Whole Foods investors vote for more control

* Pass proposal making it easier to oust directors

* Pass proposal adopting simple majority voting

LOS ANGELES, March 8 (Reuters) - Whole Foods Market Inc WFMI.O investors approved a nonbinding proposal to make it easier for shareholders to oust a director whose conduct they deem inappropriate, the upscale grocer said on Monday.

If adopted, the proposal -- which passed by a slim majority -- would roll back a bylaw change that Whole Foods directors put in place in 2008 after the Securities and Exchange Commission found CEO John Mackey had anonymously trumped up Whole Foods and blasted a rival on the Internet.

Amalgamated Bank’s LongView Funds, sponsor of the proposal, said the resolution passed with 53 percent of votes cast, adding that it would restore essential rights to shareholders and hand them more control.

“We are pleased that investors have supported this call for the board to reinstate fundamental shareholder rights,” said Scott Zdrazil, director of corporate governance for Amalgamated Bank, whose LongView Fund holds 66,830 Whole Foods shares.

“We encourage the board of Whole Foods to be responsive to shareholders and to take the necessary steps to implement the proposal,” said Zdrazil.

A Whole Foods spokeswoman confirmed the passage of the Amalgamated resolution, plus another shareholder proposal that would remove supermajority voting requirements and adopt simple majority voting requirements.

Official vote counts were not immediately available and the company had no further comment.

The SEC closed an investigation into Mackey’s online chat activities in April 2008.

The SEC’s probe centered on his anonymous comments on a Yahoo financial chat forum from 1999 to 2006 in which he trumpeted Whole Foods’ performance while disparaging then-rival Wild Oats Markets Inc. Whole Foods bought Wild Oats for $565 million in 2007. The SEC ultimately decided to take no action against Whole Foods and Mackey.

In March 2009, Whole Foods settled an antitrust battle with U.S. regulators by agreeing to sell the Wild Oats brand, 13 functioning stores and the leases and assets for 19 closed stores. [ID:nN06387928]

Whole Foods’ board had unanimously recommended that shareholders defeat the proposal, which permitted shareholders to remove a director either “with or without cause.” Under the old bylaws, a director could be removed only for cause.

The board also opposed the simple majority vote proposal, which received 57 percent of the share votes cast at the company’s 2009 annual meeting, on grounds that the vote represented only 37 percent of the company’s outstanding shares.

Shares of Whole Foods closed down 22 cents, or less than 1 percent, at $35.89 on the Nasdaq. They held steady at that level in after-hours trade. (Reporting by Lisa Baertlein, editing by Matthew Lewis)