Stock Dispute

A plan afoot by Proxy Monitor to disrupt Tyson Foods’ Jan. 14 annual shareholders meeting doesn’t sound like it will do much damage.

The New York-based proxy voting adviser is recommending that Tyson’s shareholders vote for a proposal to abolish the company’s dual-class capital structure and withhold all votes for nominees to its board.

The California Public Employees Retirement System (CalPERS) is sponsoring the proposal, after previously denouncing Tyson’s tiered stock classifications.

Tyson’s proxy argues that the dual structure is needed to “promote stability,” “provide the company with greater financing flexibility” and to “preserve favorable tax treatment.”

The Springdale poultry producer has been focused on reducing its debt. But many stockholders and industry analysts wish the company would instead buy back some of its stock to give investors a much-needed reprieve from Tyson’s mediocre performance.

John McMillin, an analyst with Prudential Securities, says nothing will likely come of the planned coup d’etat since the Tyson family controls most of the company’s class B stock. The class B stock has 10 times more voting power than Tyson’s class A common stock.

“There are days as a Tyson Foods shareholder where I feel like a second class citizen,” McMillin says. “Proxy Monitor definitely has a point, but I don’t know that they’ll have much effect. They’re fighting city hall.”