By LILLIANNA BYINGTON
Food Dive
Pilgrim's Pride has permanently replaced
Jayson Penn as CEO and president. Penn, who is currently facing price-fixing
charges, is no longer with the company, according to a company news release
last week.
The Board of Directors appointed Fabio
Sandri as president and CEO, effective immediately. Sandri, who was previously
CFO at Pilgrim's, has been serving in the interim CEO role since Penn took a
paid leave of absence in June.
Four top executives at Pilgrim’s Pride
and Claxton Poultry Farms were indicted in June for conspiracy to fix prices
for chickens sold to grocers and restaurants from 2012 to 2017. Penn pleaded
not guilty to the charges.
Pilgrim's Pride is trying to move past
the price-fixing investigation that has plagued its operations by permanently
replacing the leadership associated with the charges.
A federal grand jury in Colorado
indicted Penn and former Pilgrim’s Vice President Roger Austin three months
ago, along with executives at Claxton. If convicted, those four executives face
a statutory maximum penalty of ten years in prison and up to a $1 million fine.
Shortly after the indictment was
announced, Penn began a paid leave of absence "to focus on his defense."
Austin's LinkedIn currently lists him as retired/consultant.
These indictments were the first charges
in the DOJ's ongoing antitrust investigation into the chicken industry, which
was publicly disclosed last year when the DOJ intervened in a lawsuit filed in
2016 that accused chicken companies - including Pilgrim's, Perdue Farms, Tyson
Foods and Sanderson Farms - of colluding to inflate prices.
After the indictment of Pilgrim’s and
Claxton, Tyson said it was cooperating with the DOJ's price-fixing investigation
under the antitrust division's Corporate Leniency Program.
Pilgrim's choice to promote someone
internally to lead instead of going through an extensive outside search could
help the company pivot away from the scandal faster. Sandri started at Pilgrim's
as CFO in June 2011 and was appointed interim president and CEO on June 15.
Before Pilgrim's, Sandri was the CFO of
Estacio Participações, a private educational institution in Brazil, and former
corporate controller of Braskem S.A., a petrochemical company in Brazil. The
company has started the search process to find a new CFO to replace Sandri.
Penn's tenure at the helm of Pilgrim's
didn't last long. He was appointed CEO last year to succeed Bill Lovette, who
retired after eight years leading the company. Penn originally joined Pilgrim's
in 2011 and has served as senior vice president of the commercial business
group, executive vice president of sales and operations, and president of
Pilgrim's USA during his tenure.
Pilgrim's, which is majority owned by
JBS USA, makes up about 17% of the U.S. chicken market and produces about 13
billion pounds of poultry each year. For years, the chicken industry has faced
price-fixing allegations.
Poultry companies have faced multiple
similar lawsuits, as well as an investigation by the U.S. Securities and
Exchange Commission and the scrapping of the Georgia Dock price index.
Across the food industry, antitrust
investigations have escalated in recent years as the DOJ has cracked down with
higher sentences and bigger fines. After an investigation into the tuna
industry, former Bumble Bee Foods CEO Chris Lischewski was sentenced to 40
months in prison and given a $100,000 fine after being convicted of
price-fixing.
Scott Wagner, a partner at Bilzin
Sumberg, previously said he suspects there will be more to see out of this
chicken investigation going forward, including people agreeing to plead guilty.
Pilgrim's is likely trying to distance itself from any sentencing or guilty
pleas by implementing new leadership now.
"These indictments are the
beginning, not the end, of what we're going to see in the chicken
industry," Wagner said.
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