Tollett back at the helm of Tyson Foods (Updated)

Leland Tollett is officially back in the front lines of the meat business.

Tollett, a former chairman and CEO of Tyson Foods and close associate of majority Tyson shareholder Don Tyson, is replacing Dick Bond as president and CEO of Tyson Foods, the company announced Monday (Jan. 5) morning.

The Springdale-based meat company said in a statement that Tollett would serve in the top post until a successor is selected.

In a November 2008 report from the Associated Press, Don Tyson acknowledged that he and his “lieutenants” Tollett and Buddy Wray were working with the company during a financially difficult time of high feed, fuel and other input costs.

Tyson Foods, the world’s largest meat company, reported Nov. 10 that its net income for fiscal year 2008 was $86 million, down 67.9 percent from $268 million in fiscal 2007. The company posted total revenue for fiscal 2008 of $26.86 billion, up  about 4 percent from $25.72 billion in fiscal 2007.

“After seven years of helping lead or leading the world’s largest meat company, I have decided it is in both my best interest personally, and the best interest of the company for me to move on and pursue other interests,” Bond said.

Ann Gilpin, an analyst with Morningstar, told Reuters News that it likely was not Bond’s decision to step down.

“I think the board was not pleased with the management and I think they also were probably a little spooked about what happened with Pilgrim’s Pride,” Gilpin said in the Reuters article. “I don’t think this choice was unilaterally made by Dick Bond.”

Pittsburg, Texas-based Pilgrim’s Pride, once the largest poultry processor in the U.S., recently filed for bankruptcy protection while it reorganizes.

Another long-time Don Tyson associated, Donnie Smith, was being named senior group vice president of Poultry and Prepared Foods, and will have overall responsibility for those divisions of the company.

Updated info

Kim Souza, a senior business reporter with The Morning News in Springdale, posted a smart and thorough story on the departure of Dick Bond and the return of Leland Tollett.

Highlights of Souza’s story include:

Tim Ramey, an independent analyst with D.A. Davidson & Co., reminded investors in a recent report that "Tollett’s main claim to fame during his former tenure as CEO was the 1992 acquisition of Arctic Alaska Seafood — one of the worst acquisitions in the company’s history."



D.A. Davidson also downgraded Tyson Foods shares from neutral to underperforming on the news, noting that the company’s beef and pork profits were being squandered by chicken losses.



"There were just too many cooks watching the soup, with the retired Don Tyson, Buddy Wray and Tollett all taking more active roles in the company in recent months," said Steve Kay, publisher of Cattle Buyers Weekly.



"I am not surprised at the news and suspect the Tyson family had a hand in Bond’s decision to depart because they control about 70 percent of the voting power with respect to the company’s dual class share structure," said Ann Gilpin, independent analyst with Morningstar.com.



She said the board is likely "spooked" by the recent bankruptcy of Pilgrim’s Pride and Tyson’s plunging stock price in recent months.



"My hunch is that there was a disagreement between Bond and the board about the company’s strategy to maintain chicken production, when the industry continued to post large losses," Gilpin said.