Tyson Foods Rebuffed by Proxy Firms Over Dual-Class Share Structure

(Bloomberg) -- Two prominent shareholder advisory firms have criticized Tyson Foods Inc. for its dual-class share structure, which grants the family of the meat company’s founders outsized influence over the company.

Ahead of Tyson’s annual shareholder meeting next week, Glass Lewis & Co. is recommending votes against three incumbent directors of Tyson’s board --  Les Baledge, Mike Beebe and David Bronczek -- for not taking action on shareholder proposals that obtained significant support at last year’s meeting. One of the proposals was to hire a bank to come up with a plan to collapse its dual-class shares.

Glass Lewis also recommended against Jonathan Mariner, who is an executive of a public company and serves on three public company boards, saying his commitments “may preclude this nominee from dedicating the time necessary to fulfill the responsibilities required of directors.”

Institutional Shareholder Services Inc. is supporting the directors but says Tyson’s share structure is “problematic.” It also gave them poor governance rankings, and noted it will change its policy next year to generally vote against directors or boards if they continue to employ a multi-class structure with unequal voting rights.

Tyson, the largest U.S. meat company by sales, has been criticized for turning huge profits during the coronavirus pandemic even as the spreading virus sickened thousands of slaughterhouse workers, closing meat plants and sending prices soaring early in the pandemic.

The company pointed to its proxy statement saying that the dual-class share structure has been in place since 1986 and the board believes it’s in the best interest of shareholders. 

Tyson said in a statement that it has expanded disclosure of information about its diversity on its board and “seeks to nominate candidates with a diverse range of views, backgrounds, leadership and business experience.” 

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