By: Cydney Posner
Yesterday the NYT reported that the SEC plans to seek a civil enforcement action and possible monetary penalties against Tyson Foods with respect to perquisites the company awarded to certain executives. In addition, the SEC may recommend administrative cease-and-desist actions against two Tyson non-executive employees for the alleged noncompliance.
The SEC staff alleges that
- company proxy statements for fiscal 1997 through 2003 did not fully describe or disclose about $1.7 million in perks awarded to the former senior chairman Don Tyson and
- the company failed to maintain adequate internal controls on the personal use of company assets and the disclosure of perks and personal benefits.
Tyson's former senior chairman has repaid the company $1.52 million. In the spring, the company noted in its proxy statement that Tyson regularly engages in transactions with company officials and board members, identifying millions of dollars in transactions between the company and Tyson officials. Included are farm operations, an aircraft lease agreement with Tyson family members and a $5.35 million wastewater treatment agreement with an entity in which Don Tyson is a principal.