Tyson Foods to celebrate 82nd birthday at annual meeting with new CEO
by January 30, 2017 6:28 pm 706 views
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Shareholders of Tyson Foods will convene on Feb. 9 at the Holiday Inn Northwest Arkansas Convention Center in Springdale for the meat giant’s 82nd birthday. John Tyson, board chairman and grandson of the company founder, will preside over what is typically a brief business meeting and shareholders will also likely hear from their new CEO, Tom Hayes, who will give a brief outlook and recap what was another profitable year — fiscal 2016 which ended Sept. 31.
In fiscal 2016, Tyson Foods posted sales revenue of $36.881 billion, down from $41.373 billion the prior year, but net profits rose 39% to $4.39 earnings per share.
Retiring CEO Donnie Smith has rotated off the board and Hayes, along with Jeffrey Schomburger, exec with Procter & Gamble, will stand for first-time election while eight directors seek re-election to a one-year term. Hayes and Schomburger were appointed to the board in November and December, respectively.
Directors seeking re-election include: John Tyson, Gaurdie Banister Jr., former Arkansas Govenor Mike Beebe, Mikel Durham, Kevin McNamara, Cheryl Miller, Brad Sauer, Robert Thurber and Barbara Tyson, aunt to John Tyson.
Though a public company, Tyson Foods is also controlled by the Tyson Family through a dual-class stock structure which has a 10:1 voting advantage per share. Tyson continues to strive toward having a largely independent board of directors and this year eight directors are deemed independent by the New York Stock Exchange rules.
While Durham was deemed an independent director, between 2014 through 2016, Tyson purchased more than $2.142 million of baked goods and supplies from CSM, the company Durham served as chief commercial officer until April 2016. Tyson reports Durham did not personally benefit from the business it did with her employer.
John Tyson, McNamara and Jim Kever — a director into early 2016 — also each have invested into a company where Kever serves as a director, but there is no business relationship between these directors, according to Tyson’s proxy filing with the Securities & Exchange Commission.
Last year, Tyson’s directors for the full year earned between $225,000 and $290,000 for their service. Aside from choosing a new slate of directors, shareholders will also vote on ratify PricewaterhouseCoopers as the company’s public accounting firm.
SHAREHOLDER PROPOSAL
Shareholders filed the paperwork to be heard on four proposals at this year’s meeting. First, shareholders are asking for more transparency related to Tyson Foods’ lobbying efforts locally and nationally.
“As shareholders we encourage transparency and accountability in the use of corporate funds to influence legislation and regulation both directly and indirectly. Tyson spent $5.6 million from 2012 to 2015 on direct federal lobbying activities based on Senate reports. These figures do not include lobbying expenditures to influence legislation in states where Tyson also lobbies but disclosure is uneven or absent. Tyson has drawn attention for its lobbying at the federal level,” shareholders stated in the Proxy filing.
The group would like to see all lobbying efforts made public to the audit committee or other relevant oversight committees and posted on the company’s website for the general public to access.
Tyson’s board recommends shareholders to vote against this proposal saying the proposal overstates the actual amount spent on lobbying. Tyson admits it does lobby from time to time to help shape policy decisions, but that it already has a number of policies and processes in place to ensure transparency and accountability. Tyson cites two separate groups within Tyson who monitor charitable and political donations.
The next proposal asks the company to foster greater diversity in its board of directors and to have a broader inclusion of women and minorities. The shareholder group notes in the filing that nearly two-thirds of the company’s workforce are people of color, yet only one director is black and there are no Hispanics on the board.
Tyson’s board is against this proposal saying “it’s not in the best interest of the company.” While Tyson agrees that it’s committed to diversity among the employee base, the directors believe the nominating committee for the board of directors are already committed to identifying nominees with diverse thought, background and talents stating that gender and minority status are already part of the consideration.
Next, shareholders want the company to amend its bylaws to implement proxy access with respect to choosing directors. The bylaws should require Tyson to include in proxy materials disclosures about the nominee such as their outstanding Tyson share holdings for the last three years along with over vetting information. The group would like the opportunity to nominate directors of their own choosing, noting that shareholder-nominated directors would not comprise more than one-fourth of the total directors.
Tyson is against this proposal and shows no interest in amending its bylaws.
Lastly, shareholders again are asking Tyson to adopt and implement a water stewardship policy at the company. This proposal has been made for the past several years and rejected each time. The group states that many of Tyson’s 83 processing plants release toxic substances into waterways. The filing states in 2014 Tyson discharged more than 20 million pounds of permitted toxic pollutants to waterways.
In 2015, Tyson paid a $540,000 judgment in Missouri after a wastewater discharge caused a major “fish kill.” That same year, Tyson exceeded wastewater permits 117 times, had 29 notices of violation, and 11 chemical releases, two representing potential financial or legal liabilities, the filing notes.
Again, Tyson Foods is against the proposal stating the company already has systems in place to reduce water usage and increase sustainability efforts.
“Water is an essential component of our food safety and quality processes, and we take actions to protect and preserve water quality, particularly in and around our facilities. In light of current policies and continuous efforts with respect to water conservation and quality, the Board believes the company is addressing the concerns raised in the proposal,” Tyson states in the Proxy filing.