Where does John Mackey get his power?

By Felix Salmon
December 28, 2009
Nick Paumgarten's 9,000-word profile of John Mackey, the CEO of Whole Foods, obviously went to press too late to incorporate the news that he's finally stepping down as chairman of the company.

" data-share-img="" data-share="twitter,facebook,linkedin,reddit,google" data-share-count="true">

Nick Paumgarten’s 9,000-word profile of John Mackey, the CEO of Whole Foods, obviously went to press too late to incorporate the news that he’s finally stepping down as chairman of the company.

The move comes a good two-and-a-half years after the sockpuppet scandal which should have cost Mackey both of his jobs but which instead ended in nothing but a narrow and pathetic amendment to the company code of conduct.

Mackey has built Whole Foods up largely by acquisition, which means that his personal stake in the company is tiny — less than 1%, and less than the average daily volume in the stock. All the same, Paumgarten describes Mackey as “not always an accidental accumulator or practitioner of power”, and it’s pretty clear that if there’s any threat to his complete control over the company, it’s going to come from his newest investors, rather than from any other executive. When Mackey buys a rival grocer, its executives often take on a senior role in Whole Foods — but after that, they rarely last long.

Still, Mackey stands out among founders of multi-billion-dollar companies for the relative modesty of his wealth and income. His 1.1 million shares are worth $31 million today, and have provided him with zero dividend income since August 2008. And yet he’s much more powerful, charismatic, and important than most other corporate founders and leaders — and has survived multiple episodes which would have cost virtually any other CEO their job. Could it be that somehow Mackey has swapped money for power, and that better-paid CEOs get held to a higher standard?

2 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

I don’t know about the better pay => higher standard; I understand there’s an inverse correlation between CEO pay and company performance.

Posted by barrkel | Report as abusive

“The move comes a good two-and-a-half years after the sockpuppet scandal which should have cost Mackey both of his jobs but which instead ended in nothing but a narrow and pathetic amendment to the company code of conduct.”

Wow, you’re a bitter, defeated partisan, aren’t you? The guy is obviously a good operator and obviously has good ideas about how to bring down the cost of health care. I wish Mackey would have kept talking. You can’t treat your customers like they are all stupid, just because some are.

Posted by mattmc | Report as abusive