Kroger CEO resigns after investigation into ‘personal conduct’
The chief executive of The Kroger Co. has abruptly resigned, ending a nearly 50-year-long career with the grocery giant.
Kroger announced that chairman and CEO Rodney McMullen has resigned from the company following a board investigation of his personal conduct that was unrelated to the business but “inconsistent” with Kroger's policy on business ethics.
On Feb. 21, Kroger said it was “made aware of certain personal conduct” by McMullen, prompting the board to conduct an investigation. The company said his conduct isn’t related to Kroger's “financial performance, operations or reporting, and it did not involve any Kroger associates.”
McMullen joined Kroger as a part-time stock clerk at a store in Kentucky in 1978. He worked his way up and has held several leadership positions, including CFO. He was elected to the company’s board in 2003 and appointed CEO in 2014.
The Kroger board has appointed lead director Ronald "Ron" Sargent, who is also the former chairman and CEO of Staples, to serve as chairman and interim CEO, effective immediately. It also said that Mark Sutton will serve as Kroger's lead independent director, also effective immediately.
Kroger has formed search committee and engaged a firm to conduct a search for its next CEO. Sargent will serve in his role until the appointment of the next CEO.
Sargent has been a Kroger director since 2006 and has served as the lead director of Kroger since 2017. He spent the first ten years of his professional career at Kroger, working in several roles across stores, sales, marketing, manufacturing and strategy.
Sargent is a veteran retail operator and leader with 35 years of experience, including serving as the chairman and CEO of Staples, from 2002 to 2016 after joining the company in 1989.
"As interim 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," said Sargent. "Kroger has been a special place throughout my retail career after spending summers in college working in stores, as well as my first ten years after business school at corporate headquarters, before more recently serving as lead independent director.:
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.
