Dive Brief:

• Springdale, Ark.-based Tyson Foods’ board of directors is overseeing a review of the arrest of company CFO John R. Tyson on Nov. 6 in Fayetteville, Ark. on charges of public intoxication and criminal trespassing, CEO Donnie King said on a Monday earnings call.  
• Tyson apologized to investors on the call, saying the incident was “inconsistent with our company values and my personal values,” and echoing a company-wide statement he sent out immediately after the incident last week.
• King also expressed support for the company’s handling of the incident. “Like John, the company takes this matter seriously,” King said. “Tyson Foods has a strong, robust corporate governance process. Our independent board of directors are overseeing a thorough review of this matter, and I'm confident in this independent process.”

Dive Insight:

The arrest of Tyson, son of company chairman John H. Tyson and great grandson of the company’s founder, came just over a month after he took the CFO seat on Oct. 2.

Tyson Foods' governance and nominating committee is leading the review process, a company spokesperson confirmed to CFO Dive. The group is comprised of members independent to the family.

Tyson Foods declined to comment further on its process for handling the arrest of the CFO beyond the comments of King and Tyson during the fourth quarter earnings call. But Tyson, 32, referred to the incident during the call.

“I’m sure you have seen the news about the recent incident involving me,” Tyson said on the call. “I’m embarrassed and I want to let you know that I take full responsibility for my actions. I also want to apologize to our investors, as I have to our employees.”

Tyson was arrested after a woman found an “unknown and unwelcome male” sleeping in her bed, according to the police report from the Fayetteville, Ark. Police Department. Officers identified Tyson after finding his ID in his clothes on the floor near the bed, with arresting officers noting the smell of “intoxicants” on his person and that Tyson appeared “disoriented and displayed slow and sluggish movements,” according to the report.

Tyson is expected to appear in court regarding the charges on Dec. 1.  

Tyson Foods is one of the largest poultry, pork and beef processors in the country with a market cap of $24.14 billion, according to Yahoo Finance. Tyson’s appointment as CFO raised immediate questions surrounding a potential conflict of interest given his family ties to the company, with experts also pointing to the new financial head’s lack of experience, CFO Dive previously reported.

After the finance chief’s arrest, a company spokesperson referred to the incident as a “personal matter.” That drew more criticism from some corporate governance experts who said the company should have taken more aggressive and quicker action to address the arrest of its newly-minted CFO.

On the earnings call, Robert Moskow, senior equity analyst with Credit Suisse, said that followers of the company were used to the firm “putting people in the CFO role who have 20-plus years of experience in the finance track and this latest reshuffling did the opposite.” He asked King to speak to how the business was responding “culturally” to the appointment of Tyson and other recent executive leadership shuffles.

King said he was “pleased” by the company’s decision regarding Tyson’s CFO appointment, as well as to move the firm’s previous CFO Stewart Glendinning to the role of group president of the company’s prepared food division and its appointment of Amy Tu to president, international and chief administrative officer.

“I’m perfectly comfortable with the people we put in place,” King said. Earlier in the call, King also spoke in defense of Tyson’s prior experience, noting he had “escalating levels of responsibility” in banking and venture capitalism before joining Tyson.

“You may not know that within Tyson for the last four years, he's led the M&A strategy, ventures and other areas of the company,” King said on the fourth quarter earnings call. “But don't forget about the fact that he's been involved in this business essentially his whole life. So, a lot of experience there.”

Tyson Foods reported profits of $538 million for the three month period ending Oct. 1, compared to the $1.4 billion it reported for Q4 2021, according to the company’s earnings results.  

It also reported record annual sales for the full fiscal year as consumer demand for protein remained strong despite inflation and other macroeconomic stressors, King said. Sales rose 7% in the fourth quarter and 13% year-over-year, according to the company’s earnings results, with Tyson reporting $53.3 billion in full-year sales for 2022 compared to the $47 billion it garnered annually in 2021.

Tyson was responsible for approximately one-fifth of U.S. protein consumption, King said during the fourth quarter earnings call. For fiscal 2023, the company is expecting sales between $55 billion and $57 billion, to be driven by its chicken, prepared foods and international business segments.