The Big Vote at Tyson Foods, plus the end of a Facebook era, BP’s boring CEO pick, and Trian strategy vs. Disney strategy
This is Proxy Countdown. Welcome to the big show for the week of January 15th, 2024 alongside my tag team partner Matt Moscardi. I'm Damion Rallis. On today’s countdown:
The end of an era at the company formerly known as Facebook;
BP picks boring and familiar for its new CEO;
An update on the ongoing Proxy Cage Match at Disney;
Common stockholders pretending their votes matter at UniFirst;
And on our Big Vote, there’s a Big Say on Pay Chicken at the Big Chicken company
<TRADE WIRE BUMPER>
Trade Wire - BUY/SELL
Top Stories:
After 12 years as a director and 14 years as COO, Sheryl Sandberg is stepping down from the board of Meta Platforms at the company’s upcoming annual meeting of shareholders
Because of Mark’s absurdly despotic grip on the company–he controls 72% of influence and 61% of voting power–her resignation won’t really affect the leadership structure at the company.
To be fair, I always considered Sheryl to be the true CEO of Facebook. And, according to our metrics, she is an All-Star performer: batting .603 overall, including .877 in Earnings and .900 in Carbon.
BP has finally found its new CEO: current interim CEO and CFO Murray Auchincloss
Murray became interim CEO four months ago after Bernard Looney suddenly resigned after failing to reveal relationships with colleagues
BP said it carried out a search process to appoint the new CEO but I guess that search was a waste of time and money because Murray was already keeping the seat warm.
In a strange twist of BP love, Murray himself is also in a relationship with a BP colleague, but this courtship has been properly disclosed.
Speaking of new CEOs, The Goodyear Tire & Rubber Company announced that Mark Stewart will become CEO and director following a pressure campaign by shareholder activist Elliott Investment Management. Mark succeeds Richard J. Kramer, who will become Senior Advisor to the CEO.
Mark comes from Stellantis where he was COO of North America and where he oversaw the carmaker’s recent labor negotiations.
Mark’s golden hello package comes to just under $20M, including $4.3M in cash, $4.3M in fully vested stock, and $11.4M in additional equity. But why $19.975M exactly? Is this the corporate equivalent of selling a shovel for $19.99?
Finally, in notable board changes,
Former Ernst & Young CEO and Chair Mark Weinberger joins JPMorgan Chase
Linda Gooden will be stepping down at The Home Depot; and All-Star Freeman A. Hrabowski, III, batting .719 overall with 11% influence, is stepping down at McCormick & Company
<PROXY CAGE MATCH BUMPER>
PROXY CAGE MATCH
Let’s get to our Disney Disney Proxy Cage match update, where the company released its preliminary proxy statement ahead of the upcoming director battle.
Most notably and unsurprisingly, Disney has rejected Nelson Peltz’s Push for a Board Seat: “In deciding not to recommend Mr. Peltz, the directors considered a number of factors, including that in a two year quest for a seat on the Disney Board, Mr. Peltz had not actually presented a single strategic idea for Disney,” the company said in its filing.
Disney is also rejecting Trian’s other board nominee, former Disney CFO Jay Rasulo.
Also, contrary to earlier reports, Disney is rejecting the three board nominees put forward by investment firm Blackwells Capital, which had said its candidates would support CEO Bob Iger.
Disney cited the Blackwells’ nominees lack of experience as directors of large public companies.
Those nominees are:
Former Warner Brothers executive Jessica Schell
real estate investment executive Craig Hatkoff, who co-founded the Tribeca Film Festival with Robert DeNiro
And TaskRabbit founder and former CEO Leah Solivan
<VOTE RESULTS BUMPER>
VOTE RESULTS TABLE
Moving over to our vote results table:
At Zscaler, 17% of shareholders voted against co-founder/CEO/Chair Jay Chaudhry, which is saying something since he controls 38% of voting power.
On top of that, 28% rejected his Pay, which was a big fat $58 million last year.
It’s nice to have power. And to put a number on his power: Jay controls 74% of board influence.
Similarly, at UniFirst Corporation, where the Croatti family controls 53% of the company’s voting power, common stock holders voted out director Michael Iandoli but he will return to the board because the Croatti family, and their pesky Class B shares, like him.
And lastly, at Lindsay Corporation, 14% of voters are against the reelection of board chair Bob Brunner, who controls 14% of board influence.
At the same time, shareholders voted 99% in support of CEO Randy Wood and his 31% influence.
<THE BIG VOTE BUMPER>
THE BIG VOTE
Tyson Foods
AGM Date: February 8, 2024
General Observations
Ownership
Tyson Family Controlled 71%
Class B shares = 10x
Institutional voting power
Vanguard 4%
BlackRock 3%
Performance outliers:
Overall: .213
Cheryl Miller .677
Kevin McNamara .623
Donnie King .017
EBITDA .304
Kevin McNamara .512
Michael Beebe .505
Carbon .299
Cheryl Miller .631
Kevin McNamara .687
TSR .416
Cheryl Miller .758
Controversies .232
Cheryl Miller .938
Kevin McNamara .797
Votes
986,440,795 total votes
704,136,148 Tyson family votes
282,304,647 non-Tyson votes
Board stuff
leadership structure consists of Exec Chair, Vice Chair & Lead Independent Director, and CEO
the Board waived the Retirement Age By-law for:
Mike Beebe
Barbara A. Tyson
Woke stuff
In 2021, we announced our ambition to achieve net-zero GHG emissions across our global operations and supply chain by 2050, including Scopes 1, 2 and 3
1 POC (Mariner)
“We believe that diversity, equity, and inclusion (“DE&I”) is one of our strengths”
“Over $100 million invested through Tyson New Ventures, the venture capital firm of Tyson Foods, focused on changing the food industry through technology developments, in support of startup companies including those working to develop emerging proteins, new technologies for food and worker safety, and sustainable food production.”
No committees deal with safety or labor
Say on Pay frequency: every 3 years
Proposal 1: Election of 14 Directors
Annual Elections for ALL directors? YES
Director Slate
John H. Tyson 70/1984 39%
Chair (1998-); former CEO (2000-2006); Tyson family; son John R. Tyson is CFO
Other Public Company Directorships: None
Votes Against Last AGM: 8%
Les R. Baledge 66/2020 2% N
Former EVP/General Counsel (1999-2004)
Other Public Company Directorships: None
Previously: BMP Sunstone Corp. and Fairfield Communities
Votes Against Last AGM: 10%
Mike Beebe 76/2015 1% n
Former Governor of Arkansas (2007-2015)
Other Public Company Directorships: None
the Board waived the Retirement Age By-law and nominated him to serve on the Board for the coming year.
Votes Against Last AGM: 7%
Maria Claudia Borras 54/2021 1% c
EVP, Oilfield Services & Equipment, at Baker Hughes
Other Public Company Directorships: None
Votes Against Last AGM: 1%
David J. Bronczek 69/2020 3% cn
Former COO of FedEx
Other Public Company Directorships: Yellowstone Acquisition Group
Previously: International Paper
Votes Against Last AGM: 7%
Mikel A. Durham 60/2015 1% a
Former CEO of American Seafoods, a highly regulated privately held company which owns US resource rights to harvest and process fish
Other Public Company Directorships: None
Votes Against Last AGM: 4%
Donnie King 61/2022 5%
CEO (2021-)
Started career at Tyson in 1982; was self-employed from 2017 to 2019
Votes Against Last AGM: 1%
Nepo-brother: roughly $350k
Jonathan D. Mariner 69/2019 5% A
Former CFO of Major League Baseball (2002-2014)
Other Public Company Directorships: Rocket Companies; Five9
Previously: Ultimate Software, McGraw Hill Education
Votes Against Last AGM: 1%
Kevin M. McNamara 67/2007 3% a
Lead Independent Director (2019-); Vice Chair (2020-); Executive Committee with two Tyson family members; former CEO SignifyHealth, physician in-home health assessments
Other Public Company Directorships: SignifyHealth
Votes Against Last AGM: 2%
Cheryl S. Miller 51/2016 3% aC
Former CEO AutoNation (July 2019 to April 2020; former CFO AutoNation
Other Public Company Directorships: Celsius Holdings
Previously: AutoNation
Votes Against Last AGM: 2%
Kate B. Quinn 58/nominee
Vice Chair and Chief Administrative Officer of U.S. Bancorp since 2017
Other Public Company Directorships: Rite Aid
Previously: Ontrak
Votes Against Last AGM: 2%
Jeffrey K Schomburger 61/2016 1% c
former Global Sales Officer for The Procter & Gamble Company
Other Public Company Directorships: None
Votes Against Last AGM: n/a
Barbara A. Tyson 74/1988 32%
VP until 2002; Consultant until 2011; Tyson Family
the Board waived the Retirement Age By-law and nominated her to serve on the Board for the coming year.
Other Public Company Directorships: None
Votes Against Last AGM: 7%
Total board pay: $313,835
Including perks of an annual cash allowance ($12,000) and health insurance premiums ($11,835)
Annual cash allowance on top of $135,000 in board fees paid in cash
Noel White 65/2018 5%
Executive Vice Chair (2020-); former CEO (2018-2020)
Other Public Company Directorships: None
Votes Against Last AGM: 2%
Nepo-babies
Son -in-law employed by company: roughly $300k
Son employed by company: roughly $200k
Matt
FAMILY FIRM WITH MULTIPLE FAMILY MEMBERS ON BOARD? CHECK!
EXECUTIVE VICE CHAIR WHO WAS EX CEO? CHECK!
COMPANY / FAMILY COUNSEL ON THE BOARD? CHECK!
A SECOND VICE CHAIR WHO’S “INDEPENDENT” AND ON THE BOARD THE LONGEST OUTSIDE OF FAMILY MEMBERS? CHECK! (16 years)
A BUNCH OF IRRELEVANT OTHER BOARD MEMBERS? CHECK!
I won’t bury the lede: Vote recommendation hot take: ALL AGAINST
On a fourteen person board, they managed to cram in FOUR non-independent directors, all dudes, and only ONE of them is named Tyson
DOES NOT INCLUDE Babs Tyson, the second family member, who is considered “independent” since she retired in 2002
No word whether she retired from being a Tyson family member?
It’s not many companies you can find TWO ex-CEOs and the current CEO on the board - the current CEO Donnie King gets 5% influence for a reason, and that may be a generous estimate
Lead “independent” director ALSO happens to be the longest tenured non-family member at 16 years and on the audit committee watching the finances for the family - if you’re doing a napkin count of independence, this board has 6 of 14 that are CLEARLY not independent
That brings us to “implied conflicts” through connections with the family or company…
Mikel Dunham’s fish company is/was a supplier of fish to Tyson - also winner of “best footnote in a proxy”: Ms. Durham was not an independent director between October 2, 2021 and August 11, 2022. On August 11, 2022, the Board determined Ms. Durham to be independent and appointed Ms. Durham to serve as a member of the Audit Committee, effective as of the same date.
Tyson the lead sponsor of the HBCU National Championship in partnership with a MLB minor league team in Florida, John Mariner worked at MLB as CFO
The most blatant “find any black guy to put on the board so the wokies leave us alone” - Mariner is highly qualified to run a sports franchise OR to sit on a public board with a dual class dictator at the helm (Rocket Companies, Tyson Foods).
Honestly, even the two boards he’s on feels racist - like he likes fried chicken and needs financial advice
Jeff Schomburger and Dave Bronczek both chairs of United Way
Mike Beebe ex governor of Arkansas where the Tyson family is from originally, family sits on board of NW Arkansas Council, has deep ties to Arkansas
Adjusted vote totals:
John H Tyson 73%
Les R. Baledge 63%
Mike Beebe 76%
Maria Claudia Borras 98%
David J. Bronczek 75%
Mikel A. Durham 87%
Donnie King 98%
Jonathan D. Mariner 97%
Kevin M. McNamara 93%
Cheryl S. Miller 94%
Jeffery K. Schomburger 98%
Barbara A. Tyson 74%
Noel White 93%
Investors couldn’t even vote out someone when they have no power? Not even the SECOND ex CEO on the board, he still got a majority?
Here’s what you get for your adjusted non-voting nepo baby family board:
USD 21 million settlement of certified class action lawsuit over alleged collusion to fix chicken farmer wages with other companies
Iowa and Texas, United States: Criticism and lawsuits over the alleged failure to protect workers from COVID-19 exposure in meat packing facilities
Investigations and proposed class action lawsuits over alleged anti-competitive practices in the beef processing market
Department of Justice investigation into alleged price-fixing of broiler chickens; settlements reached for some related lawsuits
CFO's guilty plea and USD 440 in penalty and fees over public intoxication and criminal trespassing charges
Proposal 2: Auditor
PricewaterhouseCoopers
0.4% against 2023
Proposal 3: Say on Pay
98% yes in 2023
2023: Frequency of future non-binding shareholder advisory votes on executive compensation: 3 years
719,096,260 votes for 3 years
700,000,000 votes trust + 3,872,650 votes John H. + 61,231 John R. + Barbara 202,267 = 704,136,148 Tyson family votes
HOWEVER:
Exec Chair John H. Tyson: $8.8M
minimum annual base salary $1,050,000
personal use of Company-owned aircraft for up to 275 hours per year ($1,077,435 last year), use of Company security personnel consistent with past practice (the expense for which the Company estimates to be $80 per hour), security services of up to $50,000 annually and payment of an annual premium on a $7,500,000 life insurance policy.
Exec Chair Tyson: $1,077,435 for personal use of Company-owned aircraft, amounts for an additional cellular device and data storage services, an amount for event tickets, an amount for donation matching and an amount for an executive physical.
The Company has also agreed to reimburse Mr. John H. Tyson and “gross up” any tax liability incurred by Mr. John H. Tyson from the receipt of any perquisites.
made purchases of protein from the Company in the amount of $150,712
CFO John R. Tyson
On November 6, 2022, Tyson was found asleep in a Fayetteville home in a woman’s bed
Tyson was arrested and charged with criminal trespassing and public intoxication.
Tyson pleaded guilty to criminal trespassing and public intoxication in January 2023
$3M total pay
Aircraft perks
Exec Chair Tyson: $1,077,435 for personal use of Company-owned aircraft, amounts for an additional cellular device and data storage services, an amount for event tickets, an amount for donation matching and an amount for an executive physical.
CEO King: $149,241 for personal use of Company-owned aircraft and an amount for donation matching.
VOTE AGAINST
SHPs
Shareholder proposal regarding corporate climate lobbying
Shareholder proposal regarding the Company’s labor practices
an independent third-party audit assessing the effectiveness of the Company’s policies and practices in preventing illegal child labor throughout its value chain
In March 2023, a Department of Labor (“DOL”) investigation found the use of illegal child labor in Tyson’s Arkansas and Tennessee facilities.
These children, employed by Tyson contractor Packers Sanitation Services Inc., worked during the night shifts and were exposed to dangerous chemicals and meat processing equipment like back saws and head splitters.
The investigation found 7 children working in Tyson facilities and assessed the penalty at $105,966, the maximum penalty under federal law.
DOL investigations into illegal child labor, including 600 ongoing investigations, highlight the systemic nature of the risk.
Despite Tyson’s no tolerance policy for the use of illegal child labor, the Company does not disclose information on how its commitment is implemented.
Furthermore, as 10 states have introduced bills to roll back child labor protections during the past 2 years, the majority of which are home to Tyson meatpacking plants, Tyson has not opposed any of the bills.
Arkansas, where Tyson is headquartered, recently approved one such law.
AGAINST: “The requested independent third-party audit assessing the effectiveness of the Company’s policies and practices in preventing illegal child labor throughout its value chain is unnecessary and duplicative because the Company has already strengthened its policies and practices in this area which include a robust system of checks and audits following the allegations against PSSI and other sanitation providers.”
VOTE FOR
Shareholder proposal regarding deforestation-free supply chains
Shareholder proposal regarding a circular economy for packaging
