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Could Publix Super Markets go public?

Usually a happy corporate pep rally, Publix Super Markets' annual shareholders meeting April 12 could turn into a more testy affair.

A group of dissident shareholders this week launched a write-in campaign to elect its own slate of nine directors to replace a board dominated by five heirs and relatives of chain founder George Jenkins. One of the group's aims: to explore the possibility of taking the company public.

The chances of upsetting the balance of power at the nation's largest employee-owned company appear remote. Dissident shareholder campaigns seldom succeed at more than putting pressure on management to change policies. And last year, holders of 5.5 billion Publix shares voted to retain the current nine-member board, while owners of just 14 million voted to oust them.

None of the write-in candidates appeared to be employees, according to Publix officials, and a reporter's e-mails to the group — Publix Employee Shareholders United — drew no response.

While the campaign's presence has been confined to a news release and a page on Facebook, that alone was enough to generate lots of buzz Wednesday on stock and retail industry blogs. After all, Publix is the nation's fourth-largest supermarket chain, and investment bankers for years have lusted over the possibility of underwriting a public offering.

"I'm shocked," said David Livingston, a retail market research analyst in Waukesha, Wis. "Taking Publix public could lead to their becoming another Winn-Dixie. There may be a short-term gain for shareholders, but long term, others would begin milking the company and those rewarded would not be the people who stock the shelves or bag the groceries."

"I hope shareholders consider that they may be killing the golden goose," added James Tenser, president of VSN Strategies in Tucson, Ariz.

Founder George Jenkins gave 85 percent of the company's shares to its employee stock ownership plan. His heirs and other insiders control the rest. The shares are currently traded privately and can be cashed in, usually when leaving the company, only by selling them back to Publix.

The company uses an independent analyst to set share value, which is based on the company's financial performance and the stock prices of other big supermarket chains.

A hundred dollars of Publix stock in 2006 is now worth $143.92. That's higher than the average stock price of Publix's competitors — $116.

The dissidents want to enhance the value of Publix stock and make it easier to cash in shares. Standard ways to do that are to take the company public or sell a chunk of the company to private investor groups.

That would dramatically alter an ownership structure the Jenkins heirs see as more than part of George Jenkins' legacy. It is the linchpin behind the company's industry-leading ratings as best in customer satisfaction for nine years, and 14 years on Fortune's list of the 100 best workplaces in the country.

Jenkins said "never be greedy with the employees who made you successful" when he cut the employees in on ownership.

"It motivates them to treat the customer like a king because it gives them some skin in the game," said Ed Crenshaw, his grandson and current CEO.

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

.Fast facts

Publix Super Markets Inc.

Headquarters: Lakeland

Employees: 160,000

Revenues: $26 billion

Territory: 1,006 stores in five states

Also at the Publix shareholders meeting: Shareholders decide whether to make permanent their first "advisory vote" on compensation paid to top management. CEO Ed Crenshaw got $994,000 in 2010, up from $916,000 the year before. President Todd Jones got $816,000, up from $737,000.

Could Publix Super Markets go public? 03/16/11 [Last modified: Wednesday, March 16, 2011 10:06pm]
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