CEO Profile: Donnie Smith of Tyson Foods Inc.

by Jan Cottingham  on Monday, Mar. 26, 2012 12:00 am  

"Second, let's examine both meat and poultry market conditions. According to the Perishables Group data, while dollar sales of fresh meat at retail outlets were up 3 percent versus last year, volume was down a little more than 5 percent, led by beef and pork, down 8 percent and 7 percent, respectively, while chicken pounds were about flat. Our view is that this trend will continue. Bacon and lunch meat sales were stronger in the first quarter versus last year, again, driven by price improvements."

"Demand for exports in poultry, as well as beef and pork remains strong," he added. "Although leg quarters are still the primary driver of these sales, we have seen increased demand for whole birds. Additionally, we do sell breast meat on the export market from our Brazil operations. We've done a nice job of expanding our export market base and we see this trend continuing as the emerging economies have an increasing demand for protein. We sell our products where we get the best net price. Five years ago the industry sold 50 percent of its exports to the top 3 export markets. Today the industry sells 29 percent to the top 3 export markets."

As for the biggest challenges facing Tyson Foods during the next year or two, Smith replied:

"Managing rising input costs will likely continue to be among our primary concerns. The cost of livestock and poultry feed has risen to record levels. Corn is the primary component of chicken feed and accounts for 55 percent of the wholesale cost of whole, ready-to-cook chickens. In our poultry business, we're working to offset the increased feed costs with pricing and product mix improvements as well as operational efficiencies expected to result in additional savings of $125 million in fiscal 2012."

Tyson's proxy statement, filed Dec. 22, shows that Smith holds 617,251 of Tyson shares, worth $12,258,604 million as of Tyson's $19.86 closing price March 16.

As Tyson Foods' performance has improved so has Smith's total compensation. In 2009, it was $1,176,133; in 2010, $8,862,433; and in 2011, $7,704,561. A sizable part of 2010's $8,862,433 consisted of $1,478,641 in stock awards, according to the proxy. Smith received no stock awards in 2011, the proxy indicated.

Smith, asked by Arkansas Business what he knows now as CEO that he didn't know before he took the post, said:

"The experience as CEO has reinforced my belief about the importance of a company's culture and prompted me to drive cultural change within our company. This has involved such things as encouraging our people to really know their business and deliver results; to manage cost and expenses like they were their own; and to win and have fun as a team."



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