Tyson CEO Hayes to step down; White to take reins

Noel White, a longtime executive at Tyson Foods with expertise in commercial beef and pork operations, will take the helm of the nation’s largest food company, effective Sept. 30.

In a move that surprised analysts and company employees Monday morning, Tyson announced that Tom Hayes, formerly of Hillshire Brands, was stepping down from his role as the company’s president and chief executive officer for “personal reasons.”

During his tenure, Hayes,

53, helped rebrand Tyson as more than a traditional meatpacker.

He also oversaw the merger with Hillshire Brands and guided Tyson’s venture into alternative meats.

“It is a very difficult decision to leave Tyson Foods, but after careful consideration and discussions with my family and the board, I know it is the right thing to do,” Hayes said in a prepared remark.

White, the current group president of beef, pork and international commerce, also will join the board of directors in his new role.

In a news release, John Tyson, company heir and board chairman, thanked Hayes for his leadership and contributions to Tyson Foods the past two years. He also made a case for White’s leadership of the company.

“Noel is a proven leader who has played an integral role in our enterprise leadership team for many years,” Tyson said. “His deep institutional knowledge and a stellar track record over his more than 30-year career at Tyson Foods and [IBP Inc.] give the board the utmost confidence in his ability to drive the business forward, accelerate global growth and create long-term value for shareholders.”

A longtime Tyson Foods insider, White, 60, joined the company through the 2001 acquisition of IBP Inc., which now makes up Tyson’s beef and pork businesses. Before his most recent position as chief operations officer, he held various sales and management positions related to commercial beef and pork, and oversaw Tyson’s poultry operations as group president from 2013 to 2017.

“I am honored to serve as Tyson’s next CEO, and I am

excited by the many opportunities that lie ahead,” White said in a prepared remark. “It has been a privilege to contribute to this company’s evolution over the course of many years and to be a part of its becoming one of the world’s largest food companies.”

Tyson shares slid on the news of White’s appointment, falling less than 1 percent, or 34 cents, to close Monday at $63.06. Company shares have dropped more than 20 percent year-to-date.

Shareholders, packaged-foods analysts and people familiar with the matter seemed surprised at Hayes’ departure.

“I had no inclination of this happening,” Ken Shea, senior food and beverage analyst of Bloomberg Intelligence. “It was surprising to me because Hayes was regarded as a pretty effective CEO.”

Hayes, of New Hampshire, has led the company since late 2016, after Hillshire Brands was acquired by Tyson two years earlier. In the chief executive role, he helped integrate the brands of Jimmy Dean, Hillshire Farms, Sara Lee and Ball Park into the Springdale company founded more than 80 years ago by John W. Tyson, who made it feasible to export chickens outside of Arkansas.

Alan Ellstrand, associate dean of the Walton College of Business at the University of Arkansas, Fayetteville, said Hayes’ two years as CEO “strikes me as fairly short.” Ellstrand, who teaches classes in corporate governance and leadership strategies, estimated the average tenure of a chief executive officer is between four to six or five to seven years.

“This is totally speculation, but the idea may have been for him to come in and ease the transition on the Hillshire acquisition,” Ellstrand said. “It seems to me the Hillshire acquisition was not only about bringing new products in that you can add higher margins to, but acquiring human capital as well.”

In one year, Hayes restructured his leadership team twice, hiring new executives with backgrounds at Hillshire, and created new roles at Tyson, such as chief sustainability officer. Amid the shake-ups, White managed to stay on board.

It would be “fairly common to have an interim” CEO after an unexpected change in leadership, Ellstrand said. “But this suggests to me that some planning went into this.

“I think going inside signals that they are not looking to have a big shake-up,” he said about White’s new role. “It usually signals stability and continuity rather than clean the slate and start something new.”

With White’s appointment, the nation’s largest meat company also reaffirmed its fiscal 2018 adjusted earnings guidance of between $5.70 and $6 per share, unchanged from Tyson’s adjustment made July 30 in response to escalating trade and market volatility.

“I suspect there’s no second shoe to drop, or some unexpected new challenge,” Shea said regarding Tyson’s earnings affirmation. “I assume it’s in good hands, the market is certainly interpreting it that way, but it’s hard to read.”

In a research brief, Stephens Inc. analyst Farha Aslam predicted Tyson shares will drop in price in response to the “somewhat unexpected” news, but urged investors to view its as a buying opportunity.

“The company plans to pursue the same strategy of a focus on all protein markets, spanning beef, chicken and pork,” Aslam wrote. “White is a well respected leader with significant operating experience.”

Originally of Iowa, White graduated from Bemidji State University in Minnesota and received a Master of Business Administration from Oklahoma City University. He currently resides in north Fayetteville near Johnson.

White