#USA #Chicago #Lifeway Foods #shareholder activism #Edward Smolyansky

Lifeway Foods: A Call for Change

As the scheduled vote for Lifeway Foods, Inc. approaches, much attention is being focused on the actions and intentions of Edward Smolyansky, the company's largest shareholder and a nominee for the board of directors. In a recent letter, Smolyansky outlined significant issues impacting the company and emphasized the need for a decisive vote to rectify lifeways' governance structure, which he claims has been failing shareholders.

Background: Lifeway Foods and Its Governance Issues

Lifeway Foods, a publicly traded company known for its probiotic dairy products, has encountered challenges that have raised concerns among shareholders, especially regarding its leadership and governance practices. Edward Smolyansky and his fellow shareholder Ludmila Smolyansky have been vocal critics of the current board’s handling of business operations and decision-making processes.

The company has faced scrutiny in light of missed opportunities, particularly concerning unwarranted rejections of acquisition offers from industry giants like Danone, which offered shares at significantly higher values than current market prices. Asserting that this represents a tremendous loss of potential value for shareholders, Smolyansky argues that the current leadership is prioritizing self-preservation over fiduciary duties.

Smolyansky's Call to Action

In his communication to fellow shareholders, Smolyansky reiterates the importance of voting for the Shareholder Nominees: himself and George Sent. He outlines five compelling reasons why shareholders should support this movement:

1. Unmasking Value Through Independent Board Leadership: Smolyansky believes that electing new board members is paramount to unlock the company’s true value, particularly through an independent and credible board poised for a strategic review.

2. Reform of Excessive Compensation Practices: He highlights the alarming compensation practices, including a staggering $2 million retention bonus and nearly $6.5 million in equity grants to the CEO. He ridicules the existing board’s negligence in approving such packages, which seem disproportionate relative to the company's current performance.

3. Call for Accountability from Independent Directors: The actions of the independent directors have come under fire, with allegations that they failed to fulfill their responsibilities, including unjustified compensation approvals and insufficient oversight during critical periods.

4. Addressing Share Price Discrepancies: Smolyansky points out that despite reporting record revenues, the company's ongoing issues culminate in stagnant earnings and disappointing stock reactions following announcements. Stakeholders seem to understand that the leadership—not the underlying business—remains the problem.

5. Inexperienced Leadership in New Appointments: The recent appointments of new directors are criticized as reactive measures rather than strategic decisions. Their lack of relevant public company experience poses a risk for genuine governance reform essential for long-term stability.

The Path Forward

As the vote date looms, shareholders are urged to consider the implications strongly. Smolyansky is adamant that voting for the Shareholder Nominees, as well as supporting Proposal 6 to form an independent Strategic Review Committee, is a critical step toward achieving real transformation within Lifeway Foods.

In his closing remarks, Smolyansky emphasizes a clear message: “A vote for the Shareholder Nominees is a vote for accountability, transparency, and genuine corporate governance.” He calls upon all Lifeway shareholders to make informed decisions that reflect the desire for a change in leadership, ultimately aiming to restore the value and integrity of Lifeway Foods.


For more information on Edward Smolyansky's campaign or further details about the voting process, shareholders can visit his LinkedIn profile or refer to the forthcoming Shareholder Proxy Statement. The future of Lifeway Foods may very well hinge on the actions taken during this pivotal moment.