Tyson Foods Inc. is on notice with the Securities and Exchange Commission for allegedly failing to disclose perks it handed out to some of its executives.
The SEC staff is recommending that the commission bring a civil law suit against the meat-producing giant, and possibly seek monetary damages.
The notice charges that Tyson’s proxy statements for the fiscal years 1997 through 2003 did not fully describe or disclose $1.7 million in perks awarded to Don Tyson, a former senior director. The SEC staff also charged that the company failed to maintain adequate internal controls on the personal use of company assets and the disclosure of perquisites and personal benefits.
Tyson disclosed in a December 2003 proxy statement that it regularly engages in business transactions with company officials and board members, including ones involving farm operations, an aircraft-lease agreement with Tyson family members, and a $5.35 million wastewater treatment agreement with a company in which Don Tyson is a principal.
On March 29, the SEC told Tyson Foods that the company was under investigation. Since then, independent board members conducted a review of the charges and Don Tyson has voluntarily paid $1.5 million to the company for items identified in the review that were pertinent to the years in question.
Tyson officials commented that that the company is currently unable to predict the outcome of the investigation. But they stated that they don’t believe the “amounts at issue are material to the company’s financial position or operating results.”
The SEC may also recommend bringing a civil suit against Don Tyson, and administrative cease-and-desist actions against two of the company’s non-executive employees for their part in the alleged disclosure failures.
A spokesman said that since March, company officials have cooperated with the investigation and will continue to do so.