Relentless Wall Street Billionaire Has a Secret Cause

A decade on, Mr. Icahn has concluded the original promise was hogwash. McDonald’s now often has its producers move pigs out of the containers only after confirming they’re pregnant. Many wait to do so until the sows are four to six weeks into their 16-week pregnancies. Mr. Icahn had expected the use of so-called gestation crates to be banned altogether.

The man who helped send TWA into bankruptcy and partly inspired Gordon Gekko, the ruthless corporate raider in “Wall Street,” is spending a lot of time advocating for better treatment of pigs, using many of the same tactics.

Mr. Icahn got involved with the Humane Society of the United States, which is leading the push, at the behest of his daughter, Michelle Icahn Nevin, a vegetarian animal-lover who was working there at the time. He learned details of the pigs’ plight when he hosted a Humane Society executive for dinner at his Manhattan penthouse. The nonprofit was having trouble getting McDonald’s to take action until it corralled Mr. Icahn.

“Animals are one of the things I feel really emotional about,” says Mr. Icahn. He and his wife have three small dogs. He says he feels particular affection for pigs, pointing to their intelligence. A recent study suggested a kinship with humans by showing pigs can play videogames with their snouts.

McDonald’s declined to comment on the difference in the interpretation of the 2012 pledge. It said in a written statement that more than 60% of its U.S. pork is sourced from “confirmed pregnant sows” not housed in gestation crates, and it expects that figure to be 85% to 90% by the end of this year.

It said industrywide challenges including outbreaks of swine disease and the Covid-19 pandemic delayed producers’ ability to meet the original timeline. As a result, the company said, it has extended it to 2024.

The company said that it maintains an active dialogue with Mr. Icahn and the Humane Society.

Mr. Icahn, who turns 86 next week, until now hasn’t waded into the socially conscious investing trend sweeping Wall Street. He is more often seen slinging mud at what he views as greedy CEOs and docile boards, and has amassed an estimated $17 billion fortune doing so.

He once called Bill Ackman a “major loser” on live television in a face-off over Herbalife Nutrition Ltd. , and said he wouldn’t do business with his rival shareholder activist if he were the last man on Earth. Mr. Ackman said at the time that Mr. Icahn “either has a very, very bad memory or he has trouble with the truth.”

Mr. Icahn called Michael Dell, with whom he clashed over the buyout of the eponymous PC maker, a “bamboozler” who tried to “swindle shareholders.” Mr. Dell called Mr. Icahn a “circus clown.”

Mr. Icahn, who moved to Florida in 2019 from New York in search of warmer weather and lower taxes, typically scoops up hundreds of millions worth of shares in the companies he targets and pushes them to make changes to boost their stocks. One of his most successful bets, on Netflix Inc., made him a $2 billion profit in 2015.

In the case of McDonald’s, he owns only roughly 100 shares, or about $26,000 worth, which he bought recently. That is about 0.008% the size of his initial investment in Netflix.

Mr. Icahn has already threatened privately to run a proxy fight for board representation, according to people familiar with the matter. It’s a threat he’s followed through on at other companies, though not usually with such a small share holding.

McDonald’s has been conferring with Wall Street advisers to help should he launch a full-fledged campaign over how its sausage is made, people familiar with the matter said.

On a recent phone call with McDonald’s Chief Executive Chris Kempczinski, Mr. Icahn bristled at the company’s interpretation of the pledge, which banned using the stalls to house pregnant sows. “You’re just hiding behind the word pregnant,” Mr. Icahn told the CEO. “When you keep injecting semen into the sow every day, you don’t think she’s going to be pregnant?”

Gestation crates are typically about two feet wide and prevent sows from turning around, maximizing use of available space. Some producers say it also prevents the pigs from harming one another. Breeding pigs can produce seven or more piglets per litter, totaling well over 60 piglets in consecutive pregnancies over a few years.

Massachusetts and California have outlawed the sale of pork produced using such crates in most circumstances. Some brands say they don’t use them at all, including Applegate Farms and Niman Ranch. The parent company of McDonald’s rival Burger King, Restaurant Brands International Inc., has set a goal to eliminate the use of crates for both pregnant and nonpregnant sows.

Widespread use of gestation crates began in the 1970s as pork producers gave priority to efficiency. A 1978 article in the industry publication National Hog Farmer suggested producers consider the sow “a valuable piece of machinery whose function is to pump out baby pigs like a sausage machine.”

“Under that mind-set, the industry went, no pun intended, hog wild into moving pigs into gestation crates,” says Matthew Prescott, senior director of food and agriculture for the Humane Society, who has been focused on eliminating the crates since 2002.

Mr. Icahn’s interest in McDonald’s doesn’t extend to eating its products (his tastes run more toward vodka martinis and penne pasta). He thinks he ate at McDonald’s once, roughly 20 years ago.

Write to Cara Lombardo at [email protected]