At its annual meeting on Thursday, Tyson Foods shareholders rejected three proposals that would have increased investor oversight of the company’s operations. Tyson also reported lower-than-expected sales in the first quarter as well as ongoing pandemic-related worker absenteeism and turnover.
The shareholder proposals were brought by religious investor groups, a labor union, and the New York State retirement fund. The company did not disclose how many investors voted for each proposal. The Tyson family controls about 70 percent of the company’s voting rights because of its dual-class stock structure — which one proposal advocated reforming into a single class structure. The other two proposals sought greater human rights due diligence and more transparency for investors about the company’s political and lobbying activity.
During the meeting, representatives spoke in support of each proposal. All of the speakers emphasized the importance of greater company oversight in the wake of the pandemic, during which more than 12,000 Tyson workers have contracted Covid-19 and at least 39 have died, according to FERN’s tracker.
“One would think that Tyson would provide workers who Tyson once called ‘heroes’ with meaningful benefits and protections,” said Magaly Licolli of Venceremos, a poultry worker advocacy group that has pushed the company to provide more hazard and sick pay for plant workers, while speaking in support of the human rights proposal. “However, Tyson has put profits before protecting workers’ lives.”
Speaking about the need to reform the stock class structure, George Wong of the New York State Common Retirement Fund said that the unequal power between family and non-family investors has “insulated our company from having to answer for its failure to quickly address the impacts of the Covid-19 crisis. A failure to take all necessary actions to prioritize the well-being of employees, to act responsibly to employee concerns, and to build trust in the company’s actions has not only led to Covid-19 outbreaks and closures of Tyson plants, but resulted in economic harm to our company,” he said.
The pandemic has also highlighted the need for Tyson to adopt “sustainable good governance” practices by disclosing its state and federal spending on political and lobbying activity, said Louis Malizia, assistant director of capital strategies at the International Brotherhood of Teamsters. “Our company lags behind peer group companies, such as Kraft Heinz, PepsiCo, and Mondelez, who disclose this information and make it easily accessible,” Malizia said. “We are concerned that Tyson’s lack of lobbying and trade association disclosure presents reputational risk.”
In its proxy statement, Tyson advised investors to vote against all three proposals.
In a call with analysts, the company reported a 4.4 percent decline in sales volumes compared to the same quarter last year, in part due to lower demand from restaurants and other food service operations during the pandemic. Tyson plants are also still struggling with ongoing worker absenteeism and high employee turnover rates.