Editor's Plate: Some CEOs Come and Go, Some Don't
Hormel is a study in stability … and success.
By Dave Fusaro, Editor in Chief | 02/22/2011
Billion-dollar multinational food companies are big business, obviously, so it's not unusual to see turnover in the executive suite. We noticed so much churn in the past 14 months that we decided to devote our cover story to some of the newcomers this month.
While I can only imagine the competitive pressures, especially if you're a publicly held company, you've got to wonder what the revolving doors accomplish.
Admittedly, some of the turnover appears to have been initiated by the former CEOs. Kellogg's David Mackay "retired" at the ripe old age of 55 after just four years as chief executive – who knows why? In the case of Hostess, Craig Jung was brought on purely to shepherd the predecessor company through bankruptcy. Now 73, Tyson's Leland Tollett had retired once before, in 1998.
While we were preparing this month's report, in came a news release from a certain small-town Minnesota billion-dollar food company: "Hormel Foods announces 2-for-1 stock split following record net sales."
Some of the details: "Last month [that would have been November], Hormel Foods announced fiscal year-end earnings and, for the first time, posted net sales greater than $7 billion. Today, the company announced a two-for-one stock split, the first split in more than 10 years and the ninth in company history.
"Despite the global economic recession and a challenging operating environment, Hormel Foods has continued to grow," the announcement continued, "because of its balanced business model, diversified portfolio of high-quality products, and strong leadership."
Further down: "From a split-adjusted closing price of $19.69 on Jan. 26, 2000, shares of HRL appreciated 157 percent to $50.65 as of market close on Dec. 10, 2010. Over that same time period, the S&P 500 Index declined 12 percent from $1,404.09 to $1,240.40."
The numbers, of course, tell the biggest part of the story. But buried further down in the announcement was the acknowledgement that Jeffrey Ettinger, chairman of the board, president, and CEO at Hormel Foods, soon would be celebrating his five-year anniversary as CEO. While five years isn't that long, Ettinger's been with the company for 22-years and was appointed president in 2004. He's only the ninth CEO in the company's 120 years. Another notable milestone under Ettinger's leadership was in 2009 when Hormel Foods was added to the Standard & Poor's 500 Index.
If you never visited Hormel headquarters – we have – Austin, Minn., is 100 miles from anywhere. You gotta love Hormel to be there. Apparently, many people do because, as we noted in our December 2008 Processor of the Year story Hormel is full of long-tenured employees.
Ettinger appeared to me a quiet, calm, studious guy – I don't think the facts elude him or anyone can BS him, but he won't blow up at you if the facts don't turn out the way he wanted them to. He's respected in his leadership role because he's paid his dues at the company: he's been corporate attorney, treasurer, product manager for Hormel chili, president of Jennie-O Turkey Store. He told me he sometimes does the family grocery shopping — how's that for keeping in touch with your market?
Although, with "only" 22 years at Hormel, he's far from the top of the seniority list. We talked to a number of 30-year employees and, at the time of our 2008 story, the company figured 15 percent of its employees had more than 20 years in.
And despite all the nice things we've said about him, Ettinger would be the first to say it's the employees and the company culture that keep Hormel growing. He, of course, would be right again.