Following an inquiry of Rodney McMullen’s personal behavior, which the US grocery chain claimed had nothing to do with the company’s financial performance and did not involve Kroger workers, Kroger Co. fired McMullen as CEO. With immediate effect, 69-year-old lead director Ron Sargent was appointed chairman and interim CEO. According to a statement, the business has also started looking for a long-term replacement. Sargent was the CEO of Staples Inc. until joining the board as a director in 2006. Following the news, Kroger’s stock fell 1% as of 7:25 a.m., before of regular trading in New York. As of February 28, Kroger’s stock had increased 6% so far this year, while the S&P 500 Index had advanced 1.2%.
After learning of “certain personal conduct by McMullen” on February 21, the board of directors said it promptly hired independent outside counsel to look into the matter. A special board committee is in charge of the inquiry. The corporation claimed that although the behavior had nothing to do with its operations, it was “inconsistent” with Kroger’s “business ethics” policy. For more than ten years, McMullen has been in charge of Kroger, the biggest supermarket chain in the United States. He began his career in 1978 as a part-time stock clerk in Lexington, Kentucky, and worked his way up to the executive level.
The US government halted the $24.6 billion acquisition of Albertsons Cos., which the former CEO was the face of, after determining that the takeover would reduce competition for grocery buyers. By combining over 4,000 outlets, it would have produced the largest supermarket deal in US history. In addition to losing his 2024 bonus, McMullen will forfeit all unvested equity awards that are still owed under the business’s 2019 long-term incentive plan. Any equity awards that are fully vested on the day of his resignation shall remain with him. In addition, he is a member of the boards of Xavier University and VF Corp. The board of Kroger has hired a recruiting firm and established a search committee to identify the company’s new CEO. Additionally, the firm stated that it anticipates adjusted earnings per share to be marginally above the high end of its projection range and Kroger’s full-year same sales without gasoline to be above the high end of its guidance range.