Because Tyson Foods Inc. failed to achieve earnings targets in its most recently completed fiscal year, senior executives will miss out on bonuses that totaled more than $5 million last year, the company said Tuesday.
In a filing with the Securities and Exchange Commission, the world’s largest meat producer said Chairman John Tyson, President Richard Bond and Chief Administrative Officer Greg Lee were ineligible for bonuses for 2006.
“Linking executive compensation to corporate performance results in a better alignment of compensation with corporate goals and shareholder interest,” the company’s compensation committee said in a proxy statement. “As performance goals are met or exceeded, resulting in increased value to shareholders, executives are rewarded commensurately.”
The panel calculated that Tyson should have had adjusted earnings before interest and taxes of $15.7 million, excluding extraordinary items, in the fiscal year ended Sept. 30.
“All team members work towards the achievement of a common corporate goal. No bonuses are paid unless the company achieves a threshold Adjusted EBIT amount,” the compensation committee said.
Tyson lost $196 million in fiscal 2006 — off from a net income of $372 million in fiscal 2005.
Last year, John Tyson earned a $3.25 million bonus on top of a $1.14 million salary plus other compensation in 2005; Bond earned a $1.38 million bonus above his $1.11 million salary and other compensation last year; and Lee was given a bonus of $600,000 over his $757,000 salary.
For 2006, Tyson will receive $1.17 million in salary, Bond $1.14 million and Lee $779,000. The company announced last week that Bond’s salary in 2007 would be $1.2 million.