Tyson Foods? Boss Received $3.5M Bonus

It’s been well-reported that John Tyson — president, chairman and CEO of Tyson Foods Inc. — received a 67 percent bonus increase to $3.5 million for the company’s fiscal year ended Sept. 28.

Tyson’s salary also increased 54 percent to $1 million. He also received $2.8 million of restricted stock in fiscal 2002 after not getting any in fiscal 2001, according to Securities and Exchange Commission filings.

But the chairman’s compensation for fiscal 2002 was based on a new employment agreement he entered into at the beginning of the fiscal year. The company said it implemented a new bonus plan in fiscal 2002 under which all employees work toward the achievement of a common corporate goal, with a companywide bonus pool based on a target of earnings before interest and taxes (EBIT).

Tyson Foods said the target EBIT was $1.04 billion for fiscal 2002, with no bonuses to be paid unless EBIT exceeded the threshold of $570 million. EBIT for fiscal 2002, as it relates to bonuses, was $899 million, making executives eligible for 72 percent of their targeted bonus, the filing said.

John Tyson, 49, was also granted 200,000 stock options in fiscal 2002, the same number of options he got in fiscal 2001. The options granted for fiscal 2002 have an exercise price of $9.32 a share, vested incrementally through 2006 and expire in October 2011, according to Dow Jones Business News.

Tyson Foods purchased IBP Inc. Sept. 28, 2001. The company paid down $789 million in debt by the fiscal year ended Sept. 28, 2002. By January, company spokesman Ed Nicholson said Tyson Foods has paid closer to $1 billion down in debt.

Tyson Foods also announced Jan. 2 that it would reduce the size of its board of directors from 15 to 10 members. The proposed nominees for the board, slated for approval at the company’s annual meeting of shareholders on Feb. 7, are:

• John Tyson, president, chairman and CEO

• Don Tyson, former senior chairman of the board

• Leland E. Tollett, former chairman and CEO of the company

• Barbara A. Tyson, a former vice president of the company

• Lloyd V. Hackley, president and CEO of Lloyd V. Hackley and Associates Inc.

• Jim Kever, founding partner of Voyent Partners LLC

• David A. Jones, chairman and CEO of Rayovac Corp.

• Robert L. Peterson, former chairman and CEO of IBP Inc.

• Richard L. Bond, the company’s Co-COO and group president, fresh meats and retail

• Jo Ann R. Smith, president of Smith Associates and former assistant secretary for marketing and inspection services of the U.S. Department of Agriculture.

Directors are elected for a term of one year or until their successors are elected and qualified.

Inside directors Gerald Johnston, Shelby Massey, Joe Fred Starr and Donald Wray and outside director Barbara Allen will not stand for re-election.