Tyson Foods Executive Compensation Overview: Strong Foundation with Unique Perks
- Mark Chisenhall, CFA
- Jul 30
- 5 min read
Updated: Oct 21
Tyson Foods' Executive Compensation Plan provides a strong foundation which offers the you'd expect from an industry leading Fortune 500 Company.
An Equity Compensation Plan (RSUs, PSUs, and Non-Qualified Stock Options) that let Execs build wealth alongside shareholders
Deferred Compensation Plan (Executive Savings Plan) allowing Execs to minimize taxable income during their peak earning years
But, what differentiates the Tyson Plan from others - including its local peers Walmart and J.B. Hunt - are two unique perks:
Age-Based Deferred Compensation Distributions - Instead of taxable payouts being triggered when you leave Tyson, you can choose a specific year to start receiving distributions — even if it's long after you’ve left the Company. This gives you far greater control over your taxable income.
The 5+1 Voluntary Separation Program - Officers with five years of service who give one year’s notice can receive a full year of salary after leaving the Company. The key word here is voluntary.
Now, let's get into the details of the various parts of the Tyson Foods Executive Compensation Plan. If you are looking to take control of your personal finances - but aren't sure where to start - this a great place to start educating yourself.
Are you interested in working with a financial planner? Check out or Services and Pricing or Schedule an introductory call to see if working with a flat-fee financial planner is right for you.
1.) Tyson Equity Compensation: RSUs, PSUs and Stock Options
Tyson is the only publicly traded company in Northwest Arkansas that offers all three forms of equity compensation:
Restricted Stock Units: Granted annually (typically in November) and vest after three years. Taxed as ordinary income when shares vest.
Performance Share Units: Awarded to senior executives based on performance metrics. Vest on a 3-year cliff schedule, with taxes due at vesting.
Non-Qualified Stock Options: The right to buy Tyson stock at a set “exercise price.” Options vest over time and expire 10 years from grant. Tax is due at exercise — giving you more control over timing than RSUs/PSUs.
Planning Opportunities for Equity Compensation
Cash Flow & Taxes: Use the cash flow from vested stock to free up salary or bonus (AIP) for tax-advantaged savings vehicles such as the 401(k), ESP and HSA.
The Value of Stock Options: Stock Options have the potential to generate significantly more wealth than the RSUs and PSUs, but of course they also have the potential to be worthless. Best suited for aspirational goals such as early retirement, vacation home, charitable giving.
Tax Withholding: The default withholding on equity compensation is typically 22% which is almost certainly lower than your actual tax rate. If you do not increase your withholding or opt for Estimated Payments, you'll likely need to plan for a large tax bill in April and possibly underpayment penalties.
Diversify: If you do not want to have a concentrated stock position in Tyson, best practice is to liquidate and diversify soon after the shares vest - especially if you are holding onto Tyson stock options.
2.) The Tyson Executive Savings Plan
The Tyson Executive Savings Plan (ESP) allows eligible employees to defer taxable income to a later date when ideally the participant is in a lower tax bracket. And what makes the Tyson ESP especially affective is the flexibility around choosing that later date! Let's summarize the key components:
Contributions: Tyson Officers are allowed to contribute up to 100% of their Bonus and 60% of Salary.
Distribution Flexibility: Participants must elect when to eventually receive this taxable income. In most cases, the distributions are triggered when a participant leaves the Company - which is the case at Walmart and J.B. Hunt. This creates uncertainty around the timing of taxable income. Tyson allows participants to choose a specific year to start receiving distributions even if that date is years after they leave Tyson. There are a lot of options - to see the available options, check out - SEC Filing (Exhibit 10.7, Article 5).
Company Match: Tyson provides a 4% match on eligible compensation to the ESP. Eligible compensation is the amount of Base Salary and Annual Bonus above the IRS limit ($350,000 in 2025). For those that contribute to the ESP, Tyson does not offer a Restoration Plan to offset any reduction in 401(k) match.
Planning Opportunities for the Tyson ESP
Tax Savings: Deferring income now (at 37%) to retirement years (10–22%) can cut lifetime taxes significantly. For tax savings, it almost always makes sense to opt for annual installments that keep payouts below the high tax bracket thresholds.
Lost 401(k) Match: 401(k) Trade-Off: ESP contributions reduce 401(k) eligible income. Compare tax savings vs. forfeited match. Since Tyson lacks a Restoration Plan, the tax savings need to outweigh the loss.
Risk Management: As with any non-qualified plan, ESP assets are subject to company credit risk.
3.) Other Notable Perks
While the equity compensation and deferred compensation plans are typically the most important pieces of the Exec Comp Plan, there are several others worth noting.
The 5+1 Voluntary Separation Program: Officers that have 5 years of consecutive service and provide the Company with a 1-year notice of separation are eligible to receive a full year of pay. While this is a severance program, what makes it unique and valuable is that it is voluntary and consistent.
Tyson Employe Stock Purchase Plan (ESPP): Contribute up to 20% of after-tax salary; after one year of service Tyson matches 25% of contributions up to 10% of salary. Contributions are immediately vested.
401(k) Match: Tyson matches up to 4% if you contribute 5% of eligible pay (100% on first 3%, 50% on next 2%).
Executive Rewards Allowance: A low five-figure annual allowance for financial planning, health/fitness, and other lifestyle services.
Tyson ESP vs. Life Insurance: Executives are often pitched insurance as a tax strategy, but contributions to the Executive Savings Plan are pre-tax, while insurance policies are funded with after-tax dollars — making the ESP far more tax efficient for high earning executives.
Wrap-Up
For Tyson executives, the most important decisions usually come down to:
How to manage equity compensation.
How to maximize tax savings with the ESP.
Get those right, and you’ll capture the majority of Tyson’s executive comp value.
If you’re a Tyson executive, you may not have expected to earn this level of compensation — and the complex financial decisions that come with it. If you are looking for education and guidance without the pressure to buy commissioned products or hand over your investments for someone else to manage, my financial planning service may be a good fit.
Are you interested in working with a financial planner? Check out details on my Services and Pricing or Schedule an introductory call to see if working with a flat-fee financial planner is right for you.
Thanks for reading,
Mark Chisenhall, CFA
Taurus Financial Planning is a Flat-Fee financial planning firm based in Bentonville, AR. The firm offers comprehensive financial planning, tax planning and investment guidance to corporate executives across the country.
Taurus Financial Planning is a Registered Investment Advisor with the State of Arkansas. This information is provided as a guide to assist you in your financial planning. The specific examples are provided for illustration purposes only and are not representative of specific investments or guarantees of future returns. Please consult with a professional for specific questions regarding your particular situation. If there is any error or inconsistency between this document and the official company plan documents, your company plan documents will govern.
This publication is for informational purposes only and is not intended as tax, accounting or legal advice or as an offer or solicitation of an offer to buy or sell or as an endorsement of any company security fund or other securities or non securities offering. This publication should not be relied upon as the sole factor in an investment making decision. Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any recommendations made by the Author, in the future, will be profitable or equal the performance noted in this publication.