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Indicted Pilgrim’s Pride CEO to take leave of absence

TAGS: Business
Pilgrim's Logo.jpg
Board of directors appoints CFO Fabio Sandri as interim president and CEO.

Pilgrim’s Pride announced June 14 that president and chief executive officer Jayson Penn has begun a paid leave of absence, effective immediately. The announcement comes after a federal judge recently prohibited Penn from contacting employees of eight companies involved in the case. During his leave of absence, Penn intends to focus on his defense of the recently disclosed indictment against him, to which he has pleaded not guilty, the company said.

The Pilgrim’s board of directors has appointed Fabio Sandri, Pilgrim’s chief financial officer, as interim president and CEO.

“Pilgrim’s operates with the highest standards of integrity and is committed to free and open competition that benefits both customers and consumers,” said Gilberto Tomazoni, chairman of the Pilgrim’s board of directors. “The board takes the recent allegations very seriously and believes it is in the best interests of both Jayson and the company that he is given the opportunity to focus on his legal defense during this time.”

Tomazoni continued, “Jayson has built a strong leadership team at Pilgrim’s. The board has complete confidence in the ability of Fabio and the team to continue to implement Pilgrim’s strategy and successfully run day-to-day operations.”

Sandri joined Pilgrim’s as CFO in June 2011. He brings to his role as interim CEO nine years of experience with the company as leader of its financial management and investor relations activities.

A federal grand jury in U.S. district court in Denver, Colo., returned an indictment June 3 against four executives, including Penn, for their alleged role in a conspiracy to “fix prices and rig bids" for broiler chickens, the U.S. Department of Justice said.

According to the indictment, from at least as early as 2012 until at least early 2017, Penn, Roger Austin, Mikell Fries and Scott Brady, together with co-conspirators “known and unknown to the grand jury,” allegedly conspired to fix prices and rig bids for broiler chickens across the U.S. During that time frame, Penn was an employee at a supplier but was hired as president and CEO of Pilgrim’s Pride in March 2019. Austin is a former vice president of Pilgrim’s. Fries is the president and a member of the board, and Brady is vice president of Claxton Poultry Farms headquartered in Georgia.

Penn, Austin, Fries and Brady are the first to be charged in an ongoing criminal investigation into price fixing and bid rigging involving broiler chickens, DOJ said.

The offense charged carries a statutory maximum penalty of 10 years in prison and a $1 million fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than $1 million.

Pilgrim’s issued a statement on the matter, saying, “We take this matter very seriously. The company is committed to high ethical standards, governance and free and open competition that benefits both customers and consumers.”

The company added that it will continue to fully cooperate with DOJ in its investigation.

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