Edward Smolyansky Advocates for New Leadership at Lifeway Foods Amid Controversy

Edward Smolyansky, along with his wife Ludmila Smolyansky, has launched a formal campaign to replace the current Board of Directors at Lifeway Foods, Inc. (NASDAQ: LWAY). Owning over four million shares, the Smolyanskys argue the company is facing a significant decline in shareholder value due to poor governance. The couple is calling for immediate changes to restore integrity and accountability within the company.

The tensions have escalated following a lawsuit filed by Danone, Lifeway's largest unaffiliated shareholder, which claims that the current Board has breached its fiduciary responsibilities. This legal action arose after the Board granted stock options to CEO Julie Smolyansky without obtaining Danone's consent, violating a long-standing shareholder agreement. The contentious grant of 283,337 shares occurred in conjunction with a sizable cash bonus of $2 million for the CEO, raising eyebrows and concerns about the intent behind these actions.

Despite the controversy, Lifeway Foods rejected Danone's recent offer to purchase the remaining shares at $27 each—an offer that represented a remarkable 72% premium over the average stock price. Instead of negotiating terms, Lifeway has found itself embroiled in legal disputes stemming from questionable decision-making. Given that the CEO's compensation, which amounts to over $8.5 million in cash and stock, comprises around 94% of Lifeway's projected net income for the upcoming year, many shareholders feel the interests of the CEO are being prioritized over those of the broader shareholder base.

In light of these governance issues, Smolyansky proposed a new slate of independent directors to revitalize the Board. This proposed slate includes notable figures such as George Sent, a distinguished investment banker familiar with challenges in the food and beverage sector. SBent has previously served as Lifeway's lead independent director and would be instrumental in exploring potential acquisition offers and strategic alternatives.

Also included in this new slate is Edward Smolyansky himself, who has held various key roles at Lifeway Foods, positioning him as an expert on operational matters. Ludmila Smolyansky, co-founder of Lifeway, is also part of this team, known for her pivotal role in introducing kefir to the U.S. market and growing the company from its humble beginnings.

The Smolyanskys believe a complete change in the Board's composition is crucial to refocus Lifeway's mission of maximizing shareholder wealth and restoring its foundational integrity. They assert that the current Board's inability to prioritize shareholder interests calls for immediate action, stating that Lifeway must repair its relationship with Danone and halt ongoing litigation that is detrimental to all stakeholders.

“Lifeway has failed not only its significant global partner but its own founding family,” Edward Smolyansky remarked, pointing to a persistent lapse in governance since 2021. The comments reflect a growing frustration with the management’s focus on control strategies rather than fostering value for its investors.

Smolyansky’s camp is promoting their vision of a Board equipped to handle Lifeway’s challenges with dedication to both shareholders and core company values. To support this transformation, they are urging immediate action ahead of the upcoming 2025 Annual Meeting where the election of new directors will take place.

For further updates on this campaign and insights into the nominees, please follow Edward Smolyansky on LinkedIn or visit freelifeway.com, which details the background and proposals concerning the Board changes intended to usher in a fresh era at Lifeway Foods. A call to restore faith in Lifeway’s governance is paramount, and the Smolyanskys are taking a stand for significant reform.