July 9, 2015 / 7:37 PM / 4 years ago

Whole Foods revamps director nomination rules, pleasing critic

BOSTON (Reuters) - Whole Foods Market Inc adopted new rules to make it easier for groups of small shareholders to run candidates for the company’s board of directors, according to a U.S. securities filing that outlines changes sought by a critic.

In the filing dated June 29, the Texas-based grocery chain said its board approved bylaw amendments to allow a group of up to 20 shareholders owning at least 3 percent of the company’s stock to nominate director candidates and have them included on the company’s proxy materials.

Whole Foods previously had opposed the changes, known as “proxy access.” The company had proposed higher thresholds that would have made it harder for small investors to run their own board candidates.

Regulators initially sided with Whole Foods but then stepped back in January, opening the door for a rush of proxy-access resolutions this year at other companies that have drawn widespread support.

Proponents say the changes will make companies more responsive, though some issuers worry about making it easier for short-term activist investors to claim board seats.

Whole Foods’ filing did not make clear why it adopted the changes when it did. A spokeswoman did not immediately return messages.

James McRitchie, a private shareholder who has pushed for proxy access at Whole Foods and other companies, said he was pleased with the grocer’s decision.

McRitchie said that in response to the company’s change he has withdrawn a similar shareholder resolution he had filed, although he would prefer more liberal standards such as having no limit on the number of shareholders who could band together to run director candidates.

“I’m declaring victory and withdrawing,” McRitchie said.

Reporting by Ross Kerber; Editing by Lisa Shumaker

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