Good morning,
Being new on the job as a CFO means you’re in the spotlight, and it’s time to make a good impression. But Tyson Foods Inc. CFO John R. Tyson, the son of the chairman of the company’s board of directors, is facing serious allegations a month into his appointment.
Tyson, 32, was arrested this past weekend for public intoxication and criminal trespassing, according to reports. Detainee information released by the Washington County, Ark., sheriff’s department states he was arrested in the early morning of Nov. 6 and released later that day. A woman in Fayetteville, Ark. called the police when she found Tyson, whom she said she doesn’t know, in a bed in her home, according to local reports by KNWA Fox24. Police said they tried to wake Tyson up at the scene, but he was incoherent, briefly waking up and going back to sleep.
A company spokesperson told KNWA in a statement: “This is a personal matter, we have no additional comment.” I reached out to Tyson Foods but didn’t receive a response as of press time.
Tyson was named EVP and CFO of the Arkansas-based meat company, effective Oct. 2. He is the son of board chairman John H. Tyson and the great-grandson of Tyson founder John W. Tyson. John R. Tyson previously served as the company’s EVP of strategy and as chief sustainability officer. Before joining Tyson Foods in 2019, he held various roles in investment banking, private equity, and venture capital, including at J.P. Morgan. Tyson succeeded Stewart Glendinning, who transitioned from his role as EVP and CFO to take on the position of group president of prepared foods.
The company is scheduled to release its latest 2022 quarterly financial results on Nov. 14. That’s the first time Tyson would participate in an earnings call as CFO. “We delivered solid operating income of nearly $1 billion because of our diversified portfolio; year to date, we are up 15% over prior year,” Tyson Foods CEO Donnie King said in August on the earnings call for the period ending June 30. “Overall, earnings per share came in at $1.94 for the third quarter and $7.10 year to date.”
Tyson Foods may be a family-founded company, but it’s also a public company.
“This will be a critical moment for Tyson Foods and corporate governance,” Shane Goodwin, associate dean for Executive Education and Graduate Programs at the Cox School of Business at Southern Methodist University, told me. Tyson Foods has a dual-class share structure, which means the family of the founders have tremendous influence over the company, says Goodwin who teaches an MBA corporate ethics course. The Tyson family owns 99.9% of its Class B shares, giving them the ability to outvote the Class A shareholders 10-1, and shareholders know the family has the power, he says.
However, being a public company, Tyson Foods has “many stakeholders to consider not only shareholders, but customers, employees, and the community,” Goodwin says.
As CFO, Tyson receives “an increased base salary of $650,000 and an increase in his target annual incentive payment under the Company’s Annual Incentive Compensation Plan for senior executives from 90% to 110% of his annual base salary, with the actual annual incentive payment payable based on performance,” according to the company’s form 8-K filed on Sept. 27.
Goodwin says companies should always emphasize ethics for executives, both on and off the clock. “There is no exception to this,” he says. “I know many want their private life to be ‘off limits.’ And it is—unless one is violating laws, rules, ethical judgments, etc. Admittedly, situations are different. The alleged circumstances around this situation are very serious.”
I asked Goodwin what approach Tyson’s CEO and the board should take when it comes to this alleged incident. “Everyone is innocent until proven guilty—that is a bedrock of our country,” he says. “So, I would ensure the process plays out properly. I would follow any policy that we already have in place. Do not change that policy.” For example, if the company allows employees to continue working until a legal matter is fully adjudicated, it should continue doing that, he says.
“However, if they have a history of suspending or dismissing employees then they have to follow that precedent,” Goodwin says. “Personally, in my honest opinion, if I were [the chairman] in this situation, I would immediately suspend my son. This lapse of judgment cannot be tolerated for such a serious job.” But Goodwin added, “I also believe we live in a world of second chances and we need to support those going through challenging times.”
One thing’s for sure, the family’s support for Tyson will be watched publicly.
See you tomorrow.
Sheryl Estrada
sheryl.estrada@fortune.com
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This story was originally featured on Fortune.com
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