John Tyson gets new Tyson Foods (TSN) contract including $40M bonus
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Tyson Foods, Inc. entered into a Third Amended and Restated Employment Agreement with Chairman John H. Tyson, replacing his 2017 contract and committing to an initial term through September 30, 2029, with automatic three-year renewals unless terminated.
The agreement sets an annual base salary of $3,500,000, an annual incentive target equal to 300% of base salary, and a long-term incentive target of $6,000,000 split evenly between performance stock units and restricted stock units. Mr. Tyson will also receive a one-time cash incentive of $40,000,000, subject to partial repayment if he resigns without Good Reason or is terminated for Cause before September 30, 2029.
Benefits include required use of company aircraft (with tax gross-ups for approved personal use), 300 hours annually of aircraft use for flights without him as a passenger, personal security services plus up to $150,000 annually for additional security, ongoing life insurance premium reimbursement, and a Supplemental Executive Retirement Plan benefit of about $175,000 per year. On certain terminations without Cause or for Good Reason, Mr. Tyson is entitled to significant lump-sum severance, accelerated vesting of equity awards and options (with cash redemption eligibility), and lifetime medical coverage, alongside non-competition and non-solicitation restrictions extending in some cases to September 30, 2031.
Positive
- None.
Negative
- None.
8-K Event Classification
2 items: 5.02, 9.01
2 items
Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers
Governance
Key personnel changes including departures, elections, or appointments of directors and executive officers.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Annual base salary: $3,500,000 per year
Annual incentive target: 300% of base salary
Long-term incentive target: $6,000,000 annually
+5 more
8 metrics
Annual base salary
$3,500,000 per year
Chairman John H. Tyson compensation under new agreement
Annual incentive target
300% of base salary
Target under Tyson’s annual incentive programs
Long-term incentive target
$6,000,000 annually
Grant date target value, 50% PSUs and 50% RSUs
One-time cash incentive
$40,000,000
Subject to pro-rata repayment if he leaves before Sept. 30, 2029 in certain cases
Additional security services cap
$150,000 per year
Maximum annual amount for extra security services at his request
SERP benefit
$175,000 per year (approx.)
Supplemental Executive Retirement Plan payment continued by company
Aircraft use hours
300 hours annually
Use of company aircraft for flights where he is not a passenger
Non-compete period end
September 30, 2031 or later
Non-competition restriction lasts to later of 24 months post-termination and this date
Key Terms
performance stock units, restricted stock units, Change in Control, Supplemental Executive Retirement Plan, +2 more
6 terms
performance stock units financial
"with an annual target grant date target value of $6,000,000, with 50% of such award as performance stock units"
Performance stock units are a type of company award that grants employees shares of stock only if certain performance goals are met. They motivate employees to work toward specific company achievements, aligning their interests with those of shareholders. For investors, they can influence a company's future stock supply and reflect management’s confidence in reaching key targets.
restricted stock units financial
"with 50% of such award as performance stock units and 50% as restricted stock units."
Restricted stock units are a type of company reward where employees are promised shares of stock, but they only fully own these shares after meeting certain conditions, like staying with the company for a set time. They matter because they can become valuable assets and are often used to motivate employees to help the company succeed.
Change in Control financial
"Upon the occurrence of a Change in Control (as defined in the Employment Agreement), all previously granted restricted stock units and performance stock"
A "change in control" occurs when the ownership or management of a company shifts significantly, such as through a merger, acquisition, or sale of a large part of its assets. This change can impact how the company is run and may influence its future direction. For investors, it matters because it can affect the company's stability, strategy, and value, often signaling potential changes in investment risk or opportunity.
Supplemental Executive Retirement Plan financial
"continued payment of a Supplemental Executive Retirement Plan benefit of approximately $175,000 a year."
non-competition restriction financial
"The Employment Agreement also contains a non-competition restriction for a period ending on the later of"
non-solicitation restriction financial
"a 24-month post-termination non-solicitation restriction, and customary confidentiality obligations."
FAQ
What new employment agreement did Tyson Foods (TSN) approve for John H. Tyson?
Tyson Foods approved a Third Amended and Restated Employment Agreement for Chairman John H. Tyson. It replaces his 2017 contract, runs initially through September 30, 2029, and automatically renews for three-year terms unless either party terminates it under the agreement’s conditions.
How is John H. Tyson compensated under the new Tyson Foods (TSN) agreement?
John H. Tyson receives a $3,500,000 annual base salary plus an annual incentive target equal to 300% of base salary. He also has a long-term incentive target of $6,000,000 per year, split 50% performance stock units and 50% restricted stock units, subject to performance objectives.
What one-time cash incentive does John H. Tyson receive from Tyson Foods (TSN)?
John H. Tyson will receive a one-time cash incentive payment of $40,000,000. A portion must be repaid on a pro-rata basis if he resigns without Good Reason or is terminated for Cause before September 30, 2029, as defined in the employment agreement.
What travel and security benefits are provided to John H. Tyson by Tyson Foods (TSN)?
John H. Tyson must use company-owned aircraft for all personal and business travel, with tax gross-ups for approved personal use. He also receives 300 hours annually of aircraft use when not a passenger, company-provided personal security services, and may request additional security services up to $150,000 per year.
What severance protections does John H. Tyson have in his Tyson Foods (TSN) contract?
If Tyson Foods terminates without Cause or he resigns with Good Reason, John H. Tyson can receive a lump-sum cash payment based on salary and incentive targets, vesting of certain equity awards and options with cash redemption eligibility, and continued medical coverage for life, subject to a release of claims.
What restrictive covenants apply to John H. Tyson under the Tyson Foods (TSN) agreement?
John H. Tyson is subject to a non-competition restriction lasting until the later of 24 months after termination and September 30, 2031. The agreement also includes a 24-month post-termination non-solicitation restriction and customary confidentiality obligations protecting Tyson Foods’ business interests.