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McDonald’s is ready to retain both positions in a mediation match with Carl Icahn

McDonalds Corp.

MCD -0.33%

is ready to prevail in a representative fight with activist Carl Icahn, who challenged the fast food chain over the treatment of its suppliers for pregnant pigs, said people who know the subject.

Early vote counts show McDonald’s well ahead of Icahn,

who had nominated two directors to the company’s board, people said. Voting will continue until the end of the McDonald’s shareholders’ meeting on Thursday morning and they could continue to move, although the outcome is unlikely to change, they said.

Mr Icahn’s campaign for animal rights was seen from the beginning as a great opportunity, as it was far from the formal battle of his activists. It did not show any obvious financial growth to McDonald’s shareholders and had a small share of McDonald’s, which means it had to persuade a larger-than-normal shareholder to support its purpose.

Mr Icahn could describe the campaign as a partial victory, as it raised awareness of the issue, which debuted 10 years ago at the behest of his daughter and the Humane Society of the United States.

At the heart of the conflict is the use by McDonald’s suppliers of so-called pregnancy boxes, small cages used to restrict pregnant pigs. Vendors say the boxes make reproduction more efficient, while Mr Icahn and his candidates say they are inhumane.

In 2012, McDonald’s pledged to stop buying pork by 2022 from producers using boxes. It was little known that Mr Icahn had pushed quietly for change behind the scenes.

This year, Mr. Icahn argued that McDonald’s had failed to follow suit and changed the interpretation of the commitment. McDonald’s often forces producers to move pigs out of containers only after confirming they are pregnant, something many expect to do until the sows are four to six weeks old in the 16th week of pregnancy.

Mr Icahn expected the use of the boxes to be completely banned.

McDonald’s said that more than 60% of U.S. pork comes from pigs that are not housed in pregnancy boxes as soon as it is confirmed they are pregnant and expects that percentage to be 85% to 90% by the end of this year.

The company says Mr Icahn’s claim is not feasible because it would significantly increase costs and financially burden customers.

Pig breeders have said banning crates would raise meat prices by requiring farmers to spend millions of dollars to change jobs. The boxes were said to protect the pigs’ health by preventing the sows, who are naturally aggressive, from harming each other.

Mr Icahn has sought to address large chapters of indicators focusing on socially-conscious investments, the support of which is vital in most mediation struggles. He argued that despite being at the forefront of the environmental, social and governance investment movement, BlackRock Inc.

and others have subjectively chosen which principles they are interested in and place very little emphasis on animal welfare.

I write to you Cara Lombardo at cara.lombardo@wsj.com and Dana Cimilluca at dana.cimilluca@wsj.com

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Appeared in the print edition of May 25, 2022 as “Icahn Set To Lose Proxy Bid At Chain”.

McDonald’s is ready to retain both positions in a mediation match with Carl Icahn

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