The Kroger Co. Chairman and Chief Executive Officer Rodney McMullen has resigned following a board investigation of his personal conduct that, while unrelated to the business, was inconsistent with Kroger’s Policy on Business Ethics, according to a March 3 statement from the company.
Lead Director Ronald “Ron” Sargent has been appointed to serve as chairman of the board of directors and interim CEO. The board also announced that Mark Sutton will serve as Kroger’s lead independent director. Both moves are effective immediately.
On Feb. 21, the board was made aware of certain personal conduct by McMullen and immediately retained outside independent counsel to conduct an investigation, which was overseen by a special board committee.
McMullen’s conduct is not related to the company’s financial performance, operations or reporting, and it did not involve any Kroger associates.
The board of directors has formed a search committee and engaged a nationally recognized firm to conduct a search for the next Kroger CEO. Sargent has agreed to serve in his role until the appointment of the next CEO.
“I am committed to working alongside our proven and experienced management team and dedicated associates to ensure Kroger continues providing exceptional value for our customers,” Sargent said. “Kroger has been a special place throughout my retail career after spending summers in college working in stores, as well as my first 10 years after business school at corporate headquarters, before more recently serving as lead independent director.
“My decades here have given me a full appreciation of what makes Kroger unique, and I am excited to work even more closely with this talented team. I plan to be a steady but active hand in the execution of our strategy.”
Sargent has been a Kroger director since 2006 and has served as the lead director of Kroger since 2017. He served as chairman and CEO of Staples Inc. from 2002-16 after joining the company in 1989. He serves on the boards of Wells Fargo & Company, where he is chair of its human resources committee, and Five Below Inc.
In connection with his new role, Sargent will step down from three Kroger committees – audit, corporate governance and public responsibilities.
“Over the years, Ron has played an integral role in the development and approval of Kroger’s strategy, which has led us to the position of strength where we are today,” Sutton said. “Kroger will continue to deliver for our customers, invest in our associates, strengthen our communities and reward our shareholders under Ron’s leadership.”
Kroger expects full-year identical sales without fuel to be at the high end of its guidance range and full-year adjusted earnings per share to be slightly above the high end of its guidance range.
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