Whole Foods Market's new slate of directors may not be enough to quell activist investor fears.
Jana Partners, which holds a nearly 9 percent stake in the company, is reportedly pleased with the grocery chain's decision to shakeup its board, however still has concerns about how Whole Foods plans to address operational issues, sources close to the matter told CNBC.
The activist investor is also worried that the company's newly appointed board members do not have the grocery experience to initiate a successful turnaround.
Shares of Whole Foods were up as much as 4 percent on Thursday, last changing hands at $37.58 a share.
The supermarket chain on Wednesday announced a big shake-up of its board and named a new CFO as it works to turn around its struggling business, which has seen seven straight quarters of same-store sales declines.
Keith Manbeck was tapped for the chief financial officer post, effective May 17. Most recently, Manbeck was senior vice president of digital finance, strategy management and business transformation at Kohl's.
The company appointed to its board Ken Hicks, CEO of Foot Locker; Joe Mansueto, executive chairman of Morningstar; Sharon McCollam, the former executive vice president and CFO of Best Buy; Scott Powers, CEO of State Street Global Advisors; and Ron Shaich, CEO of Panera Bread.
In late 2016, Whole Foods implemented a new board succession plan that was more in-line with policies adopted by other companies.
The company in November established a 15-year limit on the service tenure of new board members, and also added Google exec Mary Ellen Coe to the board. Coe was the first new board appointee to the board since 2008.
Jana reportedly rejected and offer to add two nominees to the board because it would have meant that they would have to adhere to a standstill agreement until 2019. The activist investor is still keeping its options open, however. Sources told CNBC that the firm could still call a special meeting to push for its own slate of board nominees.
Whole Foods has been under pressure from Jana and Neuberger Berman, which owns a stake of just under 3 percent in the company, who have called on Whole Foods to sell itself. The investors have criticized Whole Foods for its poor performance, and have suggested the chain could be merged with another grocer.
On April 10, Jana disclosed a nearly 9 percent stake in Whole Foods and suggested the "shares are undervalued and represent an attractive investment opportunity."
Whole Foods' stock has fallen sharply since peaking at $65.31 in 2013.
Over the past year, Whole Foods shares traded as low as $27.67, but since Jana announced its interest, the stock has rebounded.
— CNBC's Scott Wapner contributed to this report.