Tyson CEO search may take few months

It may be a few months before Tyson Foods Inc names a permanent chief executive, the interim CEO of the world's largest meat company said on Thursday.

Candidates from outside the company may be considered, Leland Tollett told Reuters in an email.

"As I've previously said, our goal is to select someone from our existing talent pool. Viable internal candidates continue to be evaluated by the Tyson Board of Directors, which has not ruled out the possibility of considering external candidates," said Tollett.

Tollett had previously said the CEO search could take three months to three years. Tollett has been serving as the interim CEO since early January, when Richard Bond resigned and left the company.

"We are ahead of my expected timetable in restoring our company to where it needs to be financially. Therefore, I believe that a new CEO will be named closer to the front end of my original estimate than the back end, but probably not in the next few months," he said.

THREE LIKELY IN HOUSE CANDIDATES

Tyson has not identified its in-house candidates, but analysts believe Donnie Smith, who oversees chicken and prepared foods; James Lochner, who runs the beef and pork units; and Rick Greubel, who is in charge of Tyson's international business, as favorites.

Smith appears to have the inside track because of his nearly 30 years with the company and having held several positions within the company.

"It is a toss-up between Donnie and Jim. But chicken is too important so if I was to pick one today it would be Donnie," said Akshay Jagdale, food and agribusiness analyst at KeyBanc Capital Markets.

Chicken companies struggled this past year with high feed cost and low meat prices. While many of them reduced production, Tyson was one the last ones to cutback, a move that drew criticism from analysts.

TROUBLE IN CHICKEN MAY BE A FACTOR

The poor results in the chicken unit this past year could hurt Smith's chances and could be the reason the company is taking its time to name a CEO, Jagdale said.

"There is still a lot of work to do on chicken and they are going to need somebody with the ability to execute after Leland is gone. I think Donnie sets up pretty nicely." said another equity analyst, who asked not to be identified.

While Lochner's beef and pork divisions have performed better than chicken lately, his location in Dakota Dunes, South Dakota, and outside of Springdale, Arkansas, may hurt his chances, analysts said.

Tim Ramey, analyst at D.A. Davidson, said Smith and Greubel would be his leading internal candidates.

"I am concerned that Donnie appeared to be the architect of the 'I am not going to cut production strategy,'" said Ramey, referring to Tyson's reluctance last year to cut production.

Lochner was not a strong candidate in Ramey's view.

"When you leave the corporate headquarters and go back to where you came from that usually means you are easing yourself out," said Ramey. "I think Jim Lochner is semi-retired."

Lochner was with Dakota Dunes-based IBP Inc, which Tyson bought in 2001.

Tyson denied that Lochner, 56, is semi-retired and said he puts in considerable time running the beef and pork segments.

Greubel joined Tyson in 2006 after working at Monsanto.

(Reporting by Bob Burgdorfer; Editing by Andre Grenon)Wall Street Journal