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THE TYSON LESSON: PAY AS YOU PILLAGE

April 29, 2005

From the front page of today's Wall Street Journal:

During his four years as senior chairman of Tyson Foods Inc., the perks Don Tyson received were striking even in an era of lavish executive compensation.

They included $464,132 for personal use by him and his family and friends of company-owned homes in the English countryside and Cabo San Lucas, Mexico, $20,000 for oriental rugs, $18,000 of antiques, $84,000 in lawn maintenance at five homes where he and his family and friends lived, an $8,000 horse, and other jewelry, artwork, vacations and theater tickets. The company also paid Mr. Tyson $1.1 million to cover his personal income-tax liability associated with all these benefits.

Yesterday, the Securities and Exchange Commission said those perks were among $3 million in benefits the Springdale, Ark., company paid Mr. Tyson between 1997 and 2001. As part of a broad crackdown on hidden executive compensation, the SEC said that Tyson Foods failed to disclose over $1 million in perks and made misleading or inadequate disclosures about other benefits.

(Emphasis added)

It's striking that Mr. Tyson avoided the Leona Helmsley misstep by paying his taxes on his perks. There's a shrewd man under those overalls.

The article says Mr. Tyson will return $1.5 million to the company. It's not clear whether Mr. Tyson will get a deduction for this. There's a good writeup this week on Tax Analysts (via the TaxProf) on this topic. But not to worry - based on past practice, the company will take care of Mr. Tyson.

Link to article (for WSJ online subscribers only): In SEC Complaint, Tale of Chicken Mogul Feathering His Nest

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