Processing Magazine

Tyson CEOs paid too much

January 16, 2008
Proxy advisory firm Proxy Governance Inc. recently recommended Tyson Foods Inc. shareholders withhold voting for nine directors at the meat producer''s annual shareholders meeting due to performance and pay concerns, the Associated Press reports. The advisory firm said Tyson has significantly underperformed in the past three years relative to a peer group made up of other meat producers and food companies. The firm added that the company''s management has not done enough to respond to industry issues that have cut into profit, such as export restrictions on beef and higher animal feed costs.

Tyson ended fiscal 2007 in the black after struggling, like all meat producers, to pay the higher animal feed prices. The costs jumped this year due to high prices for corn, which is used to make animal feed. Corn skyrocketed on demand for the alternative fuel ethanol, which is also made with the grain.

The advisory firm said it was also concerned that Tyson chief executives were paid too much in comparison to the leaders of similar companies, many of which performed better than Tyson during the past three years. The firm estimated they were paid 82 percent above the median paid to other CEOs in the peer group. In fiscal 2007, Chief Executive Richard L. Bond, who took office in May 2006, received compensation valued by the Springdale, Ark., company at about $24.6 million. About $20.8 million of that was paid in the form of stock and stock options, according to a proxy statement filed last month. Bond is one of the directors up for re-election to the board. Proxy Governance advised shareholders to withhold voting for him. Proxy Governance also recommended withholding votes for incumbent directors Don Tyson, John Tyson, Scott T. Ford, Lloyd V. Hackley, Jim Kever, Jo Ann R. Smith, Barbara A. Tyson and Albert C. Zapanta.