Tyson Foods Inc. Chairman John Tyson ranks first among Fortune 100 company officials for compensation for personal jet travel, highlighting his family's grip on the meatpacking giant founded by his grandfather.

Mr. Tyson, who last served as a Tyson Foods executive a decade ago, received the most aircraft-related compensation in each year from 2012 through 2014, according to data compiled by Equilar Inc., which researches executive pay.

Mr. Tyson's total of $859,129 for private use of corporate aircraft in 2014—the most recent year for which Equilar compiled the statistics from proxy filings—was nearly 28% higher than that of Eric Schmidt, executive chairman of Google parent Alphabet Inc., who ranked second. Officials at Alphabet didn't respond to a request for comment.

The air-travel perks reflect how Tyson Foods, the largest U.S. meatpacker by sales, remains under the control of its eponymous family, corporate-governance specialists said. The Tyson family owns nearly all of the company's Class B "supervoting" shares—which each have 10 votes and give the family about 71% of voting power among all shareholders, according to federal filings. The family owns a stake equivalent to about 18% of all Tyson Foods stock, according to FactSet.

A Tyson Foods spokesman said Mr. Tyson declined to comment.

Shareholders of the Springdale, Ark., company are set to meet Friday for its annual meeting, where investors will vote on a proposal seeking to eliminate its dual-class structure, giving each share one vote, and another proposal to install an independent chairman. Proxy-advisory firms Institutional Shareholder Services Inc. and Glass Lewis & Co. in recent weeks backed both proposals.

The proposals are expected to fail, however, given the Tyson family's voting control. A similar one share, one vote proposal failed in 2015.

The stock structure, which Tyson Foods has had in place for about 30 years, isn't uncommon among publicly listed U.S. companies. Advocates say it can shield management from short-term pressures from Wall Street, promote longer-term investment and help prevent unwelcome takeovers. But some investors and proxy-advisory firms say it leaves other shareholders with comparatively little voice in how the company is run.

"It's certainly not a phenomenon that's going away," said Paul Hodgson, a principal at corporate-governance consultancy BHJ Partners LLC, citing younger technology companies like Alphabet and Facebook Inc. that maintain similar structures. For public shareholders, he said, "there are fewer pluses."

Tyson Foods, which traces its roots to a chicken-delivery business founded by John W. Tyson in 1935, ranks among the world's largest family-controlled companies by revenue, a list that also includes Wal-Mart Stores Inc., Volkswagen AG and Cargill Inc., according to data from the University of St. Gallen in Switzerland.

Tyson Foods listed shares in 1963. Don Tyson, John W. Tyson's son, took over as CEO and chairman in 1967 and led the business until 1991. John Tyson, son of Don Tyson, became chairman in 1998 and served as CEO from 2000 to 2006.

Tyson Foods defends its founding family's control in filings with the Securities and Exchange Commission.

"Every investor purchasing a share of our Class A common stock is aware of this capital structure, and many are attracted to our stock by the long-term stability that the Tyson Limited Partnership (TLP), our controlling shareholder, and the Tyson family provide to the company," said its proxy filing in December. "We believe our success is owed in large part to the leadership and vision the Tyson family has provided over the last 80 years."

Tyson Foods has registered six jets with the Federal Aviation Administration, and Mr. Tyson's contract allows him to use company planes for up to 275 hours each year, including flying other passengers when he isn't present, according to Tyson filings.

The Tyson spokesman said that while U.S. securities regulations require companies to disclose executives' personal aircraft use, there isn't a uniform methodology for calculating this, and other companies may calculate their totals differently than Tyson. Mr. Tyson's 2014 compensation for private jet use was nearly eight times that of Donnie Smith, Tyson Foods' CEO. Mr. Tyson's roughly $1 million in 2013 aircraft compensation was about $400,000 more than the next-highest executive, A.G. Lafley, then CEO of Procter & Gamble Co. Mr. Tyson also topped the list in 2012 with $860,520, according to Equilar.

A P&G representative said that for security reasons, its CEO is required to use company aircraft for all air travel.

ISS and Glass Lewis, which advise mutual funds and pension plans on how to vote in corporate governance matters, said Tyson Foods' setup leaves nonfamily shareholders without an equal voice in the boardroom.

The company has taken heat over corporate perks before. In 2005, the Securities and Exchange Commission alleged that Tyson Foods failed to disclose more than $1 million in perks, and made misleading or inadequate disclosures about other benefits. Tyson Foods, which didn't admit or deny wrongdoing, paid $1.5 million to settle the charges.

Analysts surveyed by Thomson Reuters expect Tyson Foods' fiscal first-quarter earnings per share to jump 16% to 89 cents when the company reports results Friday, despite revenue projected to decline 7% to $10.1 billion. Tyson shares have climbed 33% over the past 12 months, though they are down 2.6% since the end of last year.

Though investors may grumble over executive perks and dual-class shareholding structures, such companies often quell complaints by delivering results, according to Paul Lapides, director of the corporate governance center at Kennesaw State University.

"Oftentimes shareholders don't mind if you're treating yourself well, if you're treating everybody else well," Mr. Lapides said.

 

(END) Dow Jones Newswires

February 04, 2016 21:55 ET (02:55 GMT)

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