Tyson Foods shareholders had plenty to celebrate at this year’s shareholder meeting that was held virtually Thursday (Feb. 10) morning with the Springdale-based meat giant posting an impressive first quarter earnings report to begin fiscal 2022.
Tyson leadership is optimistic for the remaining three fiscal quarters that operating margins will improve forecasting annual sales between $49 billion and $51 billion this year. Analysts are forecasting an earnings increase of 11.2% this year.
Shares of Tyson Foods (NYSE: TSN) rose 11% Monday on the strong report and set a 52-week high price at $100.72 on Tuesday before settling to the $99.70 level by the time the meeting began on Thursday morning. The one-year target price for the stock was raised to $110 given the latest price rally.
The company celebrated 87 years of business on Thursday, dating back to founder John W. Tyson who established the company in 1935. The company incorporated in 1947 and Don Tyson, son of the founder, took the company public in April 1963. The initial public offering issued 100,000 shares of common stock at $10.50 each. The Class A shares are traded publicly with a market cap of $35.779 billion. The family retained 70 million Class B shares which do not trade publicly, but the shares hold a 10-to-1-vote advantage over Class A shares.
Tyson’s largest shareholder of Class A shares is The Vanguard Group with a holding of 32.44 million shares or 11.07% of the company. BlackRock Inc. is the second largest shareholder of Class A shares with 20.422 million shares, or 6.97% of the company. Board chairman John H. Tyson, grandson of the founder, is the largest individual shareholder of Class A share with about 1.28% of the company’s stock. The board of directors, including Tyson and company officers own a combined 5.413 million shares which is about 1.85% of the stock.
PLASTIC PROPOSAL REJECTED
At Thursday’s virtual meeting, a majority of shareholders approved the slate of 13 directors to a one-year term and the ratification of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the fiscal year ending Oct. 1. Shareholders did not approve the one shareholder proposal filed by Green Century Capital Management which asked the company to provide more transparency on sustainable packaging practices.
The proposal said Tyson Foods uses plastic packaging, including flexible plastic and polystyrene foam, which are not curbside recyclable. Only 9% of all plastic made in the last 60 years has been recycled. Flexible plastic, used widely by Tyson, represents 59% of all plastic production but accounts for 80% of plastic leakage to oceans. Microplastics can now be found in food and water, with one study finding humans may consume a credit card’s worth of plastic every week, the proxy statement noted.
Tyson said it is already undertaking such efforts and have been and will continue to work towards innovations in sustainable packaging.
“Given our current practices and disclosures, the Board believes that the proposal’s requested report would not provide material benefits or additional disclosure not already available to shareholders, and, therefore, this proposal is not in the best interests of the company or its shareholders,” the company noted in the proxy.
Tyson reduced its board seats from 15 to 13 this year, with CEO Donnie King being the only new addition. Former CEO Dean Banks left the company and the board last year. Also, Gaurdie Banister Jr. and Robert Thurber did not stand for re-election.
Tyson directors earned an annual retainer of $105,000 payable in quarterly installments. Directors also get stock valued at $160,000, with vice chairman and lead director receiving an additional $110,000 in stock that is payable 180 days after the director leaves the board seat. Payment stipends also go to directors who serve as chairman in various committees. The lead director, Kevin McNamara, and vice chairman Noel White for this coming year will receive $125,000. The four other committee chairmen receive $20,000. The annual stipends are paid quarterly.
Total pay to the 11 named board members for last year totaled $7.233 million. Average pay was between $285,000 and $265,000 with the exception of the lead director and Noel White who is still under a post-employment retainer for $1.15 million this year and $1 million next year. Tyson’s by-laws call for directors to step down following their 72nd birthday. The company made exceptions for Mike Beebe and Barbara Tyson this year saying these individuals possess skills and experience valuable to the company.
Following are the Tyson board members
• John H. Tyson, 68, chairman and grandson of the founder
• Les R. Baledge, 64, retired general counsel for Tyson Foods from 1999 to 2004.
• Mike Beebe, 74, former Arkansas Governor, member of the Governors’ Council of the Bipartisan Policy Center
• Maria Claudia Borras, 52, vice president, Oilfield Services, at Baker Hughes Company
• David Bronczek, 67, previously served as president and chief operating officer of FedEx Corp.
• Mikel Durham, 58, CEO of American Seafoods Group
• Donnie King, 59, President and CEO since June 2021. He joined Tyson Foods in 1984
• Jonathan Mariner, 67, chief administrative officer of Enjoy Technologies, former Walt Disney exec
• Kevin McNamara, 65, founding principal of McNamara Family Ventures, board member since 2007
• Cheryl Miller, 49, strategic advisor for JM Family Enterprises, a diversified automotive company
• Jeffrey Schomburger, 59, retired global sales officer at Procter & Gamble board member since 2016
• Barbara Tyson, 72, served as vice president at Tyson until 2002, became a consultant until 2011
• Noel White, 63, vice chairman of the board since Oct. 3, 2020; retired as Tyson CEO in 2020 after nearly 20 years with the company