Tyson Foods, Inc. (TSN) Earnings Call Transcript & Summary

With a clear majority of the votes cast favoring 3 years as the frequency of the nonbinding advisory vote to approve the compensation of the company's named executive officers, I declare the 3 years as the frequency of such nonbinding advisory votes as has been approved. The next item of business is the proposal to approve the amendment and restatement of the Tyson Foods, Inc. 2000 Stock Incentive Plan as set forth in the proxy statement, and once again, will the Secretary read the results?

Mr. Chairman, votes cast favoring this proposal represented a clear majority of the votes cast.

With a clear majority of the votes cast for the proposal, I declare this proposal has been approved. The next item of business is a shareholder proposal regarding compliance with the World Health Organization guidelines on the use of medically important [ antimicrobials ], you know what I'm saying, in food-producing animals. And the chair recognizes a representative of the proponent to read the proposal. Welcome to the microphone.

Thank you. Shareholders ask Tyson to comply with World Health Organization guidelines on use of medically important antimicrobials in food-producing animals throughout its supply chains. While Tyson prohibits antibiotic use in its chicken and market some beef and pork as raised without antibiotics, it doesn't limit how antibiotics may be used in cattle and swine for much of its beef and pork beyond legal compliance. This practice is known to exacerbate antimicrobial resistance or AMR, which the WHO describes as one of the top 10 global public health threats facing humanity. AMR also damages diversified portfolios. When the efficacy and availability of life-saving drugs are compromised, the entire economy suffers. And when the economy suffers, investors lose. By 2050, AMR could cause $100 trillion in [ loss ] global production, thus lowering the economy's intrinsic value. A healthy economy is a far greater value driver for diversified portfolios and the profits of any 1 company within those portfolios. Numerous studies have shown that systematic factors explain 75% to 94% of average portfolio return. Thus, whatever marginal increase in returns Tyson might deliver to shareholders using cost-cutting measures that [ cram ] animals into disease-promoting conditions is dwarfed by the outsized costs. Diversified shareholders absorbed across their portfolios from the economic damage, arising from antibiotics over use that forms a crucial pillar of modern medicine. Tyson's top managers who are paid in equity and have concentrated ownership positions have a conflict of interest with the company's diversified shareholders. Exacerbated by Tyson's dual-class share structure, which gives the Tyson family outsized power, their interests are not aligned with those of Tyson's diversified shareholders who are relying on their 401(k)s and pension funds to prevent them from running out of money before they die. To protect your diversified portfolio value, please vote for Item 6.

Thank you. The Board of Directors' statement with respect to this shareholder proposal is set forth in the proxy statement and speaks for itself. Once again, will the Secretary read the results?

Mr. Chairman, votes cast favoring the shareholder proposal represented a minority of the votes cast. Votes cast against this shareholder proposal represented a clear majority of the votes cast.

With a clear majority of votes cast against this shareholder proposal, I declare that this shareholder proposal has been defeated. As this concludes the business portion of our meeting, there being no further business, I declare the business portion of our 60th Annual Shareholders Meeting adjourned. And now I'm pleased to turn the meeting over to my son, John Randall Tyson as our CFO. And I remember the day my dad turned some things over to me. And then Donnie King will follow John Randall.

Good morning, everyone. Thank you, Mr. Chairman. And let me start by reminding everyone that any of our remarks today that are not historical facts are forward-looking statements and are provided pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. I encourage you to visit ir.tyson.com for our most recent Forms 10-K and 10-Q to review discussions of the risks that can affect our business. Since we just reviewed fiscal '22 results in November and discussed Q1 of 2023 earlier this week, I'll focus my remarks this morning on providing some perspective on what shareholders can expect from Tyson in longer term. For the 5-year period from fiscal 2017 through 2022, we increased operating income at a 9% compound annual growth rate and expanded earnings per share at a 13.7% rate on a U.S. GAAP reporting basis. We're proud of this strong performance and thankful to the team members that made it possible. Despite a more challenging outlook for earnings in 2023, we remain focused on driving volume and sales growth, positioning us for long-term earnings growth, cash generation and value creation for shareholders. Our priorities for allocating capital remain to invest for growth and returns in our business and to return cash to shareholders, while also maintaining our investment grade credit rating. In Q1 of 2023, we repurchased 4.9 million shares for $313 million. And in fiscal 2022, we bought back 8.2 million shares for $702 million. We remain committed to our dividend where we paid $653 million in 2022. The 5-year compound annual growth rate for our dividends was more than 15%. In the most recent quarter, we paid $169 million in dividends with our Board of Directors increasing the annual dividend for fiscal 2023 to an expected $1.92 for Class A shares in November. We've been paying a dividend since 1977 and we've increased it each year since fiscal 2013. In fact, since -- since 1998, excuse me, we paid nearly $4.5 billion in total dividends to shareholders. Now before I wrap up, I must acknowledge how extremely thankful and humbled I am to be a part of the team continuing the good work that my great grandfather started back in 1935, which was furthered by my grandad and continues with my dad today. It's both, a responsibility and a privilege, to be here representing the accomplishments of our team members as well as the interest of our shareholders alongside my family members. My dad, you just heard from, my sister, my great aunt and my aunt, who are with us in the front row today and my mom is also up here. We're doing great things here at Tyson, and I'm excited about our future. So with that, I'd like to introduce the person leading us into that future, Mr. Donnie King. Donnie?

Well, good morning, everyone. I agree with John Randall. I'm excited about both, the short and the long-term prospects for Tyson Foods. As a leader in the global protein market, we are uniquely positioned to win given our diversified business model. We have great brands, a brand portfolio of products and the ability to serve the needs of customers and consumers wherever they live and work. We expect to further strengthen our position in the global protein by focusing on our priorities of winning with team members, winning with customers and consumers and winning with excellence in execution. We continue our focus on making Tyson Foods, the most sought after place to work by investing in the health, safety and well-being of our team members. We increased wages and bonuses over the last 2 years by more than $500 million, including providing hourly team members of approximately $50 million in year-end bonuses in 2022. We've also enhanced our benefits, including health care eligibility on day 1, increased parental leave and expanded mental health benefits, all at no cost to our team members. We are winning with customers and consumers, demonstrated by a 5-year record high in market share across Tyson core business lines. It is evident that we're delivering the brands and products that consumers want to buy. We continue to improve our excellence in execution with changes in leadership, disciplined revenue management and bringing our corporate U.S. team members together. We are already seeing the benefits of these efforts. For example, our productivity program will deliver $1 billion or more of savings a year ahead of plan. These are just some of the reasons that Tyson Foods was first -- was ranked #1 in FORTUNE Magazine's list of the World's Most Admired Companies in the food production category for the seventh year in a row. Our goal is to continue to drive shareholder value by outpacing a growing global protein market. We believe that we have the right strategy and priorities in place to do just that. I want to thank you for your continued interest, investment and confidence in what we're doing at Tyson. And with that, I'll turn it back to the Chairman, and I'll turn the meeting to you.

Thank you, John Randall and Donnie. I'd like to thank our team members, our shareholders, Board of Directors, our hometown community of Springdale for attending the meeting today. I too want to say thank you to my family that's here today. My daughter, Olivia; my son, John Randall; Aunt, Barbara; my sister, Cheryl; and the mother of my 2 children, Kimberly. Tyson is a great company. We've got a great team. and we have a lot to be excited about. I want to clap out to all of our Tyson team members through here [ who have made a difference ]. Thank you for your time and your interest in Tyson Foods. I declare the 60th Annual Shareholders Meeting adjourned. Thanks, everybody. Travel safe.

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.