John Mackey of Whole Foods caught sock puppeting

[Fat Guy]

There have been a couple of articles in the Wall Street Journal this week about John Mackey, CEO of Whole Foods. He apparently spent eight years posting to stock discussion forums under a pseudonym. I don't believe the pieces from the Journal are accessible except to paid subscribers, though it might be worth trying the links.

The gist of it:

For about eight years until last August, the company confirms, Mr. Mackey posted numerous messages on Yahoo Finance stock forums as Rahodeb. It's an anagram of Deborah, Mr. Mackey's wife's name. Rahodeb cheered Whole Foods' financial results, trumpeted his gains on the stock and bashed Wild Oats. Rahodeb even defended Mr. Mackey's haircut when another user poked fun at a photo in the annual report. "I like Mackey's haircut," Rahodeb said. "I think he looks cute!"

http://online.wsj.com/article/SB1184187829...tml?mod=mostpop

The Wild Oats bashing is perhaps the most intriguing part of the behavior, because Whole Foods is now trying to buy Wild Oats.

In a related story the following day (yesterday) there was analysis of the legal and PR implications, as well as discussion of other CEOs who post on discussion forum sites or maintain blogs. One publicist had this to say about the possible implications of Mackey's behavior:

public-relations experts said Mr. Mackey's postings risked damaging Whole Foods' well-regarded brand. "Their trust bank is probably sufficient enough to weather this storm, but it chips away at some of their golden brand, because they go from being the company that cares about our health to just another company," said Richard S. Levick, who runs Levick Strategic Communications, a crisis-communications firm.

http://online.wsj.com/article/SB1184290557...e_whats_news_us

The issue, it seems to me, is not that Mackey used a pseudonym. Plenty of people do, including most people posting to eG Forums discussions. The issue is that Mackey made self-interested comments pseudonymously. That's dishonest. I could even understand doing it eight years ago, when interactive online discussion was still not exactly mainstream. I think a lot of us, when first dipping our toes into the online world in the early days, experimented with the boundaries of conduct -- it's so easy to become someone else -- but today? And if you're the CEO of a company? Posting about that company? I'd be much more comfortable with Mackey posting porn pseudonymously -- I'd say, hey, it's his business. But posting about Whole Foods? That's not good. That's the same as a restaurateur posting positive reviews of his own restaurant, while pretending to be a customer who "Just happened to be walking by this place and it was the best meal I ever had!"

At the same time, I think that publicist doesn't make a convincing claim. Unless Mackey gets charged with some sort of stock manipulation, this will probably all just go away soon enough.

[docsconz]

I think the bigger issue than his trumpeting Whole Foods is his putting down a rival company that he is now trying to buy. I would still doubt, however, that the postings of an anonymous internet user would have had any effect on the eventual purchase price of Wild Oats, though it is theoretically possible.

[Chris Amirault]

The articles bring up one red herring -- blogs? -- and misses the point about Whole Foods's golden brand. Mackey has worked hard in the press, on his web site, and particularly in his exchanges with Michael Pollan to cultivate a public persona as a CEO possessing extraordinary sincerity, integrity, and honesty. Some shark CEO could have played this off as a joke, saying he's just playing the Big Game, but Mackey has tried to convince us that he's just a real guy doing a good day's work on our and the planet's behalf. Of course, that "real guy" is at the center of the corporation's brand.

This excerpt from the news piece (both links worked for me) is very telling:

Mr. Mackey declined to be interviewed. But he soon posted on the company Web site, saying that the FTC was quoting Rahodeb "to embarrass both me and Whole Foods." He also said: "I posted on Yahoo! under a pseudonym because I had fun doing it. Many people post on bulletin boards using pseudonyms." He said that "I never intended any of those postings to be identified with me."

Mr. Mackey's post continued: "The views articulated by rahodeb sometimes represent what I actually believed and sometimes they didn't. Sometimes I simply played 'devil's advocate' for the sheer fun of arguing. Anyone who knows me realizes that I frequently do this in person, too."

"They're trying to embarrass me" and "many people do it" are classic dodges familiar to most junior high school kids throughout the decades. But you've gotta love his new information-highway spin: "sometimes I'm me, and sometimes I'm not me." Add them up and they really take an axe to the persona I described above.

[TAPrice]

But posting about Whole Foods? That's not good. That's the same as a restaurateur posting positive reviews of his own restaurant, while pretending to be a customer who "Just happened to be walking by this place and it was the best meal I ever had!"

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Correct me if I'm wrong, but a CEO has a legal obligation to honestly represent the state of his company. All the news reports I heard talked about possible criminal charges, depending on what he said about WF.

That seems very different from a chef posting about his own restaurant. The chef is unethical but in no danger of going to jail.

[Fat Guy]

A CEO has such an obligation, but does that apply when nobody knows it's the CEO speaking? It seems to me that even if the statements are found to be materially misleading (which I'm not sure they are anyway), the use of a pseudonym actually protects Mackey and Whole Foods on the legal side. On the ethical side, however, I think it's like the aforementioned example of a restaurateur pseudonymously and deceptively reviewing his own restaurant.

[BryanZ]

I'm glad this is being discussed here. When I got this story via my wsj.com newsfeed I literally laughed out loud. Seriously, I could see myself getting into this kind of trouble.

But with the SEC looking to open up an investigation, Mackey should be pretty scared. In this post-Sarbanes-Oxley, corporate leadership is held to a higher and often times irrational standard. As best I can tell Mackey did not divulge any insider information, so in that regard he "should" be alright. The fact that few if any people knew his real identity further limits any effect his postings may have had on WF's stock price performance.

With that said, what he did was pretty damn stupid. The Wild Oats merger was a pretty big deal in the grocery world and tying yourself to any shady behavior in a deal of that magnitude, especially as a CEO, is absolutely positively stupid.

I don't think Mackey was in technical breach of his fiduciary duty, but if I were on WF's board of directors I would not be pleased.

[chiantiglace]

Ok, maybe I missing something but where is the damage?

Just because the guy has a slightly childesh side doesn't make him a bad person. If anyone out there is going to judge this guy for playing misleading a few people to humour hisself than I think they may be a litl hypocritical. We have all played jokes on people, and we have all messed with people a little.

Maybe I haven't seen where he has sacrificed good for evil, but isn't there someone more deserving we can trash over the internet?

P.S. I can't view the stock journals right now, so could someone enlighten me to where he is taking the rights away from others?

He is just a man right? I still find whole foods to have significant standards, and I'm not about to stop shopping there over him goofing off on the interenet.

[gfron1]

It showed poor judgment, lack of honesty and raises questions of his ability to have the confidence of others in his leading of a major corporation. Then there's the iffy possibility of his comments have an effect on stocks that he was preparing to buy - that's illegal. Nice guy or not, at that level you're expected to operate with a certain level of professionalism and maturity - that is now tarnished in his case.

EDITED TO ADD: And this is why I am not the CEO of a major corporation.

[chiantiglace]

EDITED TO ADD: And this is why I am not the CEO of a major corporation.

if you want to enjoy life, I suppose thats for the best.

[gfron1]

Let me offer a slightly different slant. If you or I did something this bad or worse, hardly an eye would be blinked. But, Mackey has the financial future of many investors and employees in his hands. If I do something stupid, only my spouse and I suffer. If Mackey does, then thousands are impacted. And while what he did seems insignificant, at the very least, he has shaken the certainty that a CEO needs to bring to an organization.

And for perspective...I became an Executive Director (non-profit CEO) at 25. I held the top job wherever I was up until just a few years ago when I made the decision that I didn't want that pressure and responsibility anymore. I'm now in the second tier of my agency and very happy in that role. So when you say, "If you want to enjoy life..." I do and that's why I made the choice that I did. Mackey is not making that same choice apparently.