The changes aren't part of an agreement with the investor, a Jana spokesman said. The grocery chain asked the shareholder to accept a two-year standstill request in exchange for putting some of its proposed candidates on the board, but that deal was rejected. Jana opted to keep all its options open pending further changes at the company, the spokesman said.
Whole Foods, based in Austin, Texas, declined to comment. The board plan was previously reported by Dow Jones. The company's shares initially jumped on the news before reversing gains and declining 0.6 percent to $36.35 at 2:10 p.m. in New York.
When it disclosed its stake, Jana assembled a team of retail and food experts to help diagnose and fix what's ailing the grocery chain. The firm has also lined up board members for a potential proxy fight that would occur next year. The average tenure on the Whole Foods board is roughly 14 years, which has raised alarms among corporate-governance advocates.
Whole Foods hired the boutique investment bank Evercore Partners to help defend itself against Jana, another person familiar with the situation said.
Mackey faces an uphill battle in trying to turn around Whole Foods. Though the company pioneered the market for organic groceries, it's losing market share to mainstream supermarkets, which often charge lower prices.
But the executive has taken it upon himself to revitalize the chain he helped start in 1980. After six years of sharing a co-chief executive officer role with Walter Robb, Mackey took the job on a solo basis at the end of 2016.
He's also pursuing a sideline as an author and food advocate. Mackey's new book, "The Whole Foods Diet," makes the case for the health benefits of a vegan lifestyle.
That project, coming at a time of crisis for Whole Foods, has raised eyebrows on Wall Street. A recent research note from Barclays Plc questioned whether Whole Foods management was spread too thin by "non-core initiatives," mentioning Mackey's book tour as an example.
In a bid to help shed its image for being overpriced, Whole Foods launched a new store format last year called 365 that is aimed at younger, budget-conscious shoppers.
So far, the company has opened three locations on the West Coast and another in Texas. But it has said little about results at the stores, which are named for Whole Foods' private label brand.