating profits for investors but also global citizens with responsibilities to a broader community of stakeholders, said Lenkov, who also serves as recruiter for executives and board directors.

"Right now, there's a lot of talk," she said. "Boards are still trying to figure it out."

Investors, however, have already taken some significant action. 

Blue chip institutional investors like Goldman Sachs and BlackRock have built ESG into their investment theses and valuation models.   

“As more and more investors choose to tilt their investments towards sustainability-focused companies, the tectonic shift we are seeing will accelerate further,” BlackRock CEO Larry Fink wrote in a letter to CEOs. “And because this will have such a dramatic impact on how capital is allocated, every management team and board will need to consider how this will impact their company’s stock.”

"We are making sustainability integral to the way BlackRock manages risk, constructs portfolios, designs products, and engages with companies," the letter continued. "We believe that sustainability should be our new standard for investing."

Fink further declared that BlackRock will prioritize within its $10 trillion portfolio "climate change, not only in terms of the physical risk associated with rising global temperatures, but also transition risk — namely, how the global transition to a low-carbon economy could affect a company's long-term profitability."

In addition, activist hedge fund Engine No. 1 waged a successful campaign last year to place three of its candidates onto ExxonMobil's board of directors. The firm had argued that the energy giant had wasted billions of dollars of shareholder cash searching for oil and gas when it should have been investing in clean energy technologies.

Icahn's ultimate motive

Icahn is no doubt aware that ESG has profit motives behind it. But that doesn't necessarily mean he sees his campaign against McDonalds as an opportunity to make money. After all, he owns just 200 shares.

Perhaps Icahn has mellowed out in his later years and genuinely cares about animal welfare. In the SEC filings, Icahn said that he first learned of the pig cages in 2012 while his daughter Michelle Icahn Nevin worked at The Humane Society of the United States.

But Icahn, a very wealthy man, could have just donated to animal welfare programs. Instead, he chose to wage a complicated and expensive campaign against the board of directors overseeing one of the world's largest fast food restaurant chains.

In the end, Icahn just can't resist a good proxy fight. Whether to make money for himself or save pigs from cramped cages, Icahn is doing what he does best.

And as the record shows, he's pretty good at it.  

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