Dive Brief:
- Former Kroger Chairman and CEO Rodney McMullen earned compensation of about $15.6 million during the company’s most recent fiscal year, just under the amount he earned during fiscal year 2023, the supermarket chain reported in a regulatory filing on Thursday.
- McMullen, who resigned on March 2, did not receive an incentive payment for his last complete fiscal year with Kroger, but took home 6% more in stock awards in 2024 than during the prior fiscal year.
- Kroger shares rose in value by more than a third during McMullen’s final fiscal year at the helm, ahead of the performance of the S&P 500 over the same period.
Dive Insight:
Kroger’s proxy statement for McMullen’s final fiscal year running the company shows that his pay in fiscal 2024 was mostly in line with what he received in fiscal 2023 — when Kroger cut McMullen’s pay by about 18% compared with the previous year as the company’s performance weakened.
McMullen earned a base salary of just over $1.4 million during fiscal 2024, which ended Feb. 1 — slightly higher than his base salary the year before. He received stock options in 2024 valued at $10.6 million, up from slightly more than $10 million in 2023 — a change that helped make up for the fact that he did not receive incentive compensation during 2024 because he resigned. Only about 8% of McMullen’s pay during 2024 was fixed, with the balance tied to the company’s performance, Kroger said.
Kroger reported that the ratio between McMullen’s pay in 2024 and the annual total pay of its median associate was 457-1, down from 502-1 in 2023. The median pay for a Kroger associate rose from $31,302 in 2023 to $34,213 in 2024, an increase of about 9%, according to Kroger.
Kroger has not provided details about why McMullen suddenly departed from Kroger, only noting that he left after an investigation by the company’s board concluded his personal conduct was “inconsistent” with its ethics policy. The company named its lead director, Ronald Sargent, as chairman of the board of directors and as interim CEO, agreeing to pay him an annualized base salary of $4.35 million.
Kroger plans to consider internal and external candidates for the role of CEO, Sargent said during the grocer’s fourth-quarter earnings call in March.
McMullen joined Kroger in 1978 as a part-time stock clerk and worked his way up to become president and chief operating officer in 2009, CEO in 2014 and board chairman in 2015. Kroger’s stock price more than quadrupled during his time as CEO.
