Whole Foods Market shareholders are in for a savory a two course meal of governance changes. John Mackey, the co-founder, CEO, and now former chairman, recently resigned his chairmanship in response to pressure from corporate activists and to “protect the company's corporate governance profile.” To top it off, Mr. Mackey has also cast his support behind a longer standing shareholder proposal, submitted by the infamous John Chevedden, to change the company’s super majority voting requirement to simple majority votes. If the Whole Foods is any indication, as the 2010 proxy season approaches, activist shareholders could be gaining support in high places.

In its recent regulatory filing, Whole Foods disclosed that its board has amended Article IX of the company bylaws. The change makes way for shareholder approval of an amendment that would require an affirmative vote of a majority of the outstanding shares for changes in advance notice bylaws. The bylaw amendment would also impact written consent procedures bylaws, vacancies bylaws, the composition of the board, indemnification, and bylaws which pertain to bylaw amendments.

As background, a super majority voting requirement is a bylaw which stipulates that certain proposals require a certain level or type of support greater than a simple majority vote. Many activist investors, however (setting aside certain U.S. Senate procedures), decry these provisions as “undemocratic”. At Whole Foods, several shareholder proposals have been submitted since 2005 calling for an end to the company’s super majority voting provisions.

John Chevedden has submitted four shareholder proposals since 2005 requesting that the Whole Foods board take each step necessary for implementation of a simple majority vote. After his initial proposal in October 2005, the company submitted a No-Action Letter to the SEC seeking to omit the proposal from its proxy materials in reliance on certain provisions of proxy rules citing that it directly conflicted with a certain company proposal. The SEC did not concur with the Whole Foods’ view and stated that the proposal could not be omitted from its proxy materials.

In September 2007, Chevedden submitted another proposal that would require Whole Foods to "take all steps necessary, in compliance with applicable law, to remove the supermajority vote requirements in our Articles of Incorporation and Bylaws." The proposal was followed up with by a No-Action letter indicating the company’s intent to omit the proposal in reliance on a different proxy rule citing that the proposal was completely implemented by the Company in 2006. The SEC concurred with the view of Whole Foods.

Chevedden later submitted a rebuttal in December 2007 persuading the SEC that the company still had a supermajority of two-thirds. Correspondence from Chevedden to the SEC claimed that the company had not responded to the rebuttal and for that reason, the SEC should not allow the resolution to be omitted from the company proxy. The SEC responded that it did not find any basis to change its position concurring with the view of Whole Foods.

Yet in the lead up to the 2010 proxy season, Whole Foods has, at last, made the long sought bylaw change. It is still early in the season, yet likely a sweet victory for Chevedden and his supporters. Corporate observers will certainly watch to see how similar proposed governance changes play out at other companies throughout this proxy season.