The company didn't disclose perks for its ex-chairman, the government says.
WASHINGTON -- Tyson Foods Inc. agreed Thursday to pay a $1.5 million civil fine to settle federal regulators' charges that it failed to fully disclose lavish perks provided to former chairman Don Tyson, including $38,000 in oriental rugs and antiques, and the use of houses in England and Mexico.
Don Tyson will pay an additional $700,000 civil fine to settle charges by the Securities and Exchange Commission that he caused and aided the company's violations of disclosure rules for benefits that Tyson, friends and family members received while he was chairman and after his retirement in October 2001.
Tyson is still a consultant to the company and sits on its board.
Neither Springdale, Ark.-based Tyson Foods, the world's largest producer of chicken, beef and pork, nor Tyson himself admitted or denied wrongdoing under the settlement. They did agree to refrain from future violations of federal securities laws.
"Shareholders have a right to complete and accurate disclosures that provide a full appreciation of how public companies are using corporate assets for the personal benefit of their top executives," Paul Berger, an SEC associate director of enforcement, said in a statement.
John Tyson, who is the son of Don Tyson and is now the company's chairman and CEO, said the "company has cooperated fully with the SEC in an effort to resolve this matter and (we) are pleased to be moving forward. We've also put additional controls and procedures in place to help ensure executive perquisites are being properly tracked and disclosed in the future."
During Don Tyson's tenure from 1997 to 2001, the SEC said, the company provided perks and personal benefits worth about $3 million to him, his wife and daughters and three friends. Many of them were not approved by the board of directors' compensation committee, the agency said.
It said they included:
$689,016 in personal expenses for Tyson and two friends, including $20,000 in purchases of oriental rugs and $18,000 of antiques, a $15,000 vacation in London, an $8,000 horse and other purchases of clothing, jewelry, artwork, vacations and theater tickets, paid with cash advances from the company's accounts, directly billed to the company or charged to company credit cards issued Tyson and the two friends.
$464,132 in personal use by Tyson and his family and friends of company-owned houses in the English countryside and in Cabo San Lucas, Mexico, including use of the company-paid chauffeur, cook and housekeeper at the house in England and the company's boat with crew in Cabo San Lucas.
$426,086 in personal use of company-owned aircraft by Tyson and his family and friends.
$203,675 in housekeeping services provided at five different homes where Tyson and his family and friends lived or vacationed.
$84,000 in lawn maintenance at the five homes.
In December, the company offered in settlement negotiations with the SEC to pay a $1.5 million fine, while Don Tyson offered to pay $200,000.
The company said last summer that the board had reviewed the SEC's allegations and that Don Tyson voluntarily paid the company more than $1.5 million for items that came under review.
Shares of Tyson rose 20 cents to close at $16.74 Thursday on the New York Stock Exchange, where it has traded between $13.97 and $21.28 over the past 52 weeks.
Securities and Exchange Commission:
Tyson Foods Inc.: