Tyson Foods’ annual profits boost 2015 executive income despite lower bonus pay

by Kim Souza (ksouza@talkbusiness.net) 125 views 

Tyson Foods reported record revenue of $41.373 billion in fiscal 2015, rising 10.1% from the prior year, but that did not equate to higher bonus pay for its top executives, according to the meat giant’s recent Proxy filing with Securities and Exchange Commission.

That said, the top five executives at Tyson Foods did see their total compensation boosted in 2015, thanks to an average 3% salary increase with heftier stock and option awards than in the prior year.

CEO Donnie Smith’s total 2015 compensation of $12.627 million was up 3.28% from the  $12.225 million earned in the year-ago period. While most of that money was paid in deferred compensation, Smith still saw more than $3.35 million in salary and bonuses last year.

The 56-year-old Smith earned a base salary of $1.124 million, stock awards of $2.737 million, stock option awards of $3.326 million, incentive bonus of $2.226 million, $2.446 in deferred compensation, and $765,861 in other compensation such as income tax reimbursement, life insurance premiums and use of the corporate airplane.

Smith entered into a new three-year employment contract with the company on Nov.19,  which provides for, among other things, an annual salary of $1.175 million and the same benefits as his previous contract, namely the incentive bonuses, deferred stock and option compensation as well as the perquisites such as income tax reimbursements and up to 50 hours per year of annual use of the corporate aircraft.

John Tyson, 62, board chairman and grandson of Tyson Foods founder, earned $8.753 million in total compensation in 2015. His salary of $910,089 increased just under 3% from 2014. As board chairman Tyson is not involved in the day-to-day management of the company, but works as its “Goodwill Ambassador” as well as convening and overseeing the board’s meetings and consulting on behalf of the company.

Tyson’s employment contract expires in November 2017, and until that time he is to earn a base annual salary of no less than $850,000. He also participates in the company bonus incentive plan for which he earned $1.802 million last year. The contract entitles him to stock and option awards which were $ 2.19 million and $2.661 million, respectively, in 2015. Another part of his compensation is personal use of the corporate aircraft which totaled more than $818,000 in fiscal 2015. The company also pays the premiums on his $7.5 million life insurance policy and reimburses his tax liabilities. The total other compensation paid on behalf of Tyson in fiscal 2015 totaled $1.189 million.

Chief Financial Officer Dennis Leatherby earned considerably less than the other four executives noted in the filing. Leatherby’s total compensation in 2015 was $4.477 million, down from $4.692 million earned in 2014. Leatherby’s total 2015 income included a higher base salary of $640,862, up 6.75% from a year ago. His stock and option awards totaled $1.64 million last year and his bonus of $930,687 was 34% less than in the prior year. Leatherby’s other compensation totaled $148,735, which consisted of tax reimbursements, life insurance premiums paid along with contributions on his behalf to the company’s executive savings and retirement plans, $54,216 and $10,600, respectively.

King, who oversees Tyson Food’s North American division which includes the merger of Hillshire Brands in 2014, earned total compensation of $7.826 million last year, His total earnings were rose 15.8% in the prior year. His base salary rose to $831,606 with $4.16 million in stock and option awards. These compensation elements rose to $4.991 million in 2015, more than the $3.696 million paid to King in the year before. King’s bonus pay was $1.355 million, down from $1.808 million in fiscal 2014. The other compensation King received last year totaled $282,815, and most of that was personal use of the corporate aircraft.

Noel White, who took over Tyson Foods’ poultry division management following the Hillshire Brands deak, saw the biggest bump to his overall earnings in 2015 thank primarily to expenses incurred with his appointment to poultry president. White’s total compensation topped $8.525 million which was largely made up of deferred compensation such as stock awards ($2.125 million), options award ($1.367 million), other deferred compensation ($1.414 million). White also was reimbursed for his tax liability ($710,913), and he also recovered relocation expenses of $588,320 which include the loss on the sale of his residence. White’s base salary rose to $753,981 in fiscal 2015, compared to $711,114 he earned the prior year overseeing the company’s fresh meats business in Dakota Dunes, S.D.

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