story by Kim Souza
ksouza@thecitywire.com
Tyson Foods shareholders convened in Springdale on Friday (Jan. 30) for their annual no-frills meeting, but there was plenty to celebrate on the heels of a record 2014 and strong start to 2015.
Tyson Foods Chairman John Tyson, a third generation family member of the now global meat company, said there were three pivotal achievements over the past 80 years that have helped to propel the company to its global heights.
“My grand dad founded this company on a shoestring in the midst of the depression. But over the years Tyson Foods took control of its own destiny. There are three times that stand out in my mind,” he said.
• The acquisition of Holly Farms in 1989 propelled Tyson Foods from a regional chicken processor to the No. 1 market share position in the U.S..
• In 2001, Tyson Foods acquired IBP for $3.2 billion, elevating the chicken company to the top of all meat U.S. companies and gave it the diversified protein business model that it still uses.
• In 2014 the $8.5 billion acquisition of Hillshire Brands was equally as important because Tyson said it better prepares the company for the future.
“WIth Hillshire Brands Tyson has become a house of brands,” he added.
SHAREHOLDER BUSINESS
Friday’s event also marked the company’s 52nd annual shareholders business meeting. In routine business procedure the shareholders approved its slate of directors to another one-year team. One longtime director Al Zapanta retired from service after 10 years. With a majority vote of 98.8% the following directors were elected: John Tyson, Kathleen Bader, Gaurdie Banister Jr., Jim Kever, Kevin McNamara, Brad Sauer, Donnie Smith, Robert Thurber and Barbara Tyson.
Shareholders also ratified the election of PricewaterouseCoopers as its independent auditor for this year with a majority vote of 99.61%.
The three shareholder proposals each presented by Mary Gallagher a representative from various environmental group were overwhelming voted down.
Shareholder Proposal No. 1 asked for a policy to address water impacts of business operators and suppliers. The shareholder asked the company to implement a water stewardship policy that will improve water quality for all the company-owned facilities and those under contract to Tyson Foods.
For: 10%
Against 86.78%
Proposal No. 2 strikes at the heart of the dual stock system at Tyson Foods that allows restricted Class B shareholders, the Tyson Family, to get a 10 to 1 voting advantage over the Class A shares. Proposal No. 2 asks the board to give each shareholder an equal vote.
The Tyson family trust owns 99.98% of the class B shares and through the limited partnership control 72% of the Tyson Foods total votes, according to the Proxy proposal. The shareholders point out that the family — a select few — controls the company regardless of what might be best for the shareholders at large.
For: 21.56%
Against 78.09%
Proposal No. 3 involves asking asking the company to prepare a report on its use of Palm Oil and its efforts to source that commodity in a sustainable manner. This shareholder group wants to see the report by May. 1.
The group noted that Tyson competitors such as Hormel, ConAgra and General Mills have already announced commitments to eliminate deforestation and human rights violations from their palm oil supply chain and to regularly report on their progress.
For: 9.51%
Against: 88.42%
OUTLOOK
Tyson Foods is a “cash machine” and that’s not expected to change in 2015, according to Chief Financial Officer Dennis Leatherby.
The company expects to earn $3.30 to $3.40 per share this year, which would be a 12% gain year-over-year. Leatherby said earnings have grown 19% over the past three-year period.
“We expect fiscal 2015 sales to approximate $42 billion as we integrate Hillshire Brands and continue to accelerate growth in domestic value-added chicken sales and Prepared Food sales. The synergies of the Hillshire merger will will exceed the $225 million synergy target for this fiscal year,” CEO Donnis Smith said.