On the Structure of Kellogg’s Corporate Control
By: Hubert Kellogg
Tags: Kellogg, Union, Bernie Sanders, Strike, Battle Creek

Workers at Kellogg’s went on strike early October for the first time since 1972. It’s now mid-November, snow is falling, and it’s starting to get really cold outside. At the request of the company, workers briefly returned to the negotiating table in what turned out to be a corporate PR stunt for the annual shareholders’ meeting. The Kellogg Company has shut them out, hired scabs, and still refuses to budge from their desire to make every community look more like the maquiladoras or sweatshops in Mexico, where they have been shifting North American production for decades.

On December 15th, The Kellogg Company will reward its institutional investors on Wall Street, who own almost 88% of stock, by paying out another quarterly dividend of $0.58 per share, totaling nearly $198 million. The company has also authorized $3 billion worth of stock buybacks since the end of 2017 to artificially inflate the stock price itself, far more than the $60 million that striking workers are asking for. Corporate opposition exposes the shriveled hearts found among the leadership of this supposedly family-oriented, yet publicly-traded corporation.

The Kellogg Company, what was once the largest employer and cornerstone for the local middle class, today employs 390 brave workers who are up against a powerful three-headed monster. As most in Battle Creek could describe, looking at the Kellogg Company as being all that different from the W. K. Kellogg Foundation (WKKF) misses the corporate forest for the trees. To this picture, it is important to add the WKKF Trust, a slightly more hidden entity, yet one central to Kellogg’s control.

The W. K. Kellogg Foundation Trust is a 501c3 charitable organization, while also being the single largest shareholder of Kellogg Company stock. The total value of all Kellogg Company stock is hovering around $22 billion. As of September 29th 2021, the WKKF Trust owns 17.30% of that, a total of roughly $3.75 billion with $34.25 million as a dividend being paid to them on 12/15. At the end of 2019, the last year data was publicly available, the WKKF Trust’s endowment had about $7.3 billion in total, but it’s now likely closer to $10 billion.

To anyone unfamiliar, a foundation uses the financial returns from the investments that make up its endowment as the money it gives in grants to non-profits each year. Technically though, in this case, the WKKF Trust owns the billions and WKKF’s annual budget, including the grants it provides non-profits, comes from this endowment’s returns. So when the Kellogg Company shifts production to places where people can be made to work in harsh conditions for pennies on the dollar, or tries to make all new hires in the USA more like low-paid temp workers, the WKKF Trust’s endowment can grow.

Then WKKF gives more in grants as an attempt to pacify opposition by showcasing an inclusive American Dream as disguise for what is, in reality, an ongoing nightmare for multi-racial populations located everywhere Kellogg’s calls “home.” They use the fund as a tool to divide and conquer, grants to constrain and co-opt opposition to their corporate vision of sweatshops everywhere.

It is supposed to be charitable, yet it enforces an overarching strategy of de-industrialization and decay. It is supposed to be about equity, yet enforces conditions of scarcity as a tool to divide and conquer across class, race, and gender. They manage layers upon layers of bureaucracy to enforce a system where people compete with one another for resources that are only scarce because the WKKF Trust’s five person board of directors arbitrarily decided that was so.

For this un-accountable board at the WKKF Trust, what would be the harm of immediately investing at least $5 billion of that endowment? You’d still have another $5 billion. That’s still a lot of money. More generally though, why do we allow a single un-accountable and un-elected board of directors to dominate this community?

The WKKF Trust could easily cover the labor costs to meet the needs of striking Kellogg workers. Instead of truly investing in Battle Creek and other communities affected by Kellogg’s, they enforce conditions of hardship. They dis-empower because they know that truly empowered communities would seek to abolish their control.

If the board of directors of the W. K. Kellogg Foundation Trust were elected, the world that the Kellogg Company has helped shape would look quite different. Imagine, for a moment, a more just alternative. An elected board of directors could turn over control of the WKKF Trust to workers and communities affected by the company. It could be a transparent and democratic process of participatory grantmaking like these detailed in Non-Profit Quarterly.

We would be the company’s single largest shareholder and oversee a $10 billion endowment. We could invest billions of that locally, in the immediate future, and everywhere the Kellogg Company has spread. By electing the board of directors at the WKKF Trust, we could implement a far better vision, including one that invests in labor unions to build worker power everywhere. And the company could actually be used to build truly sustainable food systems, those that organically feed everyone. We would be the ones truly in charge; people most affected by the decisions made by both the Kellogg Company and WKKF.

To all those progressive Senators from DC who have spoken out in support of the strike; it’s time for you to investigate the WKKF Trust! If you want to bring the company back to the negotiating table, call for an investigation into its single largest shareholder, one who wields grants as a weapon in service of a world of sweatshops.

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