Rodney McMullen, Chairman and CEO of Kroger, has stepped down following an internal investigation into his personal conduct. The company stated that while the matter was unrelated to business operations, it did not align with its ethical policies.
In response to McMullen’s resignation, board member Ronald Sargent has been appointed as interim CEO and chairman, effective immediately. Sargent, who has served on Kroger’s board since 2006 and as lead director since 2017, brings extensive experience in retail management. He previously held the role of Chairman and CEO at Staples.
McMullen, 64, started his journey with Kroger in 1978 as a part-time stock clerk and bagger in Lexington, Kentucky. Over the years, he advanced within the company, holding key leadership positions, including Chief Financial Officer in 1995 and Chief Operating Officer in 2009. He assumed the role of CEO in 2014 and became chairman the following year.
Kroger’s board became aware of the situation on February 21 and promptly engaged an independent counsel to conduct a thorough investigation, which was overseen by a special committee. The company emphasized that McMullen’s actions did not impact financial performance, operations, or employee relations.
With McMullen’s departure, Kroger has initiated a search for its next CEO, with Sargent agreeing to serve in the interim role until a permanent replacement is appointed.
The announcement had an immediate impact on Kroger’s stock, with shares dropping over 3.5% before the market opened on Monday.
This leadership transition comes at a pivotal moment for Kroger as it refocuses efforts following the collapse of its proposed merger with Albertsons. The companies had aimed to merge in a landmark $24.6 billion deal in 2022, citing the need to strengthen their competitive position against major industry players. However, the merger was blocked by legal rulings in December, citing concerns about reduced competition and potential price increases. Following the failed deal, Albertsons pursued legal action against Kroger, alleging insufficient efforts to secure regulatory approval.
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