Chairman and chief executive officer, Tyson Foods
Born: September 5, 1953, in Springdale, Arkansas.
Education: Southern Methodist University, BA, 1975.
Family: Son of Donald John Tyson (a food company executive) and Twilla Jean Womochil; married Kimberly McCoy; children: two.
Career: Tyson Foods, 1975–1993, North Carolina complex manager, vice president of marketing for corporate accounts, purchasing manager, retail-sales manager for Northeast Region; 1993–1998, president of Beef and Pork division; 1998–2000, chairman; 2000–, chairman and CEO.
Awards: Man of the Year, Arkansas Poultry Federation, 1994; Citizen of the Year, March of Dimes, Little Rock, Arkansas, 2000.
Address: Tyson Foods, 2210 West Oaklawn Drive, Springdale, Arkansas 72762-6999; http://www.tysonfoodsinc.com.
■ Expectations were not particularly high when in 2000 John H. Tyson was confirmed as chairman and chief executive officer of Tyson Foods, the giant poultry-processing company founded 65 years earlier by his grandfather. Tyson had a somewhat checkered past, having been effectively sidelined from business by nasty twin addictions to cocaine and alcohol in the late 1980s. Although he had worked in the family business since his teens, through much of his early career he had been given relatively marginal responsibilities. Tyson had been named chairman of the company in 1998 but had shared responsibilities for leading the company with the then CEO Wayne Britt; it was Britt who won praise for leading Tyson Foods to a sharp jump in earnings in the late 1990s. To some outside observers it seemed that Tyson had little more going for him than the family name.
The skeptics and naysayers were in for a surprise. Under Tyson's direction, Tyson Foods emerged as the world's largest
protein-processing company largely on the strength of its 2001 acquisition of the South Dakota–based IBP, a giant processor of beef and pork. That acquisition, as engineered by John Tyson, accomplished what his father, Donald J. Tyson, had attempted but failed to do during his tenure as chairman and CEO—namely, to successfully diversify beyond the confines of the poultry business. As of early 2003 Tyson Foods was producing roughly 25 percent of all the meat products consumed in the United States, according to Greg Lee, the company's co–chief operating officer and group president for food service and international business.
Even more impressive, especially for company shareholders, was the impact of Tyson's achievements on the company's bottom line. In the fiscal year ending September 30, 2002, the company's sales more than doubled to $23.4 billion from the roughly $10.8 billion of the previous year. Profits for fiscal 2002 totaled $383 million, more than three times the company's profits of $106.6 million in fiscal 2001. In fiscal 2003, despite a 75 percent jump in fourth-quarter earnings, profits for the year totaled only $337 million, or $0.96 a share, down from 2002's $383 million, or $1.08 per share. However, revenue in fiscal 2003 was up, topping $24.5 billion, as compared with the $23.4 billion of the year before.
John H. Tyson, grandson of the Tyson Foods founder John W. Tyson, was born in Springdale, Arkansas, home of the family business, on September 5, 1953. At the time of Tyson's birth his father, Donald J. Tyson, was manager of the company's Springdale plant. His mother, Twilla Jean, devoted her energies to raising Tyson and his sisters, Cheryl and Carla. Two years after Tyson's birth his father was promoted to president, a post he held until 1967 when he succeeded John W. Tyson, who had passed away, as chairman and chief executive officer. While attending Springdale High School, John H. Tyson began working weekends in the family company's plants.
In the summer of 1969 Donald Tyson arranged for his 16-year-old son to spend the summer working at a company poultry-processing plant in Green Forest, Arkansas. According to a 2002 profile of John H. Tyson in Fortune , part of his responsibilities involved the unloading of chicken coops from a truck and placing them on a conveyor belt. After watching a longtime plant employee demonstrate each step in this process, Tyson noted, "I said to myself, 'That didn't look difficult'"; when the teenager attempted to replicate the task, he grabbed onto a coop and hefted it head-high but made the mistake of tilting it the wrong way. As a result, the chicken excrement lining the bottom of the coop slid in his direction. "It hit me right in the face," Tyson recalled, "and slid down the front of my shirt" (May 13, 2002).
After graduating from high school, Tyson enrolled at Southern Methodist University in Dallas, Texas, to study business administration. When he received his bachelor's degree in 1975, he returned to Springdale to take his place in the family business. Over the next several years he worked his way through a series of farm, sales, and purchasing positions, none of which were particularly demanding from a management standpoint. Largely on the strength of his family ties, Tyson was appointed to the company's board of directors in 1984. The latter half of the 1980s found Tyson in the grip of a double addiction to alcohol and cocaine. Fortune reported that during a 1998 legal proceeding Tyson acknowledged the magnitude of his substance-abuse struggle: "The only reason I was on the payroll was because I was the son of the boss. Any other corporation, I would have been thrown to the wolves" (May 13, 2002).
With the support of his family Tyson entered a drug rehabilitation program where he successfully conquered his addictions. He returned to Tyson Foods with renewed energy and determination to succeed. In 1993, as a measure of confidence in his son, Donald Tyson appointed John as president of the company's fledgling meat and seafood businesses, segments in which the older Tyson placed great hope for the future. According to Fortune , Tyson Foods' early foray into nonpoultry processing was abandoned by the late 1990s as impractical; the company ran into problems adapting its time-tested poultry-processing techniques to other meats and seafood.
Despite this disappointing failure Donald Tyson remained confident that his son was ready for greater responsibility. Effective October 1, 1998, John succeeded the outgoing Leland Tollett as chairman. At the same time the company tapped the chief financial officer Wayne Britt to assume Tollett's responsibilities as CEO. Tollett expressed confidence that both of his successors would carry the company to greater heights. According to a corporate press release, after citing the achievements of John H. Tyson's grandfather and father, Tollett observed: "I believe that our shareholders, team members, and associates will continue to prosper and grow with continued family leadership at the highest level" (September 25, 1988).
Roughly 18 months after taking over as chairman, Tyson succeeded Britt as CEO when the latter abruptly resigned in April 2000. According to a report by Kyle Mooty in Arkansas Business , Britt said that although his adult life had been dedicated exclusively to Tyson Foods, "I am leaving because our transition to a new generation is complete and, frankly, I would like time to pursue other interests" (April 17, 2000). Britt's resignation ended the split management of the company and gave Tyson complete control. Assessing the company's future prospects for Arkansas Business , the New York–based security analyst John McMillin said he thought Tyson would turn in a creditable performance as CEO: "I think he'll be highly motivated, and he's walking into the job at a good time in the cycle. There should be less competing proteins around next year" (April 17, 2000). In October 2000 Britt was named nonexecutive chairman of Spectral Fusion Technologies, based in the United Kingdom.
Although it was originally his father's dream to successfully move Tyson Foods beyond the boundaries of the poultry-processing business, it fell upon John to get the job done. Only months after he took over as CEO of Tyson Foods, word spread through the food-processing industry that IBP, the giant meatpacker based in South Dakota, was entertaining acquisition offers. The first bid for IBP came in the form of a leveraged-buyout proposal from a coalition of IBP executives and investment bankers from the Wall Street firm of Donaldson, Lufkin & Jenrette. That offer, valued at $3.8 billion ($2.4 billion in cash and stock plus $1.4 billion in refinancing of IBP debt), was soon topped by an offer of $4.1 billion from the Virginia-based Smithfield Foods, the country's largest pork producer.
Tyson Foods was the last prospective buyer to join the bidding for IBP; on December 4, 2000, it brought to the table what was then the most attractive offer, valued at a total of $4.2 billion, including $2.8 billion (or $26 a share) in cash and stock and $1.4 billion in assumed debt. Not surprisingly, Tyson's entry into the fray set off not only a war of words but an all-out bidding war between the two leading contenders. Smithfield Foods publicly characterized Tyson's bid as a hostile tender offer despite the decision of IBP's board to consider it. By the end of December 2000 Tyson had sweetened its bid to a total of $4.3 billion, preemptively topping an anticipated bid increase from Smithfield.
Over the 2000–2001 New Year's holiday, Smithfield increased its offer to $32 in stock for each share of IBP; however, IBP's board opted for the final bid from Tyson at $30 a share in equal parts cash and stock, which was considered more attractive because of the cash. Another factor in IBP's decision was the fear that a merger into Smithfield would be closely scrutinized by federal regulators because of implications for the U.S. pork market. A few days into the new year Smithfield publicly acknowledged that it had been outbid. Tyson Foods' final offer was valued at a total of $4.7 billion.
In early spring the much-anticipated marriage of Tyson and IBP hit a snag that for the next few months threatened to tear the companies apart. On March 30, 2001, John Tyson, alleging that IBP had supplied misleading information, announced that Tyson Foods was terminating its merger agreement and filing suit to collect damages. At the center of the controversy was IBP's announcement days earlier that an internal probe of its DFG Foods subsidiary had uncovered mismanagement, possible manipulation of financial records, and product theft. In response to Tyson's announcement IBP declared that it was filing its own lawsuit in a Delaware chancery court to force Tyson Foods to complete the acquisition.
In the end IBP prevailed. In mid-June 2001 a Delaware judge handed down an order requiring Tyson Foods to follow through with its acquisition of IBP; Tyson Foods quickly made clear its intentions to obey the judge's order. During the trial in Delaware both John Tyson and Bob Peterson, IBP's chairman and CEO, testified that the combination of the two companies still made strategic sense. After the court proceedings, according to a report by Victor Epstein in the Omaha World-Herald , Tyson said, "Despite the trial, we believe the management teams of IBP and Tyson can work together" (June 19, 2001).
For Tyson one of the first orders of business after the finalization of the IBP acquisition in the fall of 2001 was the streamlining and rationalization of the newly combined company. By early 2003 John Tyson seemed satisfied that most areas of redundancy had been—or were scheduled to be—eliminated. At the company's annual shareholders meeting in February 2003 Tyson reported that $50 million in savings had been achieved during 2002 with another $100 million in savings expected to be realized before the end of 2003. He told shareholders that the company's focus for the short term would be on paying down its debt, which had jumped sharply in the wake of the IBP acquisition.
Twice in the early 2000s Tyson Foods came under the close scrutiny of federal regulators. In December 2001 the company and three of its managers were indicted on charges that they had conspired to smuggle illegal immigrants into the United States for work in company plants. The case went to trial in federal court in Chattanooga, Tennessee, in early 2003; the company and the three executives were acquitted of all charges. In March 2004 the company revealed that it was under investigation by the Securities and Exchange Commission over benefits paid to top executives, including John H. Tyson.
Tyson and his wife, Kimberly, lived in northwestern Arkansas with their two children, John Randal and Olivia Laine. Away from the corporate offices Tyson managed to find time to serve on the board of the National Council on Alcoholism and Drug Dependence and was also involved with the Walden Woods Project, formed in 1990 to protect wooded areas surrounding Thoreau's Walden Pond. In 1994 Tyson was named Man of the Year by the Arkansas Poultry Federation. In 2003 under his direction Tyson Foods was named by National Provisioner magazine as its first Poultry Processor of the Year. Also in 2003 Fortune selected Tyson Foods as the most admired company in the food-production industry. According to a report in Arkansas Business , in acknowledging this honor Tyson said, "It's incredibly gratifying to have the hard work of our people recognized by others in the industry" (March 3, 2003).
See also entry on Tyson Foods, Inc. in International Directory of Company Histories .
Edwards, Greg, "South Dakota–Based Meat Processor Rejects Sale to Smithfield, Va., Firm," Richmond Times-Dispatch , January 2, 2001.
Epstein, Victor, "Tyson Foods Calls Off Deal with IBP," Omaha World-Herald , March 30, 2001.
——, "Tyson Foods to Obey Judge's Order to Acquire IBP for $4.7 Billion," Omaha World-Herald , June 19, 2001.
Garrison, Bob, "Leading by Example: Tyson Foods Steps Up Its Commitment to Food Safety Research with a $5.2 Million Laboratory Expansion and Renovation," Refrigerated & Frozen Foods , August 1, 2003.
McIntire, Stephen, "Tyson Foods, Inc. (The Bottom Line)," Des Moines Business Record , January 12, 2004.
Mooty, Kyle, "Third Generation of Tysons to Lead Company," Arkansas Business , April 17, 2000.
——, "Tyson Acquitted on All Charges," Arkansas Business , March 31, 2003.
Shean, Tom, "IBP Meatpacking Company Entertains Buyout Offers," Norfolk Virginian-Pilot , December 12, 2000.
Stein, Nicholas, "Son of a Chicken Man," Fortune , May 13, 2002.
"Tyson Foods 4Q Profits Soar 75 Percent," AP Online, November 10, 2003.
"Tyson Foods Inc. Has Been Named the Most Admired Company in the Food Production Industry by Fortune Magazine," Arkansas Business , March 3, 2003.
Tyson Foods press release, September 25, 1998, http://tysonfoodsinc.com .
Wood, Jeffrey, "Tyson Foods Says M&As Likely Over," Arkansas Business , February 17, 2003.
Yeong, Choy Leng, "SEC Probes Benefits for Tyson Top Execs," Bloomberg News , March 30, 2004.
Young, Barbara, "Challenge, Opportunity, Growth," National Provisioner , January 1, 2003.
——, "The Measure of a Man," National Provisioner , June 1, 2002.
——, "Tyson Foods' Karma," National Provisioner , June 1, 2002.