- 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 release.
- 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 10 years in prison and up to a $1 million fine.
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.