There is a battle of wills going on right now that stretches from the tomato fields of Florida to the highest echelons of Wall Street.

On one side, you have Nelson Peltz, the wealthy hedge fund manager and Trump donor whose firm, Trian Partners, oversees around $10 billion in assets. Peltz is worth $1.7 billion and owns a $123 million estate in Florida — and that’s just one of his lavish homes.

On the other side, you have thousands of low-wage Florida farmworkers, and their grassroots organization, the Coalition of Immokalee Workers (CIW).

The two sides are at odds over the social responsibility practices of Wendy’s, the fast food mega-chain. Peltz, his hedge fund firm Trian, and the other partners who own Trian effectively own Wendy’s. They are the company’s biggest shareholders: Trian owns 12.4 percent of Wendy’s stock, and Peltz and his Trian colleagues also have large personal shareholdings in Wendy’s. Trian dominates Wendy’s board. Peltz himself is the chairman and Trian President Peter May is vice-chair. Peltz’s son is on the board, too.

For years, CIW, a widely recognized human rights organization, has been campaigning to get Wendy’s to join the Fair Food Program, which ensures better wages and safer working conditions for farmworkers. The Program, for which CIW received a Presidential Medal of Freedom from President Obama, was recently declared by 2019 Pulitzer Prize finalist Bernice Yeung to be a “#MeToo-era marvel” because it “not only creates real consequences for harassment but also prevents it from happening at all” in agriculture. Wendy’s just needs to agree to join up and only buy from growers that adhere to the Fair Food Program’s human rights-based code of conduct, and to pay a premium to improve farmworkers’ wages. Walmart, McDonald’s, Burger King, Taco Bell and a host of other major brands are on board with the Fair Food Program.

But not Peltz and Wendy’s.

Peltz, like other hedge fund billionaires opposing workers’ human rights campaigns in the companies they own, may be ignoring some of his own key partners: pension funds and other progressive institutions that invest in Trian.

Union members, liberal universities and progressive nonprofits might be upset to learn that their money is propping up a Wall Street billionaire who refuses to do right by low-wage farmworkers.

A significant percentage of the $10 billion in assets that Trian oversees comes from clients like union members’ pension funds, liberal universities, and progressive nonprofits and foundations — all of which might be upset to learn that their money is propping up a Wall Street billionaire who refuses to do right by low-wage farm workers.

Three Public Worker Pension Funds

Just three of Trian’s clients alone — the pension funds for California teachers, New York public employees and teachers in Ontario, Canada — account for around 20 percent of all the assets Trian reports to be overseeing.

These three big clients hold billions of dollars in trust for stakeholders and communities that are overwhelmingly pro-worker — including hundreds of thousands of current and retired union members who care deeply about worker rights and social justice.

And, as the table below shows, while these pension funds are some of Trian’s biggest clients, their investments with Trian amount to just a small sliver of their overall portfolios. In other words, these funds are more important to Trian than Trian is to these funds:

Trian client Amount invested with Trian Percentage of all assets Trian oversees ($10 billion) Percentage of all assets client invests California State Teachers’ Retirement System (CalSTRS) $1,007,186,000 10% .0043% (of $233.9 billion) New York State and Local Retirement System (NYSLRS) $618,000,000 6.18% .00298% (of $206.9 billion) Ontario Teachers’ Pension Plan (OTPP) Over $300,000,000 Over 3% .0015% (of $191.1 billion) Totals $1,925,186,000 19.18% .0043% or less is each case

The California State Teachers’ Retirement System (CalSTRS) manages the pensions of California’s teachers. It claims 949,512 total members and beneficiaries — many of whom are union members. The CalSTRS board contains several members that are associated with labor unions that support workers, including its chair, Sharon Hendricks, who is affiliated with the California Federation of Teachers, and Harry Keiley, its vice chair, who is affiliated with the California Teachers Association. CalSTRS also has a record of severing its investments from industries engaged in harmful practices, like private prisons, dirty coal and firearms.

CalSTRS is a major client of Trian, with over $1 billion invested as of last June, and it clearly has access to Peltz. For example, CalSTRS Chief Investment Officer Christopher J. Ailman sits alongside Peltz on a nine-member advisory board for Delivering Alpha, a financial conference that will take place on September 19 in New York City. Trian has also spent over $123,000 since 2015 lobbying CalSTRS (as well as the California Public Employees’ Retirement System) on the issue of “investments.”

The New York State and Local Retirement System (NYSLRS) is the state public employee pension fund and the pension fund of police and firefighters. It claims a total of 1,122,626 members, retirees and beneficiaries, including many union members. NYSLRS has $618 million invested with Trian as of last March.

The Ontario Teachers’ Pension Plan (OTPP) is, according to its website, “Canada’s largest single-profession pension plan.” It represents 327,000 teachers and retirees. The OTPP has over $150 million invested in two separate Trian funds — so, over $300 million in total. It’s worth noting that OTPP doesn’t reveal the exact amount of its total investments with Trian, so it’s possible that the amount is much more than $300 million.

The OTPP’s board includes the former general secretary of the Elementary Teachers’ Federation of Ontario, a union which represents 78,000 members in the Ontario public school system.

Just these three clients together — CalSTRS, NYSLRS and OTTP — invest over $1.918 billion with Trian — about 20 percent of all funds Trian oversees.

SEIU Members’ Pension Fund Invests With Trian

In addition, members of one of the most powerful and progressive unions in the country, Service Employees International Union (SEIU), appear to have their pensions invested with Trian. The health care workers’ pension fund of SEIU affiliate 1199SEIU had $16,106,742 invested in three Trian funds as of the end of 2017.

The pension fund — which is governed by a board of trustees of which half of the members are designated by the union — has a relatively small investment with Trian, a drop in the bucket of its overall portfolio. 1199SEIU Trustees — and SEIU’s progressive members — might very well be troubled to learn that their retirement funds are invested with a hedge fund that is standing in the way of the Fair Food Program, which has been widely recognized as one of the most effective models to combat human rights abuses in U.S. agriculture.

SEIU more broadly has been outspoken in its support for the Coalition of Immokalee Workers in the past. It appears as an organizational endorser of the Alliance for Fair Food, a network of allies who support the CIW, and representatives from SEIU locals have rallied in support of the CIW and at conferences with the CIW.

The University of Chicago Invests With Trian

At least one major U.S. university also invests with Trian: The University of Chicago.

Trian’s president and one of its founding partners, Peter W. May, is an emeritus trustee of the University of Chicago and a life member of the advisory council of the University of Chicago Booth School of Business. May — who himself is listed in Wendy’s most recent proxy statement as a major shareholder of the company’s common stock — is also the vice chair of Wendy’s board, sitting right next to Peltz at the top of the company’s corporate governance.

Because of May’s official positions with the University of Chicago, the school is required to disclose in its Form 990 filings any payments it made to Trian and May. According to the last six years of the University’s available records, it has paid Trian $6,305,866 in management and incentive fees from mid-2012 to June 2018. The highest yearly fees — $2,145,729 — were in the 2014-2015 fiscal year and the lowest — $620,000 — were in the 2017-2018 fiscal year

While the university doesn’t disclose how much it invests with Trian, hedge funds typically charge clients around a 2 percent fee of all assets managed and around a 20 percent share of any gains. Based on the most recent known fees of $620,000 paid to Trian by University of Chicago, we can conservatively speculate that the University invests at least $10 million with Trian.

Many members of the University of Chicago campus community appear to hold values that stand in stark contrast with Trian and Peter May’s refusal to join the Fair Food Program. For example, workers across the school recently formed the University of Chicago Labor Council, which unites all campus unions “to build inter-union solidarity and worker power with the community” and to “organize together for a better future.” They held a rally this past May Day “to advocate for workers’ rights at UChicago and in the broader South Side community.”

The school’s Graduate Student Union has also been very active , and undergraduates have formed solidarity efforts to support campus labor action. Moreover, calls for opposing unethical corporate practices are nothing new to the University of Chicago community: In 2016, more than 250 faculty members signed a call for the university to divest from its fossil fuel holdings.

Trian’s Nonprofit Clients

Several other clients of Trian include other well-meaning foundations, nonprofit organizations, public bodies and more pension funds:

Colorado Health Foundation seeks to “improve the health of Coloradans” and “serve Coloradans who have low income and have historically had less power or privilege.” It has $29,324,813 invested with Trian, according to its most recently available filing.

The Waitt Foundation, which is dedicated to protecting the oceans, has $4,164,702 invested with Trian, according to its most recently available filing.

The Joyce Theatre Foundation has $1,078,539 invested with Trian, according to its most recently available financial report in 2016. The foundation supports the Joyce Theater in Chelsea, New York City.

The Texas Treasury Safekeeping Trust Company, which manages tens of billions in state funds, has $85,069,000 invested with Trian, according to its last financial report (from May 2015) where it listed its investments.

The Arkansas Teacher Retirement System has $154,537,605 invested with Trian as of June 30, 2018 (which includes $45,281,522 in unfunded commitments).

The Harris Family Foundation, based in Chicago, has $3 million invested with Trian as of February 2017. The Harris Family Foundation gives to a host of charities and causes.

Disney Foundation May Be Invested With Trian

Interestingly, the Walt and Lilly Disney Foundation may also be invested with Trian. A filing from 2013 reveals an investment with Trian with a market value of $3,218,453. The Disney Foundation filings stopped disclosing specific investments after 2013.

Abigail Disney, the granddaughter of Roy Disney, who was the co-founder of Walt Disney Productions, has been a vocal supporter of the Coalition of Immokalee Workers. Just this summer, she spoke out against unfair labor practices at Disney World on Democracy Now!

How Will Investors React?

Peltz and Trian care deeply about maintaining and expanding their relationships with big institutional investors like pension funds. For example, as mentioned above, Peltz sits on the advisory board for the upcoming 2019 Delivering Alpha conference, a major annual investor conference, alongside several chief investment officers of the major pension funds, including the California State Teachers’ Retirement System. Peltz will also be a speaker at Delivering Alpha.

There is ample precedent for activism around pension fund financing of questionable corporate labor practices.

Meanwhile, there is ample precedent for activism around pension fund financing of questionable corporate labor practices that are incongruent with those funds’ ethical standards. Take CalSTRS, for example. Toys R Us workers protested CalSTRS’ investments with Wall Street firms that bankrupted their employer. More broadly, CalSTRS has formally stated that its values include addressing burning issues like the climate, the opioid crisis and the gun crisis. As mentioned, it has divested from corporate areas — from coal to private prisons — it deemed unethical.

Moreover, in the wake of the #MeToo movement, CalSTRS board of trustees chair Sharon Hendricks has joined a group of 13 California female pension fund trustees “to improve corporate disclosures on sexual harassment, violence and misconduct,” according to the Los Angeles Times. According to Pensions & Investments, the Trustees United created four principles to help “recognize the risk to investors that sexual harassment and misconduct create,” asserting that corporations must ensure “a work environment free of sexual harassment and violence.”

Notably, while agricultural workers like tomato pickers are some of the most vulnerable targets of sexual harassment and violence, the Fair Food Program has proven to be a tested preventative that is “unique in the country,” according to PBS’s Frontline.

Today, the question remains: How will major worker and union pension funds respond to Trian and Peltz’s refusal to follow the examples of companies like Walmart and McDonald’s to do right by farm workers by joining the Fair Food Program?

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