By Tom Polansek
CHICAGO (Reuters) -Tyson Foods sought to reassure investors that it has succession plans in place on Thursday, after announcing this week that an executive seen by some analysts as a possible future CEO left the company over conduct violations.
The meatpacker said late on Tuesday that Chief Supply Chain Officer Brady Stewart, who has also overseen its beef, pork and prepared foods businesses, ran afoul of its code of conduct. Tyson representatives have not responded to questions about the violations.
The company appointed Devin Cole, who led its poultry and international businesses, as chief operating officer and said he will oversee those units plus beef, pork and prepared foods.
Shares fell to a one-month low on Wednesday as the management change caught investors and analysts by surprise. Some had considered Stewart, a former COO for Smithfield Foods, as a candidate to eventually succeed Tyson CEO Donnie King.
“We have a very robust succession mechanism in place at our company,” Cole said on a webcast of the Barclays Global Consumer Staples Conference.
When asked about his expanded role, Cole said he had been around the beef, pork and prepared foods businesses during his time at Tyson, and did not expect major changes.
“This is thankfully not just a complete surprise to me or others,” he said.
Tyson has grappled with cautious consumer spending and its beef business has been losing money as low U.S. cattle supplies have forced meatpackers to pay more to buy livestock to slaughter. But the company raised its annual revenue forecast last month as quarterly profit margins improved in its chicken, pork and prepared foods units.
“Brady had done a good job improving Tyson’s relative performance in beef, pork and prepared foods, and I’d thought he was the heir apparent,” said Heather Jones, founder of Heather Jones Research, which focuses on agriculture and meat companies.
“His departure was a shock.”
(Reporting by Tom PolansekEditing by Marguerita Choy)
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