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Share Name | Share Symbol | Market | Type |
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Kroger Co | NYSE:KR | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.6363 | -1.16% | 54.4537 | 54.88 | 54.23 | 54.75 | 4,937,999 | 01:00:00 |
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Under Rule 14a-12
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THE KROGER CO.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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Amount previously Paid:
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b.
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Form, Schedule or Registration Statement No.:
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c.
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Filing party:
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d.
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Date Filed:
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When:
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Thursday, June 25, 2020, at 11:00 a.m. eastern time.
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Where:
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Webcast at www.virtualshareholdermeeting.com/KR2020
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Items of Business:
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1.
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To elect 10 director nominees.
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To approve our executive compensation, on an advisory basis.
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To ratify the selection of our independent auditor for fiscal year 2020.
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To vote on two shareholder proposals, if properly presented at the meeting.
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5.
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To transact other business as may properly come before the meeting.
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Who can Vote:
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Holders of Kroger common shares at the close of business on the record date April 27, 2020 are entitled to notice of and to vote at the meeting.
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How to Vote:
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Your vote is important! Please vote your proxy in one of the following ways:
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1.
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Via the internet, by visiting www.proxyvote.com.
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By telephone, by calling the number on your proxy card, voting instruction form, or notice.
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By mail, by marking, signing, dating, and mailing your proxy card if you requested printed materials, or your voting instruction form. No postage is required if mailed in the United States.
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By mobile device, by scanning the QR code on your proxy card, notice of internet availability of proxy materials, or voting instruction form.
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5.
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By voting electronically during the Virtual Annual Meeting at www.virtualshareholdermeeting.com/KR2020.
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Attending the Meeting:
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Shareholders holding shares at the close of business on the record date may attend the virtual meeting. You will be able to attend the Annual Meeting, vote and submit your questions in advance of and real-time during the meeting via a live audio webcast by visiting www.virtualshareholdermeeting.com/KR2020. To participate in the meeting, you must have your sixteen-digit control number that is shown on your Notice of Internet Availability of Proxy Materials or on your proxy card if you receive the proxy materials by mail. You will not be able to attend the Annual Meeting in person.
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May 12, 2020
Cincinnati, Ohio |
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By Order of the Board of Directors,
Christine S. Wheatley, Secretary |
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Via the internet, by visiting www.proxyvote.com.
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By telephone, by calling the number on your proxy card, voting instruction form, or notice.
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By mail, by marking, signing, dating, and mailing your proxy card if you requested printed materials, or your voting instruction form. No postage is required if mailed in the United States.
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By mobile device, by scanning the QR code on your proxy card, notice of internet availability of proxy materials, or voting instruction form.
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By voting electronically during the Virtual Annual Meeting at www.virtualshareholdermeeting.com/KR2020.
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Proposals
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Board
Recommendation |
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Voting Approval
Standard |
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Effect of
Abstention |
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Effect of
broker Non-vote |
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No. 1 Election of Directors
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FOR each
Director Nominee |
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More votes “FOR” than “AGAINST” since an uncontested election
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No Effect
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No Effect
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No. 2 Advisory Vote to Approve Executive Compensation
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FOR
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Affirmative vote of the majority of shares participating in the voting
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No Effect
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No Effect
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No. 3 Ratification of Independent Auditors
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FOR
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Affirmative vote of the majority of shares participating in the voting
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No Effect
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Not Applicable
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Nos. 4 and 5 Shareholder Proposals
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AGAINST each
Proposal |
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Affirmative vote of the majority of shares participating in the voting
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No Effect
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No Effect
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Important Notice Regarding the Availability of Proxy Materials for the Shareholder
Meeting to be Held on June 25, 2020 |
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The Notice of 2020 Annual Meeting, Proxy Statement and 2019 Annual Report and the means to vote by internet are available at www.proxyvote.com.
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✔
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Strong Board oversight of enterprise risk.
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All director nominees are independent, except for the CEO.
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All five Board committees are fully independent.
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Robust code of ethics.
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Annual evaluation of the Chairman and CEO by the independent directors, led by the independent Lead Director.
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Annual Board and committee self-assessments.
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Commitment to Board refreshment and diversity, with 4 of 10 directors nominees being women, including the chair of the Audit Committee.
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Regular executive sessions of the independent directors, at the Board and committee level.
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Strong independent Lead Director with clearly defined role and responsibilities.
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High degree of Board interaction with management to ensure successful oversight and succession planning.
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All directors are elected annually with a simple majority standard for all uncontested director elections and by plurality in contested director elections.
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No poison pill (shareholder rights plan).
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Shareholders have the right to call a special meeting.
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Regular engagement with shareholders to understand their perspectives and concerns on a broad array of topics, including corporate governance matters.
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Responsive to shareholder feedback.
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Adopted proxy access for director nominees, enabling a shareholder, or group of up to 20 shareholders, holding 3% of the Company’s common shares for at least three years to nominate candidates for the greater of two seats or 20% of board nominees.
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Pay program tied to performance and business strategy.
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Majority of pay is long-term and at-risk with no guaranteed bonuses or salary increases.
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Stock ownership guidelines align executive and director interests with those of shareholders.
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Prohibition on all hedging, pledging, and short sales of Kroger securities by directors and executive officers.
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No tax gross-up payments to executives.
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Nora A. Aufreiter
Age 60 Director Since 2014 Committees: Financial Policy Public Responsibilities |
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Ms. Aufreiter is Director Emeritus of McKinsey & Company, a global management consulting firm. She retired in June 2014 after more than 27 years with McKinsey, most recently as a director and senior partner. During that time, she worked extensively in the U.S., Canada, and internationally with major retailers, financial institutions, and other consumer-facing companies. Before joining McKinsey, Ms. Aufreiter spent three years in financial services working in corporate finance and investment banking. She is a member of the Board of Directors of The Bank of Nova Scotia. She is also on the board of a privately held company, Cadillac Fairview, a subsidiary of Ontario Teachers Pension Plan, which is one of North America’s largest owners, operators and developers of commercial real estate. Ms. Aufreiter also serves on the boards of St. Michael’s Hospital and the Canadian Opera Company, and is a member of the Dean’s Advisory Board for the Ivey Business School in Ontario, Canada.
Ms. Aufreiter has over 30 years of broad business experience in a variety of retail sectors. Her vast experience in leading McKinsey’s North American Retail Practice, North American Branding service line and the Consumer Digital and Omnichannel service line is of particular value to the Board. She also brings to the Board valuable insight on commercial real estate. |
Anne Gates
Age 60 Director Since 2015 Committees: Audit* Public Responsibilities |
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Ms. Gates was President of MGA Entertainment, Inc., a privately-held developer, manufacturer, and marketer of toy and entertainment products for children, from 2014 until her retirement in 2017. Ms. Gates held roles of increasing responsibility with The Walt Disney Company from 1992-2012. Her roles included Executive Vice President, Managing Director, and Chief Financial Officer for Disney Consumer Products, and Senior Vice President of Operations, Planning and Analysis. Prior to joining Disney, Ms. Gates worked for PepsiCo and Bear Stearns. She is currently a director of Tapestry, Inc. and Raymond James Financial, Inc.
Ms. Gates has over 25 years of experience in the retail and consumer products industry. She brings to Kroger financial expertise gained while serving as President of MGA and CFO of a division of The Walt Disney Company. Ms. Gates has a broad business background in finance, marketing, strategy and business development, including international business. Her expertise in toy and entertainment products is of particular value to the Board. Ms. Gates has been designated an Audit Committee financial expert and serves as Chair of the Audit Committee. |
Karen M. Hoguet
Age 63 Director since 2019 Committees: Audit Financial Policy |
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Ms. Hoguet served as the Chief Financial Officer of Macy’s, Inc. from October 1997 until July of 2018 when she became a strategic advisor to the Chief Executive Officer until her retirement on February 1, 2019. Ms. Hoguet serves on the Board of Directors of Nielsen Holdings plc. She also serves on the boards of Hebrew Union College and UCHealth. In the past five years, she also served as a director of The Chubb Corporation.
Ms. Hoguet has over 30 years of retail and commercial experience. Her long tenure as a senior executive of a publicly traded company with financial, audit, strategy, and risk oversight experience is of particular value to the Board. |
Susan J. Kropf
Age 71 Director Since 2007 Committees: Compensation & Talent Development Corporate Governance |
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Ms. Kropf was President and Chief Operating Officer of Avon Products Inc., a manufacturer and marketer of beauty care products, from 2001 until her retirement in January 2007. She joined Avon in 1970 and, during her tenure at Avon, Ms. Kropf also served as Executive Vice President and Chief Operating Officer, Avon North America and Global Business Operations from 1998 to 2000 and President, Avon U.S. from 1997 to 1998. Ms. Kropf was a member of Avon’s Board of Directors from 1998 to 2006. She is currently a director of Tapestry, Inc., and Sherwin Williams Company. In the past five years she also served as a director of MeadWestvaco Corporation and Avon Products, Inc.
Ms. Kropf has unique and valuable consumer insight, having led a major, publicly-traded retailer of beauty and related consumer products. She has extensive experience in manufacturing, marketing, supply chain operations, customer service, and product development, all of which assist her in her role as a member of Kroger’s Board. Ms. Kropf has a strong financial background and has significant boardroom experience through her service on the boards of various public companies, including experience serving on compensation, audit, and corporate governance committees. She was inducted into the YWCA Academy of Women Achievers. Ms. Kropf received recognition from the National Association of Corporate Directors as an NACD Directorship 100 “Class of 2016” member. |
W. Rodney McMullen
Chairman and Chief Executive Officer Age 59 Director Since 2003 |
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Mr. McMullen was elected Chairman of the Board in January 2015 and Chief Executive Officer of Kroger in January 2014. He served as Kroger’s President and Chief Operating Officer from August 2009 to December 2013. Prior to that, Mr. McMullen was elected to various roles at Kroger including Vice Chairman in 2003, Executive Vice President, Strategy, Planning, and Finance in 1999, Senior Vice President in 1997, Group Vice President and Chief Financial Officer in June 1995, and Vice President, Planning and Capital Management in 1989. He is a director of VF Corporation. In the past five years, he also served as a director of Cincinnati Financial Corporation.
Mr. McMullen has broad experience in the supermarket business, having spent his career spanning over 40 years with Kroger. He has a strong background in finance, operations, and strategic partnerships, having served in a variety of roles with Kroger, including as our CFO, COO, and Vice Chairman. His service as chair of Cincinnati Financial Corporation’s compensation committee and on its executive and investment committees, as well as his service on the audit and nominating and governance committees of VF Corporation, adds depth to his extensive retail experience. |
Clyde R. Moore
Age 66 Director Since 1997 Committees: Compensation & Talent Development* Corporate Governance |
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Mr. Moore was the Chairman of First Service Networks, a national provider of facility and maintenance repair services, until his retirement in 2015. Prior to his retirement, he was Chairman and Chief Executive Officer of First Service Networks from 2000 to 2014.
Mr. Moore has over 30 years of general management experience in public and private companies. He has sound experience as a corporate leader overseeing all aspects of a facilities management firm and numerous manufacturing companies. Mr. Moore’s expertise broadens the scope of the Board’s experience to provide oversight to Kroger’s facilities, digital, and manufacturing businesses. Additionally, his expertise and leadership as Chair of the Compensation and Talent Development Committee is of particular value to the Board. |
Ronald L. Sargent
Lead Director Age 64 Director Since 2006 Committees: Audit Corporate Governance* Public Responsibilities |
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Mr. Sargent was Chairman and Chief Executive Officer of Staples, Inc., a business products retailer, where he was employed from 1989 until his retirement in 2017. Prior to joining Staples, Mr. Sargent spent 10 years with Kroger in various positions. He is a director of Five Below, Inc. and Wells Fargo & Company. In the past five years, he served as a director of Staples, Inc.
Mr. Sargent has over 35 years of retail experience, first with Kroger and then with increasing levels of responsibility and leadership at Staples, Inc. His efforts helped carve out a new market niche for the international retailer. His understanding of retail operations, consumer insights, and e-commerce are of particular value to the Board. Mr. Sargent has been designated an Audit Committee financial expert and serves as Lead Director of the Board. |
Bobby S. Shackouls
Age 69 Director Since 1999 Committees: Audit Corporate Governance |
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Mr. Shackouls was Chairman of the Board of Burlington Resources Inc., a natural resources business, from July 1997 until its merger with ConocoPhillips in 2006 and its President and Chief Executive Officer from December 1995 until 2006. Mr. Shackouls was also President and Chief Executive Officer of Burlington Resources Oil and Gas Company (formerly known as Meridian Oil Inc.), a wholly-owned subsidiary of Burlington Resources, from 1994 to 1995. Mr. Shackouls is a director of Oasis Petroleum Inc., Quintana Energy Services, Plains GP Holdings, L.P., and Plains All American Pipeline, L.P. Plains GP Holdings, L.P. is the ultimate general partner of Plains All American Pipeline, L.P. and although the two are separate publicly traded companies, they are governed by a single board, and directors receive compensation for service on the single board.
Mr. Shackouls brings to the Board the critical thinking that comes with a chemical engineering background, as well as his experience leading a major natural resources company, coupled with his corporate governance expertise. |
Mark S. Sutton
Age 58 Director Since 2017 Committees: Audit Public Responsibilities |
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Mr. Sutton is Chairman and Chief Executive Officer of International Paper, a leading global producer of renewable fiber-based packaging, pulp, and paper products. Prior to becoming CEO, he served as President and Chief Operating Officer with responsibility for running the company’s global business. Mr. Sutton joined International Paper in 1984 as an Electrical Engineer. He held roles of increasing responsibility throughout his career, including Mill Manager, Vice President of Corrugated Packaging Operations across Europe, the Middle East and Africa, Vice President of Corporate Strategic Planning, and Senior Vice President of several business units, including global supply chain, before being named CEO in 2014. Mr. Sutton is a member of The Business Council, serves on the American Forest & Paper Association board of directors, the Business Roundtable board of directors, and the international advisory board of the Moscow School of Management – Skolkovo. He was appointed chairman of the U.S. Russian Business Council. He also serves on the board of directors of Memphis Tomorrow and the board of governors for New Memphis Institute.
Mr. Sutton has over thirty years of leadership experience with increasing levels of responsibility and leadership at International Paper. He brings to the Board the critical thinking that comes with an electrical engineering background as well as his experience leading a global company. His strong strategic planning background and manufacturing and supply chain experience are of particular value to the Board. Mr. Sutton has been designated an Audit Committee financial expert. |
Ashok Vemuri
Age 52 Director Since 2019 Committees: Financial Policy Public Responsibilities |
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Mr. Vemuri was Chief Executive Officer and a Director of Conduent Incorporated, a global digital interactions company, since the company’s inception as a result of the spin-off from Xerox Corporation in January 2017, until 2019. He previously served as Chief Executive Officer of Xerox Business Services, LLC and as an Executive Vice President of Xerox Corporation from July 2017 to December 2017. Prior to that, he was President, Chief Executive Officer, and a member of the Board of Directors of IGATE Corporation, a New Jersey-based global technology and services company now part of Capgemini, from 2013 to 2015. Before joining IGATE, Mr. Vemuri spent 14 years at Infosys Limited, a multinational consulting and technology services company, in a variety of leadership and business development roles and served on the board of Infosys from 2011 to 2013. Prior to joining Infosys in 1999, Mr. Vemuri worked in the investment banking industry at Deutsche Bank and Bank of America. In the past five years, he served as a director of Conduent Incorporated.
Mr. Vemuri brings to the Board a proven track record of leading technology services companies through growth and corporate transformations. His experience as CEO of global technology companies is of particular value to the Board as he brings a unique operational, financial, and client experience perspective. |
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Nora
Aufreiter |
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Anne
Gates |
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Karen
Hoguet |
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Susan
Kropf |
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Rodney
McMullen |
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Clyde
Moore |
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Ronald
Sargent |
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Bobby
Shackouls |
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Mark
Sutton |
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Ashok
Vemuri |
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Total
(of 10) |
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Business
Management |
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•
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•
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•
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•
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•
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•
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•
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•
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•
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•
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10
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Retail
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•
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•
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•
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•
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•
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•
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6
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Consumer
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•
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•
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•
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•
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•
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•
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6
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Financial
Expertise |
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•
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•
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•
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•
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•
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•
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•
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•
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•
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•
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10
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Risk
Management |
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•
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•
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•
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•
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•
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•
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6
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Operations
& Technology |
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•
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•
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|
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•
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•
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•
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•
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•
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•
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•
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9
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Sustainability
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•
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•
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|
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•
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•
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|
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•
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5
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Manufacturing
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|
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•
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|
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•
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|
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•
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•
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4
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•
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reviewing and approving Board meeting agendas, materials, and schedules to confirm that the appropriate topics are reviewed, with sufficient information provided to directors on each topic and appropriate time is allocated to each;
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serving as the principal liaison between the Chairman, management, and the independent directors;
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presiding at the executive sessions of independent directors and at all other meetings of the Board at which the Chairman is not present;
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calling meetings of independent directors at any time; and
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serving as the Board’s representative for any consultation and direct communication, following a request, with major shareholders.
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facilitating communication and collegiality among the Board members;
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soliciting direct feedback from non-employee directors;
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overseeing the succession planning process, including meeting with a wide range of employees including corporate and division management associates;
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meeting with the CEO frequently to discuss strategy;
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serving as a sounding board and advisor to the CEO; and
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discussing Company matters with other directors between meetings.
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his independence;
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his deep strategic and operational understanding of Kroger obtained while serving as a Kroger director;
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his insight into corporate governance;
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his experience as the CEO of an international retailer;
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his experience on the boards of other large publicly traded companies; and
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his engagement and commitment to carrying out the role and responsibilities of the Lead Director.
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Name of Committee, Number of
Meetings, and Current Members |
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Committee Functions
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Audit Committee
Meetings in 2019 : 5 Members: Anne Gates, Chair Karen M. Hoguet Ronald L. Sargent Bobby S. Shackouls Mark S. Sutton |
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•
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Oversees the Company’s financial reporting and accounting matters, including review of the Company’s financial statements and the audit thereof, the Company’s financial reporting and accounting process, and the Company’s systems of internal control over financial reporting
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•
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Selects, evaluates, and oversees the compensation and work of the independent registered public accounting firm and reviews its performance, qualifications, and independence
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Oversees and evaluates the Company’s internal audit function, including review of its audit plan, policies and procedures, and significant findings
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Oversees risk assessment and risk management, including review of cybersecurity risks as well as legal or regulatory matters that could have a significant effect on the Company
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Reviews and monitors the Company’s compliance programs, including the whistleblower program
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Name of Committee, Number of
Meetings, and Current Members |
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Committee Functions
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Compensation Committee
Meetings in 2019: 5 Members: Clyde R. Moore, Chair Susan J. Kropf Jorge P. Montoya James A. Runde |
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•
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Recommends for approval by the independent directors the compensation of the CEO and approves the compensation of other senior management
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•
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Administers the Company’s executive compensation policies and programs, including determining grants of equity awards under the plans
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•
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Has sole authority to retain and direct the committee’s compensation consultant
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•
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Assists the full Board with senior management succession planning
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Corporate Governance Committee
Meetings in 2019: 2 Members: Ronald L. Sargent, Chair Susan J. Kropf Clyde R. Moore Bobby S. Shackouls |
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•
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Oversees the Company’s corporate governance policies and procedures
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•
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Develops criteria for selecting and retaining directors, including identifying and recommending qualified candidates to be director nominees
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•
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Designates membership and Chairs of Board committees
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Reviews the Board’s performance and director independence
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•
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Establishes and reviews the practices and procedures by which the Board performs its functions
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Financial Policy Committee
Meetings in 2019: 2 Members: James A. Runde, Chair Nora A. Aufreiter Karen M. Hoguet Ashok Vemuri |
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•
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Reviews and recommends financial policies and practices
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•
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Oversees management of the Company’s financial resources
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•
|
| |
Reviews the Company’s annual financial plan, significant capital investments, plans for major acquisitions or sales, issuance of new common or preferred stock, dividend policy, creation of additional debt and other capital structure considerations including additional leverage or dilution in ownership
|
||
|
•
|
| |
Monitors the investment management of assets held in pension and profit sharing plans administered by the Company
|
||
Public Responsibilities Committee
Meetings in 2019: 2 Members: Jorge P. Montoya, Chair Nora A. Aufreiter Anne Gates Ronald L. Sargent Mark S. Sutton Ashok Vemuri |
| |
•
|
| |
Reviews the Company’s policies and practices affecting its social and public responsibility as a corporate citizen, including: community relations, charitable giving, supplier diversity, sustainability, government relations, political action, consumer and media relations, food and pharmacy safety and the safety of customers and employees
|
|
•
|
| |
Reviews and examines the Company’s evaluation of and response to changing public expectations and public issues affecting the business
|
||
|
|
| |
|
•
|
demonstrated ability in fields considered to be of value to the Board in the deliberation and long-term planning of the Board and Kroger, including business management, public service, education, science, technology, e-commerce, law, and government;
|
•
|
experience in high growth companies and nominees whose business experience can help the Company innovate and derive new value from existing assets;
|
•
|
highest standards of personal character and conduct;
|
•
|
willingness to fulfill the obligations of directors and to make the contribution of which he or she is capable, including regular attendance and participation at Board and committee meetings, and preparation for all meetings, including review of all meeting materials provided in advance of the meeting; and
|
•
|
ability to understand the perspectives of Kroger’s customers, taking into consideration the diversity of our customers, including regional and geographic differences.
|
•
|
the value of any business transactions between Kroger and entities with which the directors are affiliated falls below the thresholds identified by the NYSE listing standards, and
|
•
|
none had any material relationships with Kroger other than serving on our Board.
|
|
Name
|
| |
Fees
Earned or Paid in Cash |
| |
Stock
Awards(1) |
| |
Option
Awards(2) |
| |
Change in Pension
Value And Nonqualified Deferred Compensation Earnings(3) |
| |
Total
|
|
|
Nora A. Aufreiter
|
| |
$89,723
|
| |
$176,530
|
| |
—
|
| |
$0
|
| |
$266,253
|
|
|
Robert D. Beyer(4)
|
| |
$36,964
|
| |
$—
|
| |
—
|
| |
$12,308
|
| |
$49,272
|
|
|
Anne Gates
|
| |
$124,615
|
| |
$176,530
|
| |
—
|
| |
0
|
| |
$301,145
|
|
|
Karen M. Hoguet(5)
|
| |
$16,954
|
| |
$102,084
|
| |
—
|
| |
0
|
| |
$119,038
|
|
|
Susan J. Kropf
|
| |
$89,723
|
| |
$176,530
|
| |
39,000
|
| |
0
|
| |
$266,253
|
|
|
Jorge P. Montoya
|
| |
$104,677
|
| |
$176,530
|
| |
39,000
|
| |
0
|
| |
$281,207
|
|
|
Clyde R. Moore
|
| |
$109,661
|
| |
$176,530
|
| |
39,000
|
| |
$145,359
|
| |
$431,550
|
|
|
James A. Runde
|
| |
$104,677
|
| |
$176,530
|
| |
26,000
|
| |
0
|
| |
$281,207
|
|
|
Ronald L. Sargent
|
| |
$152,030
|
| |
$176,530
|
| |
39,000
|
| |
$4,042
|
| |
$332,602
|
|
|
Bobby S. Shackouls
|
| |
$99,692
|
| |
$176,530
|
| |
—
|
| |
0
|
| |
$276,222
|
|
|
Mark S. Sutton
|
| |
$99,692
|
| |
$176,530
|
| |
—
|
| |
0
|
| |
$276,222
|
|
|
Ashok Vemuri
|
| |
$89,723
|
| |
$176,530
|
| |
—
|
| |
0
|
| |
$266,253
|
|
(1)
|
Amounts reported in the Stock Awards column represent the aggregate grant date fair value of the annual incentive share award, computed in accordance with FASB ASC Topic 718. On July 15, 2019, each non-employee director then serving received 7,995 incentive shares with a grant date fair value of $176,530. Ms. Hoguet received a prorated award of 3,620 shares with a grant date fair value of $102,084 on December 12, 2019 when she joined the Board.
|
(2)
|
Options are no longer granted to non-employee directors. The aggregate number of previously granted stock options that remained unexercised and outstanding at fiscal year-end was as follows: Mr. Runde held 26,000 options and Messrs. Montoya, Moore, and Sargent and Ms. Kropf each held 39,000 options.
|
(3)
|
The amounts reported for Mr. Beyer and Mr. Sargent represent preferential earnings on nonqualified deferred compensation. For a complete explanation of preferential earnings, please refer to footnote 5 to the Summary Compensation Table. The amount reported for Mr. Moore represents the change in actuarial present value of his accumulated benefit under the pension plan for non-employee directors. Pension values may fluctuate significantly from year to year depending on a number of factors, including age, average annual earnings, and the assumptions used to determine the present value, such as the discount rate. The increase in the actuarial present value of his accumulated pension benefit for 2019 is primarily due to the decrease in the discount rate, partially offset by the change in value of the benefit due to aging and mortality project scale updates.
|
(4)
|
Because Mr. Beyer retired from the Board on June 27, 2019, he received a prorated cash retainer.
|
(5)
|
Because Ms. Hoguet was appointed to the Board on December 12, 2019, she received a prorated cash retainer.
|
•
|
interest accrues until paid out at the rate of interest determined prior to the beginning of the deferral year to represent Kroger’s cost of ten-year debt; and/or
|
•
|
amounts are credited in “phantom” stock accounts and the amounts in those accounts fluctuate with the price of Kroger common shares.
|
|
Name
|
| |
Amount and Nature
of Beneficial Ownership(1) (a) |
| |
Options Exercisable
on or before May 31, 2020 – included in column (a) (b) |
|
|
Stuart Aitken(2)
|
| |
246,295
|
| |
95,590
|
|
|
Nora A. Aufreiter(3)
|
| |
34,096
|
| |
—
|
|
|
Yael Cosset
|
| |
221,313
|
| |
79,307
|
|
|
Michael J. Donnelly
|
| |
807,014
|
| |
470,029
|
|
|
Anne Gates(3)
|
| |
28,724
|
| |
—
|
|
|
Karen M. Hoguet(4)
|
| |
5,695
|
| |
—
|
|
|
Susan J. Kropf
|
| |
135,166
|
| |
39,000
|
|
|
W. Rodney McMullen
|
| |
4,775,861
|
| |
1,819,463
|
|
|
Gary Millerchip
|
| |
245,101
|
| |
75,974
|
|
|
Jorge P. Montoya(5)
|
| |
108,059
|
| |
39,000
|
|
|
Clyde R. Moore
|
| |
153,566
|
| |
39,000
|
|
|
James A. Runde
|
| |
128,578
|
| |
26,000
|
|
|
Ronald L. Sargent(3)
|
| |
179,767
|
| |
39,000
|
|
|
J. Michael Schlotman
|
| |
296,954
|
| |
195,804
|
|
|
Bobby S. Shackouls(3)
|
| |
88,974
|
| |
—
|
|
|
Mark S. Sutton(3)
|
| |
24,189
|
| |
—
|
|
|
Ashok Vemuri
|
| |
11,043
|
| |
—
|
|
|
Directors and executive officers as a group (28 persons, including those named above)
|
| |
10,607,159
|
| |
4,552,369
|
|
(1)
|
No director or officer owned as much as 1% of Kroger common shares. The directors and executive officers as a group beneficially owned 1.36% of Kroger common shares.
|
(2)
|
This amount includes 3,018 shares held by Mr. Aitken’s spouse. He disclaims beneficial ownership of these shares.
|
(3)
|
This amount includes incentive share awards that were deferred under the deferred compensation plan for independent directors in the following amounts: Ms. Aufreiter, 9,447; Ms. Gates, 7,669; Mr. Sargent, 39,129; Mr. Shackouls, 39,129; Mr. Sutton, 6,503.
|
(4)
|
This amount includes 2,075 shares held by Ms. Hoguet’s spouse. She disclaims beneficial ownership of these shares.
|
(5)
|
This amount includes 22,000 shares held in Mr. Montoya’s trust. He disclaims beneficial ownership of these shares.
|
|
Name
|
| |
Address
|
| |
Amount and Nature
of Ownership |
| |
Percentage
of Class |
|
|
BlackRock, Inc.
|
| |
55 East 52nd St.
New York, NY 10055 |
| |
57,998,196(1)
|
| |
7.20%
|
|
|
State Street Corporation
|
| |
State Street Financial Center
One Lincoln Street Boston, MA 02111 |
| |
40,494,591(2)
|
| |
5.06%
|
|
|
Vanguard Group Inc.
|
| |
100 Vanguard Blvd.
Malvern, PA 19355 |
| |
69,103,533(3)
|
| |
8.63%
|
|
(1)
|
Reflects beneficial ownership by BlackRock Inc., as of December 31, 2019, as reported on Amendment No. 10 to Schedule 13G filed with the SEC on February 5, 2020, reporting sole voting power with respect to 48,728,989 common shares, and sole dispositive power with regard to 57,998,196 common shares.
|
(2)
|
Reflects beneficial ownership by State Street Corporation as of December 31, 2019 as reported on Schedule 13G filed with the SEC on February 13, 2020, reporting shared voting power with respect to 34,718,821 common shares, and shared dispositive power with respect to 40,494,591 common shares.
|
(3)
|
Reflects beneficial ownership by Vanguard Group Inc. as of December 31, 2019, as reported on Amendment No. 5 to Schedule 13G filed with the SEC on February 12, 2020, reporting sole voting power with respect to 1,195,599 common shares, shared voting power with respect to 241,812 common shares, sole dispositive power of 67,741,558 common shares, and shared dispositive power of 1,361,975 common shares.
|
Name
|
| |
Title
|
W. Rodney McMullen
|
| |
Chairman and Chief Executive Officer
|
Gary Millerchip
|
| |
Senior Vice President and Chief Financial Officer
|
Stuart Aitken
|
| |
Senior Vice President, Alternative Business
|
Yael Cosset
|
| |
Senior Vice President and Chief Information Officer
|
Michael J. Donnelly
|
| |
Executive Vice President and Chief Operating Officer
|
J. Michael Schlotman
|
| |
Executive Vice President and Retired Chief Financial Officer
|
|
What we do:
|
| |
What we do not do:
|
|
|
✔ Align pay and performance
✔ Significant share ownership guidelines of 5x salary for our CEO ✔ Multiple performance metrics under our short- and long-term performance-based plans discourage excessive risk taking at the expense of long-term results ✔ Double trigger change in control provisions in all equity awards beginning in 2019 ✔ All long-term compensation is equity-based beginning in 2019 ✔ Engagement of an independent compensation consultant ✔ Robust clawback policy ✔ Ban on hedging, pledging and short sales of Kroger securities ✔ Minimal perquisites |
| |
✘ No employment contracts with executives
✘ No special severance or change in control programs applicable only to executive officers ✘ No single-trigger cash severance benefits upon a change in control ✘ No cash component of the new long-term incentive plan ✘ No tax gross-up payments for executives ✘ No special executive life insurance benefit ✘ No re-pricing or backdating of options without shareholder approval ✘ No guaranteed salary increases or bonuses ✘ No payment of dividends or dividend equivalents until performance units are earned |
|
•
|
No increase to base salary
|
•
|
No increase to the target annual cash bonus
|
•
|
Elimination of the cash component of the long-term incentive plan
|
•
|
An increase to the total long-term incentive opportunity from $10 million to $10.5 million
|
•
|
A long-term incentive compensation value mix comprised of 50% performance units, 30% restricted stock, and 20% stock options
|
•
|
A total increase to target total direct compensation of 3.6%
|
|
Year
|
| |
Base
Salary |
| |
Target
Annual Incentive |
| |
Long-Term
Cash Bonus |
| |
Performance
Units |
| |
Restricted
Stock |
| |
Stock
Options |
| |
Total
LTI |
| |
Target
TDC |
| |
Increase
|
|
|
2019
|
| |
$1,316
|
| |
$2,500
|
| |
—
|
| |
$5,250
|
| |
$3,150
|
| |
$2,100
|
| |
$10,500
|
| |
$14,316
|
| |
3.6%
|
|
|
2018
|
| |
$1,316
|
| |
$2,500
|
| |
$2,632
|
| |
$2,632
|
| |
$2,368
|
| |
$2,368
|
| |
$10,000
|
| |
$13,816
|
| |
|
|
•
|
A significant portion of pay should be performance-based, with the percentage of total pay tied to performance increasing proportionally with an NEO’s level of responsibility.
|
•
|
Compensation should include incentive-based pay to drive performance, providing superior pay for superior performance, including both a short- and long-term focus.
|
•
|
Compensation policies should include an opportunity for, and a requirement of, equity ownership to align the interests of NEOs and shareholders.
|
•
|
Components of compensation should be tied to an evaluation of business and individual performance measured against metrics that directly drive our business strategy.
|
•
|
Compensation plans should be clear and simple and provide a direct line of sight to company performance.
|
•
|
Compensation programs should be aligned with market practices.
|
•
|
Compensation programs should serve to both motivate and retain talent.
|
•
|
First, the Compensation Committee believes that compensation must be designed to attract and retain those individuals who are best suited to be an officer at Kroger.
|
•
|
Second, a majority of compensation should help align the interests of our NEOs with the interests of our shareholders.
|
•
|
Third, compensation should create strong incentives for the NEOs to achieve the annual business plan targets established by the Board, and to achieve Kroger’s long-term strategic objectives.
|
•
|
Annual Compensation:
|
○
|
Salary
|
○
|
Performance-Based Annual Cash Bonus
|
•
|
Long-Term Compensation:
|
○
|
Performance-Based Long-Term Incentive Plan consisting only of performance units; eliminated cash portion of plan for the 2019 program
|
○
|
Non-qualified stock options
|
○
|
Restricted stock
|
•
|
Retirement and other benefits
|
•
|
Minimal perquisites
|
•
|
An assessment of individual contribution in the judgment of the CEO and the Compensation Committee (or, in the case of the CEO, all of the independent directors);
|
•
|
Benchmarking with comparable positions at peer group companies;
|
•
|
Tenure in role; and
|
•
|
Relationship to other Kroger executives’ salaries.
|
•
|
Leadership;
|
•
|
Contribution to the officer group;
|
•
|
Achievement of established objectives;
|
•
|
Decision-making abilities;
|
•
|
Performance of the areas or groups directly reporting to the NEO;
|
•
|
Increased responsibilities;
|
•
|
Strategic thinking; and
|
•
|
Furtherance of Kroger’s purpose: To Feed the Human Spirit.
|
•
|
The individual’s level within the organization, as the Compensation Committee believes that more senior executives should have a more substantial part of their compensation dependent upon Kroger’s performance;
|
•
|
The individual’s salary, as the Compensation Committee believes that a significant portion of a NEO’s total cash compensation should be dependent upon Kroger’s performance;
|
•
|
Individual performance;
|
•
|
The recommendation of the CEO for the other NEOs; and
|
•
|
The compensation consultant’s benchmarking report regarding annual cash bonus potential and total compensation awarded by our peer group.
|
Metric
|
| |
Weight
|
| |
Rationale for Use
|
|||
ID Sales, excluding fuel
|
| |
|
| |
•
|
| |
Identical Sales (“ID Sales”) represent sales, excluding fuel, at our supermarkets that have been open without expansion or relocation for five full quarters, plus sales growth at all other customer-facing non-supermarket business, including Kroger Specialty Pharmacy and ship to home solutions.
|
|
| |
|
| |
•
|
| |
The change in this metric from ID Supermarket Sales, excluding fuel, to total company ID Sales, excluding fuel, is consistent with a change in the Company’s reporting during fiscal year 2018. We now calculate ID Sales to be more inclusive of Company business units, and this measure presents a comprehensive view of our performance as we redefine the grocery customer experience, and is therefore a more appropriate measure of company performance than ID Supermarket Sales.
|
|
| |
Combined 67%
|
| |
•
|
| |
We believe that ID sales are the best measure of real growth of our sales across the enterprise. A key driver of our model is ID Sales growth.
|
Adjusted FIFO Operating Profit, including fuel
|
| |
•
|
| |
Adjusted FIFO Operating Profit, including fuel, is a key measure of company success. An earnings measure like this helps track our earnings from operations, and it measures our day-to-day operational effectiveness.
|
|||
|
| |
|
| |
•
|
| |
Adjusted FIFO Operating Profit is a non-GAAP calculation reflecting operating profit, including fuel, minus the LIFO charge, and adjusted by excluding certain items included in FIFO Operating Profit. This calculation is the non-GAAP adjusted operating profit measure that we disclose, and reconcile, in our financial statements.
|
Kroger Way Plans
|
| |
33%
|
| |
•
|
| |
Each major business line and department created a Kroger Way Plan – a strategic business plan to directly support one of the four pillars of Restock Kroger; each of which outlines both the resource allocation and the return commitment for that plan.
|
|
| |
|
| |
•
|
| |
We measure the success of the Kroger Way Plans with an internal calculation called Restock Savings & Benefits, which is a combination of cost savings generated under our Kroger Way Plans, incremental profits from ID sales growth, and incremental net operating profit from our alternative profit streams.
|
Total of 3 Metrics
|
| |
100%
|
| |
|
| |
|
|
|
| |
|
| |
ID Sales, excluding Fuel
|
| ||||||||||||
|
|
| |
|
| |
1.30%
|
| |
1.70%
|
| |
2.40%
|
| |
2.70%
|
| |
3.10%
|
|
|
Adjusted FIFO Operating Profit,
|
| |
$2,750 to 3,000
|
| |
15%
|
| |
35%
|
| |
70%
|
| |
85%
|
| |
105%
|
|
|
including Fuel
|
| |
Greater than $3,000 to 3,100
|
| |
20%
|
| |
60%
|
| |
130%
|
| |
170%
|
| |
200%
|
|
|
(in millions)
|
| |
Greater than $3,100
|
| |
20%
|
| |
60%
|
| |
130%
|
| |
170%
|
| |
250%
|
|
|
Restock Savings & Benefits Results
|
| |
Payout
|
|
|
Less than $1.36 Billion
|
| |
0% payout
|
|
|
$1.36 Billion to $1.46 Billon
|
| |
Interpolated payout between 1 and 99%
|
|
|
$1.46 Billon
|
| |
100% payout
|
|
|
Performance Metrics
|
| |
Result
|
| |
Payout
Percentage1 (A) |
| |
Weight
(B) |
| |
Amount
Earned (A) x (B) |
|
|
ID Sales/OP
|
| |
ID Sales = 2.01%
OP = $2.96 Billion |
| |
50.5%
|
| |
67%
|
| |
33.84%
|
|
|
Kroger Way Plans
|
| |
$1.41 Billion
|
| |
46.2%
|
| |
33%
|
| |
15.25%
|
|
|
Total Earned
|
| |
|
| |
|
| |
|
| |
49.09%
|
|
(1)
|
See grids above.
|
|
|
| |
Payout
Percentage (A) |
| |
Weight
(B) |
| |
Amount
Earned (A) x (B) |
|
|
Corporate Annual Bonus Plan
|
| |
49.09%
|
| |
50%
|
| |
24.55%
|
|
|
Alternative Profit Streams
|
| |
93.0%
|
| |
25%
|
| |
23.25%
|
|
|
Supermarket ID Sales
|
| |
41.0%
|
| |
25%
|
| |
10.25%
|
|
|
Total Earned
|
| |
|
| |
|
| |
58.0%
|
|
|
Fiscal Year
|
| |
|
Annual Cash Bonus
Payout Percentage |
|
|
2019
|
| |
|
49.09%
|
|
|
2018
|
| |
|
91.2%
|
|
|
2017
|
| |
|
3.8%
|
|
|
2016
|
| |
|
19.9%
|
|
|
2015
|
| |
|
126.7%
|
|
|
2014
|
| |
|
121.5%
|
|
|
2013
|
| |
|
104.9%
|
|
|
2012
|
| |
|
85.9%
|
|
|
2011
|
| |
|
138.7%
|
|
|
2010
|
| |
|
53.9%
|
|
•
|
Performance-Based
|
○
|
Long-term performance-based compensation is provided under a Long-Term Incentive Plan adopted by the Compensation Committee. The Committee adopts a new plan every year, measuring improvement on the Company’s long-term goals over successive three-year periods. Accordingly, at any one time there are three plans outstanding, which are summarized below.
|
○
|
Under the Long-Term Incentive Plans, NEOs receive grants of equity called performance units, and until 2019 received cash “grants” as well. A fixed number of performance units based on level and individual performance is awarded to each participant at the beginning of the three-year performance period and prior to 2019 a cash bonus base was set as well.
|
○
|
Payouts under the plan are contingent on the achievement of certain strategic performance and financial measures and incentivize recipients to promote long-term value creation and enhance shareholder wealth by supporting the Company’s long-term strategic goals.
|
○
|
The payout percentage, based on the extent to which the performance metrics are achieved, is applied to both the long-term cash bonus potential (for plans prior to 2019) and the number of performance units awarded.
|
○
|
Performance units are “paid out” in Kroger common shares based on actual performance, along with a cash amount equal to the dividends paid during the performance period on the number of issued common shares.
|
•
|
Time-Based
|
○
|
Long-term time-based compensation consists of stock options and restricted stock, which are linked to common share performance creating alignment between the NEOs’ and our shareholders’ interests.
|
○
|
Stock options have no initial value and recipients only realize benefits if the value of our common shares increases following the date of grant, further aligning the NEOs’ and our shareholders’ interests.
|
•
|
The NEO’s level in the organization and the internal relationship of long-term compensation awards within Kroger;
|
•
|
The compensation consultant’s benchmarking report regarding long-term compensation awarded by our peer group;
|
•
|
Individual performance; and
|
•
|
The recommendation of the CEO, for the other NEOs.
|
•
|
Cumulative Restock Savings & Benefits is an internal calculation that is a combination of cost savings generated under our Kroger Way Plans; incremental profits from ID sales growth; and incremental net operating profit from our alternative profit streams.
|
•
|
Cumulative Free Cash Flow is an adjusted free cash flow measure calculated as net cash provided by operating activities minus net cash used by investing activities plus or minus adjustments for certain items.
|
|
Metric
|
| |
Baseline
|
| |
Result
|
| |
Improvement
(A) |
| |
Payout per
Improvement (B) |
| |
Percentage
Earned (A) x (B) |
|
|
Customer 1st Strategy(1)
|
| |
*
|
| |
*
|
| |
No improvement
|
| |
4.0%
|
| |
0.0%
|
|
|
Improvement in Associate Engagement(1)
|
| |
*
|
| |
*
|
| |
No improvement
|
| |
4.0%
|
| |
0.0%
|
|
|
Reduction in Operating Cost as a Percentage of Sales, without Fuel(2)
|
| |
26.17%
|
| |
27.17%
|
| |
No improvement
|
| |
0.5%
|
| |
0.0%
|
|
|
Return on Invested Capital(3)
|
| |
13.23%
|
| |
11.20%
|
| |
No improvement
|
| |
1.0%
|
| |
0.0%
|
|
|
Total
|
| |
|
| |
|
| |
|
| |
|
| |
0.0%
|
|
(1)
|
The Customer 1st Strategy and Improvement in Associate Engagement components were established by the Compensation Committee at the beginning of the performance period, but are not disclosed as they are competitively sensitive.
|
(2)
|
Operating Costs is a non-GAAP measure and is calculated as the sum of (i) operating, general and administrative expenses, depreciation and amortization, and rent expense, without fuel, and (ii) warehouse and transportation costs, shrink, and advertising expenses, for our supermarket operations, without fuel.
|
(3)
|
Return on invested capital is a non-GAAP measure and is calculated by dividing adjusted operating profit for the prior four quarters by the average invested capital. Adjusted operating profit is calculated by excluding certain items included in operating profit, and adding our last-in, first out (“LIFO”) charge, depreciation and amortization, and rent. Average invested capital is calculated as the sum of (i) the average of our total assets, (ii) the average LIFO reserve, (iii) the average accumulated depreciation and amortization, and (iv) a rent factor equal to total rent for the last four quarters multiplied by a factor of eight; minus (i) the average taxes receivable, (ii) the average trade accounts payable, (iii) the average accrued salaries and wages, and (iv) the average other current liabilities, excluding accrued income taxes.
|
|
|
| |
Cut in = 50%
Payout |
| |
Goal = 100%
Payout |
| |
Result
|
| |
Payout
Percentage |
| |
Weight
|
| |
Payout
Amount |
|
|
Cumulative Restock Savings & Benefits
|
| |
$1.95B
|
| |
$2.50B
|
| |
$2.51B
|
| |
100%
|
| |
50%
|
| |
50%
|
|
|
Cumulative Free Cash Flow(1)
|
| |
$2.80B
|
| |
$4.00B
|
| |
$3.59B
|
| |
83%
|
| |
50%
|
| |
41.5%
|
|
|
Total Payout
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
91.5%
|
|
(1)
|
Cumulative Free Cash Flow is a non-GAAP measure calculated as net cash provided by operating activities minus net cash used by investing activities plus, in this case, an amount equal to cash taxes paid on the gain on the sale of Turkey Hill Dairy and You Technology.
|
|
ROIC Modifier Component
|
| |||
|
ROIC Results
|
| |
Payout Modifier
|
|
|
Less than 12.12%
|
| |
80%
|
|
|
12.12% - 12.32%
|
| |
100%
|
|
|
Greater than 12.32%
|
| |
120%
|
|
•
|
The Committee eliminated the cash portion of the long-term performance-based compensation, maintaining only equity, in the form of performance units, in the plan.
|
•
|
With respect to the equity grants awarded each year, the Committee combined time-based and performance based long-term equity into one program with consistent guidelines and rebalanced the forms of equity as follows:
|
○
|
50% performance units
|
○
|
30% restricted stock
|
○
|
20% stock options
|
|
ROIC Modifier Component
|
| |||
|
FY 2021 ROIC Results
|
| |
Payout Modifier
|
|
|
Less than 12.24%
|
| |
80%
|
|
|
12.24% - 12.44%
|
| |
100%
|
|
|
Greater than 12.44%
|
| |
120%
|
|
•
|
base salary;
|
•
|
target performance-based annual cash bonus;
|
•
|
target annual cash compensation (the sum of salary and annual cash bonus potential);
|
•
|
long-term incentive compensation, comprised of performance units, stock options and restricted stock; and
|
•
|
total direct compensation (the sum of target annual cash compensation and long-term compensation).
|
Best Buy
|
| |
Home Depot
|
| |
Target
|
Cardinal Health
|
| |
Johnson & Johnson
|
| |
TJX Companies
|
Costco Wholesale
|
| |
Lowes
|
| |
Wal-Mart
|
CVS Health
|
| |
Procter & Gamble
|
| |
Walgreens Boots Alliance
|
Express Scripts
|
| |
Sysco
|
| |
|
•
|
Conducts an annual review of all components of compensation, quantifying total compensation for the NEOs including a summary for each NEO of salary; performance-based annual cash bonus; long-term performance-based equity comprised of performance units, stock options and restricted stock.
|
•
|
Considers internal pay equity at Kroger to ensure that the CEO is not compensated disproportionately. The Compensation Committee has determined that the compensation of the CEO and that of the other NEOs bears a reasonable relationship to the compensation levels of other executive positions at Kroger taking into consideration performance and differences in responsibilities.
|
•
|
Reviews a report from the Compensation Committee’s compensation consultant reflecting a comprehensive review of each element of pay mix, both annual and long-term and comparing NEO compensation with that of other companies, including both our peer group of competitors and a larger general industry group, to ensure that the Compensation Committee’s objectives of competitiveness are met.
|
•
|
Takes into account a recommendation from the CEO (except in the case of his own compensation) for salary, annual cash bonus potential and long-term compensation awards for each of the senior officers including the other NEOs. The CEO’s recommendation takes into consideration the objectives established by and the reports received by the Compensation Committee as well as his assessment of individual job performance and contribution to our management team.
|
•
|
Our 2020 Annual Cash Bonus Plan is likely to have the following components: ID sales, excluding fuel and adjusted FIFO operating profit, including fuel, with an associate experience kicker.
|
•
|
With respect to our long-term performance-based compensation, since 2018, Kroger’s metrics in its Long-Term Incentive Plans have focused on key Restock Kroger metrics. With the three-year financial targets of the 2018-2020 Restock Kroger plan concluding in 2020, the Compensation Committee reconsidered the long-term incentive plan framework. In November 2019, Kroger committed to investors an 8-11% Total Shareholder Return (TSR) target. The Committee determined that going forward, the Long-Term Incentive Plan metrics should align with Kroger’s long-term business plans and guidance that we communicated to shareholders. Accordingly, the 2020-2022 Long-Term Bonus Plan is likely to have the following components which support our long term business plans: total sales without fuel + fuel gallons; cumulative growth in net operating profit; cumulative growth in free cash flow; a fresh metric; and a total shareholder return modifier.
|
|
Position
|
| |
Multiple
|
|
|
Chief Executive Officer
|
| |
5 times base salary
|
|
|
President and Chief Operating Officer
|
| |
4 times base salary
|
|
|
Executive Vice Presidents and Senior Vice Presidents
|
| |
3 times base salary
|
|
|
Group Vice Presidents, Division Presidents, and Other Designated Key Executives
|
| |
2 times base salary
|
|
|
Non-employee Directors
|
| |
5 times annual base cash retainer
|
|
•
|
the materiality of the amount of payment involved;
|
•
|
the extent to which other benefits were reduced in other years as a result of the achievement of performance levels based on the error;
|
•
|
individual officer culpability, if any; and
|
•
|
other factors that should offset the amount of overpayment.
|
|
Name and Principal
Position |
| |
Fiscal
Year |
| |
Salary
($) |
| |
Stock
Awards ($)(1) |
| |
Option
Awards ($)(2) |
| |
Non-Equity
Incentive Plan Compensation ($)(3) |
| |
Change in
Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) |
| |
All Other
Compensation ($)(5) |
| |
Total
($) |
|
|
W. Rodney McMullen
|
| |
2019
|
| |
$1,311,849
|
| |
$8,400,002
|
| |
$2,100,170
|
| |
$2,006,450
|
| |
$6,962,485
|
| |
$348,692
|
| |
$21,129,648
|
|
|
Chairman and Chief
|
| |
2018
|
| |
$1,311,984
|
| |
$4,999,996
|
| |
$2,367,858
|
| |
$2,692,833
|
| |
$335,955
|
| |
$329,246
|
| |
$12,037,872
|
|
|
Executive Officer
|
| |
2017
|
| |
$1,318,752
|
| |
$5,166,317
|
| |
$2,700,116
|
| |
$359,806
|
| |
$1,690,923
|
| |
$298,463
|
| |
$11,534,377
|
|
|
Gary Millerchip
|
| |
2019
|
| |
$472,561
|
| |
$2,350,034
|
| |
$775,042
|
| |
$442,755
|
| |
$0
|
| |
$101,888
|
| |
$4,142,280
|
|
|
Senior Vice President
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
and Chief Financial Officer(6)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Stuart Aitken
|
| |
2019
|
| |
$822,460
|
| |
$2,225,025
|
| |
$600,051
|
| |
$830,446
|
| |
$0
|
| |
$134,801
|
| |
$4,612,783
|
|
|
Senior Vice President,
|
| |
2018
|
| |
$724,946
|
| |
$1,059,224
|
| |
$224,548
|
| |
$817,670
|
| |
$0
|
| |
$107,830
|
| |
$2,934,218
|
|
|
Alternative Business
|
| |
2017
|
| |
$721,328
|
| |
$1,275,567
|
| |
$262,612
|
| |
$160,015
|
| |
$0
|
| |
$110,363
|
| |
$2,529,884
|
|
|
Yael Cosset
|
| |
2019
|
| |
$638,519
|
| |
$1,825,016
|
| |
$500,042
|
| |
$572,191
|
| |
$0
|
| |
$110,044
|
| |
$3,645,812
|
|
|
Senior Vice President
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
and Chief Information Officer
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
|
|
Michael Donnelly
|
| |
2019
|
| |
$922,516
|
| |
$3,200,002
|
| |
$800,064
|
| |
$1,060,269
|
| |
$4,111,824
|
| |
$235,009
|
| |
$10,329,684
|
|
|
Executive Vice President
|
| |
2018
|
| |
$885,677
|
| |
$2,355,780
|
| |
$769,118
|
| |
$1,344,160
|
| |
$205,544
|
| |
$133,014
|
| |
$5,693,293
|
|
|
And Chief Operating Officer
|
| |
2017
|
| |
$817,967
|
| |
$2,230,028
|
| |
$780,637
|
| |
$183,832
|
| |
$1,032,483
|
| |
$247,149
|
| |
$5,292,096
|
|
|
J. Michael Schlotman
|
| |
2019
|
| |
$854,879
|
| |
$1,792,989
|
| |
$0
|
| |
$1,061,055
|
| |
$4,207,937
|
| |
$550,563
|
| |
$8,467,423
|
|
|
Executive Vice President and
|
| |
2018
|
| |
$907,292
|
| |
$2,350,843
|
| |
$752,700
|
| |
$1,374,160
|
| |
$295,994
|
| |
$91,133
|
| |
$5,772,122
|
|
|
Retired Chief Financial Officer(6)
|
| |
2017
|
| |
$898,316
|
| |
$ 1,973,228
|
| |
$ 1,040,846
|
| |
$207,136
|
| |
$873,808
|
| |
$242,637
|
| |
$5,235,971
|
|
(1)
|
Amounts reflect the grant date fair value of restricted stock and performance units granted each fiscal year, as computed in accordance with FASB ASC Topic 718. The following table reflects the value of each type of award granted to the NEOs in 2019:
|
|
Name
|
| |
Restricted Stock
|
| |
Performance Units
|
|
|
Mr. McMullen
|
| |
$3,150,007
|
| |
$5,249,995
|
|
|
Mr. Millerchip
|
| |
$1,350,035
|
| |
$999,999
|
|
|
Mr. Aitken
|
| |
$975,026
|
| |
$1,249,999
|
|
|
Mr. Cosset
|
| |
$825,017
|
| |
$999,999
|
|
|
Mr. Donnelly
|
| |
$1,200,004
|
| |
$1,999,998
|
|
|
Mr. Schlotman
|
| |
0
|
| |
$1,792,989
|
|
|
Name
|
| |
Value of Performance Units
Assuming Maximum Performance |
|
|
Mr. McMullen
|
| |
$6,299,994
|
|
|
Mr. Millerchip
|
| |
$1,199,999
|
|
|
Mr. Aitken
|
| |
$1,499,999
|
|
|
Mr. Cosset
|
| |
$1,199,999
|
|
|
Mr. Donnelly
|
| |
$2,399,998
|
|
|
Mr. Schlotman
|
| |
$2,151,587
|
|
(2)
|
These amounts represent the aggregate grant date fair value of option awards computed in accordance with FASB ASC Topic 718. The assumptions used in calculating the valuations are set forth in Note 12 to the consolidated financial statements in Kroger’s Form 10-K for fiscal year 2019.
|
(3)
|
Non-equity incentive plan compensation earned for 2019 consists of amounts earned under the 2019 performance-based annual cash bonus plan and the 2017-2019 Long-Term Incentive Plan.
|
|
Name
|
| |
Annual Cash Bonus
|
| |
Long-Term Cash Bonus
|
|
|
Mr. McMullen
|
| |
$1,227,175
|
| |
$779,275
|
|
|
Mr. Millerchip
|
| |
$254,875
|
| |
$187,880
|
|
|
Mr. Aitken
|
| |
$406,343
|
| |
$424,103
|
|
|
Mr. Cosset
|
| |
$258,651
|
| |
$313,540
|
|
|
Mr. Donnelly
|
| |
$589,044
|
| |
$471,225
|
|
|
Mr. Schlotman
|
| |
$543,733
|
| |
$517,322
|
|
(4)
|
For 2019, the amounts reported consist of the aggregate change in the actuarial present value of each NEO’s accumulated benefit under a defined benefit pension plan (including supplemental plans), which applies to Messrs. McMullen, Donnelly and Schlotman, and preferential earnings on nonqualified deferred compensation, which applies to Messrs. McMullen and Donnelly. The remainder of the NEOs do not participate in a nonqualified deferred compensation plan.
|
|
Name
|
| |
Change in
Pension Value |
| |
Preferential Earnings on Nonqualified
Deferred Compensation |
|
|
Mr. McMullen
|
| |
$6,840,110
|
| |
$122,375
|
|
|
Mr. Millerchip
|
| |
$—
|
| |
$—
|
|
|
Mr. Aitken
|
| |
$—
|
| |
$—
|
|
|
Mr. Cosset
|
| |
$—
|
| |
$—
|
|
|
Mr. Donnelly
|
| |
$4,104,897
|
| |
$6,927
|
|
|
Mr. Schlotman
|
| |
$4,207,937
|
| |
$—
|
|
(5)
|
Amounts reported in the “All Other Compensation” column for 2019 include Company contributions to defined contribution retirement plans, dividend equivalents paid on earned performance units, and dividends paid on unvested restricted stock. The following table identifies the value of each benefit.
|
|
Name
|
| |
Retirement Plan
Contributions(a) |
| |
Payment of
Dividend Equivalents on Earned Performance Units |
| |
Dividends
Paid on Unvested Restricted Stock |
| |
Other(b)
|
|
|
Mr. McMullen
|
| |
$4,983
|
| |
$122,129
|
| |
$221,580
|
| |
—
|
|
|
Mr. Millerchip
|
| |
$43,928
|
| |
$8,408
|
| |
$49,552
|
| |
—
|
|
|
Mr. Aitken
|
| |
$75,608
|
| |
$10,732
|
| |
$48,461
|
| |
—
|
|
|
Mr. Cosset
|
| |
$53,890
|
| |
$8,387
|
| |
$47,767
|
| |
—
|
|
|
Mr. Donnelly
|
| |
$105,252
|
| |
$31,906
|
| |
$97,851
|
| |
—
|
|
|
Mr. Schlotman
|
| |
$—
|
| |
$41,454
|
| |
$73,989
|
| |
$435,120
|
|
(a)
|
Retirement plan contributions. The Company makes automatic and matching contributions to NEOs’ accounts under the applicable defined contribution plan on the same terms and using the same formulas as other participating employees. The Company also makes contributions to NEOs’ accounts under the applicable defined contribution plan restoration plan, which is intended to make up the shortfall in retirement benefits caused by the limitations on benefits to highly compensated individuals under the defined contribution plans in accordance with the Code. The aggregate amounts in the table above include the following additional contributions for Mr. Donnelly for 2019: a $14,000 matching contribution to the Dillon Companies, Inc. Employees’ Profit Sharing Plan and a $87,377 matching contribution to the Dillon Companies, Inc. Excess Benefit Profit Sharing Plan.
|
(b)
|
Other. In 2019, the total amount of perquisites and personal benefits for each of the NEOs was less than $10,000. Mr. Schlotman received $435,120 for banked vacation which was paid out upon his retirement.
|
(6)
|
Mr. Schlotman served as our Chief Financial Officer until April 3, 2019 and as our Executive Vice President until his retirement from the Company on December 31, 2019. Mr. Millerchip succeeded him as Chief Financial Officer on April 4, 2019.
|
|
Name
|
| |
Grant
Date |
| |
Estimated Possible Payouts
Under Non-Equity Incentive Plan Awards |
| |
Estimated Future
Payouts Under Equity Incentive Plan Awards |
| |
All Other
Stock Awards: Number of Shares of Stock or Units (#)(3) |
| |
All Other
Option Awards: Number of Securities Underlying Options (#)(4) |
| |
Exercise
or Base Price of Option Awards ($/Sh) |
| |
Grant
Date Fair Value of Stock and Option Awards |
| ||||||
|
Target
($) |
| |
Maximum
($) |
| |
Target
(#)(2) |
| |
Maximum
(#)(2) |
| ||||||||||||||||||
|
W. Rodney McMullen
|
| |
|
| |
$2,500,000(1)
|
| |
$5,000,000(1)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
3/14/2019
|
| |
|
| |
|
| |
|
| |
|
| |
127,273
|
| |
|
| |
|
| |
$3,150,007
|
|
|
|
| |
3/14/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
348,259
|
| |
$24.75
|
| |
$2,100,170
|
|
|
|
| |
3/14/2019
|
| |
|
| |
|
| |
212,121
|
| |
254,545
|
| |
|
| |
|
| |
|
| |
$5,249,995
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Gary Millerchip
|
| |
|
| |
$550,000(1)
|
| |
$1,100,000(1)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
3/14/2019
|
| |
|
| |
|
| |
|
| |
|
| |
33,334
|
| |
|
| |
|
| |
$825,017
|
|
|
|
| |
7/15/2019
|
| |
|
| |
|
| |
|
| |
|
| |
23,778
|
| |
|
| |
|
| |
$525,018
|
|
|
|
| |
3/14/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
82,919
|
| |
$24.75
|
| |
$500,042
|
|
|
|
| |
7/15/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
51,116
|
| |
$22.08
|
| |
$275,000
|
|
|
|
| |
3/14/2019
|
| |
|
| |
|
| |
40,404
|
| |
48,485
|
| |
|
| |
|
| |
|
| |
$999,999
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Stuart Aitken
|
| |
|
| |
$700,000(1)
|
| |
$1,400,000(1)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
3/14/2019
|
| |
|
| |
|
| |
|
| |
|
| |
39,395
|
| |
|
| |
|
| |
$975,026
|
|
|
|
| |
3/14/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
99,503
|
| |
$24.75
|
| |
$600,051
|
|
|
|
| |
3/14/2019
|
| |
|
| |
|
| |
50,505
|
| |
60,606
|
| |
|
| |
|
| |
|
| |
$1,249,999
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Yael Cosset
|
| |
|
| |
$550,000(1)
|
| |
$1,100,000(1)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
3/14/2019
|
| |
|
| |
|
| |
|
| |
|
| |
33,334
|
| |
|
| |
|
| |
$825,017
|
|
|
|
| |
3/14/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
82,919
|
| |
$24.75
|
| |
$500,042
|
|
|
|
| |
3/14/2019
|
| |
|
| |
|
| |
40,404
|
| |
48,485
|
| |
|
| |
|
| |
|
| |
$999,999
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Michael J. Donnelly
|
| |
|
| |
$1,200,000(1)
|
| |
$2,400,000(1)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
3/14/2019
|
| |
|
| |
|
| |
|
| |
|
| |
48,485
|
| |
|
| |
|
| |
$1,200,004
|
|
|
|
| |
3/14/2019
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
132,670
|
| |
$24.75
|
| |
$800,064
|
|
|
|
| |
3/14/2019
|
| |
|
| |
|
| |
80,808
|
| |
96,970
|
| |
|
| |
|
| |
|
| |
$1,999,998
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
J. Michael Schlotman
|
| |
|
| |
$1,200,000(1)
|
| |
$2,400,000(1)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| |
3/14/2019
|
| |
|
| |
|
| |
72,444
|
| |
86,933
|
| |
|
| |
|
| |
|
| |
$1,792,989
|
|
(1)
|
These amounts relate to the 2019 performance-based annual cash incentive bonus plan. The amount listed under “Target” represents the annual cash incentive bonus potential of the NEO. By the terms of the plan, payouts are limited to no more than 200% of a participant’s annual cash incentive bonus potential; accordingly, the amount listed under “Maximum” is two times that officer’s annual cash incentive bonus potential amount. The amounts actually earned under this plan were paid in March 2020 and are included in the Summary Compensation Table for 2019 in the “Non-Equity Incentive Plan Compensation” column and are described in footnote 3 to that table under “Annual Cash Bonus.”
|
(2)
|
These amounts represent performance units awarded under the 2019 Long-Term Incentive Plan, which covers performance during fiscal years 2019, 2020 and 2021. The amount listed under “Maximum” represents the maximum number of common shares that can be earned by the NEO under the award or 120% of the target amount. This amount is consistent with the estimate of aggregate compensation cost to be recognized by the Company over the three-year performance period of the award determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated forfeitures. The grant date fair value reported in the last column is based on the probable outcome of the performance conditions as of the grant date. The aggregate grant date fair value of these awards is included in the Summary Compensation Table for 2019 in the “Stock Awards” column and described in footnote 1 to that table.
|
(3)
|
These amounts represent the number of shares of restricted stock granted in 2019. The aggregate grant date fair value reported in the last column is calculated in accordance with FASB ASC Topic 718. The aggregate grant date fair value of these awards is included in the Summary Compensation Table for 2019 in the “Stock Awards” column and described in footnote 1 to that table.
|
(4)
|
These amounts represent the number of stock options granted in 2019. Options are granted with an exercise price equal to the closing price of Kroger common shares on the grant date. The aggregate grant date fair value reported in the last column is calculated in accordance with FASB ASC Topic 718. The aggregate grant date fair value of these awards is included in the Summary Compensation Table for 2019 in the “Option Awards” column.
|
|
|
| |
Option Awards
|
| |
Stock Awards
|
| ||||||||||||||||||
|
Name
|
| |
Number of
Securities Underlying Unexercised Options Exercisable (#) |
| |
Number of
Securities Underlying Unexercised Options Unexercisable (#) |
| |
Option
Exercise Price ($) |
| |
Option
Expiration Date |
| |
Number
of Shares or Units of Stock That Have Not Vested (#) |
| |
Market Value
of Shares or Units of Stock That Have Not Vested ($) |
| |
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
| |
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
|
|
W. Rodney McMullen
|
| |
140,000
|
| |
—
|
| |
$10.08
|
| |
6/24/2020
|
| |
17,219(9)
|
| |
$462,502
|
| |
|
| |
|
|
|
182,880
|
| |
—
|
| |
$12.37
|
| |
6/23/2021
|
| |
40,022(10)
|
| |
$1,074,991
|
| |
|
| |
|
| |||
|
194,880
|
| |
—
|
| |
$10.98
|
| |
7/12/2022
|
| |
98,168(11)
|
| |
$2,636,792
|
| |
|
| |
|
| |||
|
194,880
|
| |
—
|
| |
$18.88
|
| |
7/15/2023
|
| |
63,321(11)
|
| |
$1,700,802
|
| |
|
| |
|
| |||
|
300,000
|
| |
—
|
| |
$24.67
|
| |
7/15/2024
|
| |
127,273(12)
|
| |
$3,418,553
|
| |
|
| |
|
| |||
|
188,332
|
| |
47,083(1)
|
| |
$38.33
|
| |
7/15/2025
|
| |
|
| |
|
| |
|
| |
|
| |||
|
214,854
|
| |
143,237(2)
|
| |
$37.48
|
| |
7/13/2026
|
| |
|
| |
|
| |
61,268(19)
|
| |
$1,754,095
|
| |||
|
229,250
|
| |
343,877(3)
|
| |
$22.92
|
| |
7/13/2027
|
| |
|
| |
|
| |
95,242(20)
|
| |
$2,737,265
|
| |||
|
87,323
|
| |
261,970(3)
|
| |
$28.05
|
| |
7/13/2028
|
| |
|
| |
|
| |
|
| |
|
| |||
|
|
| |
348,259(4)
|
| |
$24.75
|
| |
3/14/2029
|
| |
|
| |
|
| |
|
| |
|
| |||
|
Gary Millerchip
|
| |
9,600
|
| |
—
|
| |
$24.67
|
| |
7/15/2024
|
| |
1,014(9)
|
| |
$27,236
|
| |
|
| |
|
|
|
11,193
|
| |
2,799(1)
|
| |
$38.33
|
| |
7/15/2025
|
| |
3,447(10)
|
| |
$92,586
|
| |
|
| |
|
| |||
|
16,782
|
| |
11,190(2)
|
| |
$37.48
|
| |
7/13/2026
|
| |
7,671(11)
|
| |
$206,043
|
| |
|
| |
|
| |||
|
8,726
|
| |
26,179(3)
|
| |
$22.92
|
| |
7/13/2027
|
| |
16,362(13)
|
| |
$439,483
|
| |
|
| |
|
| |||
|
7,562
|
| |
22,689(3)
|
| |
$28.05
|
| |
7/13/2028
|
| |
7,795(11)
|
| |
$209,374
|
| |
|
| |
|
| |||
|
|
| |
66,335(4)
|
| |
$24.75
|
| |
3/14/2029
|
| |
24,243(12)
|
| |
$651,167
|
| |
|
| |
|
| |||
|
|
| |
16,584(5)
|
| |
$24.75
|
| |
3/14/2029
|
| |
9,091(14)
|
| |
$244,184
|
| |
|
| |
|
| |||
|
|
| |
51,116(6)
|
| |
$22.08
|
| |
7/15/2029
|
| |
23,778(15)
|
| |
$638,677
|
| |
|
| |
|
| |||
|
|
| |
—
|
| |
|
| |
|
| |
|
| |
|
| |
4,523(19)
|
| |
$129,503
|
| |||
|
|
| |
—
|
| |
|
| |
|
| |
|
| |
|
| |
18,141(20)
|
| |
$521,384
|
| |||
|
Stuart Aitken
|
| |
17,860
|
| |
4,466(1)
|
| |
$38.33
|
| |
7/15/2025
|
| |
1,618(9)
|
| |
$43,459
|
| |
|
| |
|
|
|
20,896
|
| |
13,932(2)
|
| |
$37.48
|
| |
7/13/2026
|
| |
4,281(10)
|
| |
$114,988
|
| |
|
| |
|
| |||
|
22,296
|
| |
33,446(3)
|
| |
$22.92
|
| |
7/13/2027
|
| |
10,500(11)
|
| |
$282,030
|
| |
|
| |
|
| |||
|
8,281
|
| |
24,843(3)
|
| |
$28.05
|
| |
7/13/2028
|
| |
16,362(13)
|
| |
$439,483
|
| |
|
| |
|
| |||
|
|
| |
82,919(4)
|
| |
$24.75
|
| |
3/14/2029
|
| |
9,172(11)
|
| |
$246,360
|
| |
|
| |
|
| |||
|
|
| |
16,584(5)
|
| |
$24.75
|
| |
3/14/2029
|
| |
30,304(12)
|
| |
$813,965
|
| |
|
| |
|
| |||
|
|
| |
—
|
| |
|
| |
|
| |
9,091(14)
|
| |
$244,184
|
| |
|
| |
|
| |||
|
|
| |
—
|
| |
|
| |
|
| |
|
| |
|
| |
16,673(19)
|
| |
$477,349
|
| |||
|
|
| |
—
|
| |
|
| |
|
| |
|
| |
|
| |
22,677(20)
|
| |
$651,730
|
| |||
|
Yael Cosset
|
| |
11,193
|
| |
2,799(1)
|
| |
$38.33
|
| |
7/15/2025
|
| |
1,014(9)
|
| |
$27,236
|
| |
|
| |
|
|
|
10,878
|
| |
7,252(2)
|
| |
$37.48
|
| |
7/13/2026
|
| |
2,074(10)
|
| |
$55,708
|
| |
|
| |
|
| |||
|
3,979
|
| |
2,653(7)
|
| |
$31.25
|
| |
9/15/2026
|
| |
1,280(16)
|
| |
$34,381
|
| |
|
| |
|
| |||
|
4,244
|
| |
6,367(8)
|
| |
$28.83
|
| |
3/9/2027
|
| |
3,330(17)
|
| |
$89,444
|
| |
|
| |
|
| |||
|
17,406
|
| |
26,110(3)
|
| |
$22.92
|
| |
7/13/2027
|
| |
9,163(11)
|
| |
$246,118
|
| |
|
| |
|
| |||
|
7,374
|
| |
22,125(3)
|
| |
$28.05
|
| |
7/13/2028
|
| |
16,362(13)
|
| |
$439,483
|
| |
|
| |
|
| |||
|
|
| |
66,335(4)
|
| |
$24.75
|
| |
3/14/2029
|
| |
12,033(11)
|
| |
$323,206
|
| |
|
| |
|
| |||
|
|
| |
16,584(5)
|
| |
$24.75
|
| |
3/14/2029
|
| |
24,243(12)
|
| |
$651,167
|
| |
|
| |
|
| |||
|
|
| |
—
|
| |
|
| |
|
| |
9,091(14)
|
| |
$244,184
|
| |
|
| |
|
| |||
|
|
| |
—
|
| |
|
| |
|
| |
|
| |
|
| |
4,656(19)
|
| |
$133,298
|
| |||
|
|
| |
—
|
| |
|
| |
|
| |
|
| |
|
| |
18,141(20)
|
| |
$521,384
|
| |||
|
Michael J. Donnelly
|
| |
70,720
|
| |
—
|
| |
$12.37
|
| |
6/23/2021
|
| |
5,910(9)
|
| |
$158,743
|
| |
|
| |
|
|
|
50,720
|
| |
—
|
| |
$10.98
|
| |
7/12/2022
|
| |
11,847(10)
|
| |
$318,210
|
| |
|
| |
|
| |||
|
50,720
|
| |
—
|
| |
$18.88
|
| |
7/15/2023
|
| |
29,058(11)
|
| |
$780,498
|
| |
|
| |
|
| |||
|
60,000
|
| |
—
|
| |
$24.67
|
| |
7/15/2024
|
| |
14,135(18)
|
| |
$379,666
|
| |
|
| |
|
| |||
|
47,943
|
| |
11,986(1)
|
| |
$38.33
|
| |
7/15/2025
|
| |
39,594(11)
|
| |
$1,063,495
|
| |
|
| |
|
| |||
|
62,116
|
| |
41,412(2)
|
| |
$37.48
|
| |
7/13/2026
|
| |
48,485(12)
|
| |
$1,302,307
|
| |
|
| |
|
| |||
|
66,279
|
| |
99,419(3)
|
| |
$22.92
|
| |
7/13/2027
|
| |
|
| |
|
| |
|
| |
|
| |||
|
28,364
|
| |
85,092(3)
|
| |
$28.05
|
| |
7/13/2028
|
| |
|
| |
|
| |
20,370(19)
|
| |
$583,184
|
| |||
|
|
| |
132,670(4)
|
| |
$24.75
|
| |
3/14/2029
|
| |
|
| |
|
| |
36,283(20)
|
| |
$1,042,767
|
| |||
|
J. Michael Schlotman
|
| |
91,280
|
| |
—
|
| |
$12.37
|
| |
6/23/2021
|
| |
7,722(9)
|
| |
$207,413
|
| |
|
| |
|
|
|
109,280
|
| |
—
|
| |
$18.88
|
| |
7/15/2023
|
| |
15,795(10)
|
| |
$424,254
|
| |
|
| |
|
| |||
|
80,000
|
| |
—
|
| |
$24.67
|
| |
7/15/2024
|
| |
38,742(11)
|
| |
$1,040,610
|
| |
|
| |
|
| |||
|
85,224
|
| |
21,307(1)
|
| |
$38.33
|
| |
7/15/2025
|
| |
38,891(11)
|
| |
$1,044,612
|
| |
|
| |
|
| |||
|
82,822
|
| |
55,216(2)
|
| |
$37.48
|
| |
7/13/2026
|
| |
|
| |
|
| |
|
| |
|
| |||
|
88,372
|
| |
132,558(3)
|
| |
$22.92
|
| |
7/13/2027
|
| |
|
| |
|
| |
13,376(19)
|
| |
$382,955
|
| |||
|
27,758
|
| |
83,276(3)
|
| |
$28.05
|
| |
7/13/2028
|
| |
|
| |
|
| |
10,008(20)
|
| |
$287,630
|
|
(1)
|
Stock options vest on 7/15/2020.
|
(2)
|
Stock options vest in equal amounts on 7/13/2020 and 7/13/2021.
|
(3)
|
Stock options vest in equal amounts on 7/13/2020, 7/13/2021, and 7/13/2022.
|
(4)
|
Stock options vest in equal amounts on 3/14/2020, 3/14/2021, 3/14/2022, and 3/14/2023.
|
(5)
|
Stock options vest in equal amounts on 3/14/2020, 3/14/2021, and 3/14/2022.
|
(6)
|
Stock options vest in equal amounts on 7/15/2020, 7/15/2021, 7/15/2022, and 7/15/2023.
|
(7)
|
Stock options vest in equal amounts on 9/15/2020 and 9/15/2021.
|
(8)
|
Stock options vest in equal amounts on 3/9/2020, 3/9/2021, and 3/9/2022.
|
(9)
|
Restricted stock vests on 7/15/2020.
|
(10)
|
Restricted stock vests in equal amounts on 7/13/2020 and 7/13/2021.
|
(11)
|
Restricted stock vests in equal amounts on 7/13/2020, 7/13/2021, and 7/13/2022.
|
(12)
|
Restricted stock vests in equal amounts on 3/14/2020, 3/14/2021, 3/14/2022, and 3/14/2023.
|
(13)
|
Restricted stock vests on 7/13/2020.
|
(14)
|
Restricted stock vests in equal amounts on 3/14/2020, 3/14/2021, and 3/14/2022.
|
(15)
|
Restricted stock vests in equal amounts on 7/15/2020, 7/15/2021, 7/15/2022, and 7/15/2023.
|
(16)
|
Restricted stock vests in equal amounts on 9/15/2020 and 9/15/2021.
|
(17)
|
Restricted stock vests in equal amounts on 3/9/2020, 3/9/2021, and 3/9/2022.
|
(18)
|
Restricted stock vests on 12/7/2020.
|
(19)
|
Performance units granted under the 2018 long-term incentive plan are earned as of the last day of fiscal 2020, to the extent performance conditions are achieved. Because the awards earned are not currently determinable, in accordance with SEC rules, the number of units and the corresponding market value reflect a representative amount based on performance through 2019, including cash payments equal to projected dividend equivalent payments. For Mr. Schlotman, the awards listed in the table reflect a representative amount prorated based on the number of weeks of the plan he was actively employed.
|
(20)
|
Performance units granted under the 2019 long-term incentive plan are earned as of the last day of fiscal 2021, to the extent performance conditions are achieved. Because the awards earned are not currently determinable, in accordance with SEC rules, the number of units and the corresponding market value reflect a representative amount based on performance through 2019, including cash payments equal to projected dividend equivalent payments. For Mr. Schlotman, the awards listed in the table reflect a representative amount prorated based on the number of weeks of the plan he was actively employed.
|
|
|
| |
Option Awards(1)
|
| |
Stock Awards(2)
|
| ||||||
|
Name
|
| |
Number of
Shares Acquired on Exercise (#) |
| |
Value
Realized on Exercise ($) |
| |
Number
of Shares Acquired on Vesting (#) |
| |
Value
Realized on Vesting ($) |
|
|
W. Rodney McMullen
|
| |
130,000
|
| |
$1,875,900
|
| |
188,948
|
| |
$4,688,674
|
|
|
Gary Millerchip
|
| |
—
|
| |
$—
|
| |
22,463
|
| |
$529,660
|
|
|
Stuart Aitken
|
| |
—
|
| |
$—
|
| |
25,122
|
| |
$598,127
|
|
|
Yael Cosset
|
| |
—
|
| |
$—
|
| |
24,223
|
| |
$573,505
|
|
|
Michael J. Donnelly
|
| |
40,000
|
| |
$642,959
|
| |
65,978
|
| |
$1,628,211
|
|
|
J. Michael Schlotman
|
| |
159,280
|
| |
$2,752,418
|
| |
72,762
|
| |
$2,071,866
|
|
(1)
|
Stock options have a ten-year life and expire if not exercised within that ten-year period. The value realized on exercise is the difference between the exercise price of the option and the closing price of Kroger’s common shares on the exercise date.
|
(2)
|
The Stock Awards columns include vested restricted stock and earned performance units, as follows:
|
|
|
| |
Vested Restricted Stock
|
| |
Earned Performance Units
|
| ||||||
|
Name
|
| |
Number of
Shares |
| |
Value
Realized |
| |
Number of
Shares |
| |
Value
Realized |
|
|
W. Rodney McMullen
|
| |
113,560
|
| |
$2,493,375
|
| |
75,388
|
| |
$2,195,299
|
|
|
Gary Millerchip
|
| |
17,273
|
| |
$378,527
|
| |
5,190
|
| |
$151,133
|
|
|
Stuart Aitken
|
| |
18,497
|
| |
$405,207
|
| |
6,625
|
| |
$192,920
|
|
|
Yael Cosset
|
| |
19,046
|
| |
$422,751
|
| |
5,177
|
| |
$150,754
|
|
|
Michael J. Donnelly
|
| |
46,283
|
| |
$1,054,693
|
| |
19,695
|
| |
$573,518
|
|
|
J. Michael Schlotman
|
| |
47,173
|
| |
$1,326,714
|
| |
25,589
|
| |
$745,152
|
|
|
Name
|
| |
Plan Name
|
| |
Number of
Years Credited Service (#) |
| |
Present Value of
Accumulated Benefit ($)(1) |
| |
Payments during
Last fiscal year ($) |
|
|
W. Rodney McMullen
|
| |
Pension Plan
|
| |
34
|
| |
$1,882,693
|
| |
—
|
|
|
|
| |
Excess Plan
|
| |
34
|
| |
$21,170,930
|
| |
—
|
|
|
Gary Millerchip
|
| |
Pension Plan
|
| |
|
| |
$—(2)
|
| |
—(2)
|
|
|
|
| |
Excess Plan
|
| |
|
| |
$—
|
| |
—
|
|
|
Stuart Aitken
|
| |
Pension Plan
|
| |
|
| |
$—(2)
|
| |
—(2)
|
|
|
|
| |
Excess Plan
|
| |
|
| |
$—
|
| |
—
|
|
|
Yael Cosset
|
| |
Pension Plan
|
| |
|
| |
$—(2)
|
| |
—(2)
|
|
|
|
| |
Excess Plan
|
| |
|
| |
$—
|
| |
|
|
|
Michael J. Donnelly
|
| |
Pension Plan
|
| |
40
|
| |
$1,206,264
|
| |
—
|
|
|
|
| |
Excess Plan
|
| |
40
|
| |
$9,812,413
|
| |
—
|
|
|
J. Michael Schlotman
|
| |
Pension Plan
|
| |
34
|
| |
$1,973,721
|
| |
—
|
|
|
|
| |
Excess Plan
|
| |
34
|
| |
$11,467,608
|
| |
—
|
|
(1)
|
The discount rate used to determine the present values was 3.00% for The Kroger Consolidated Retirement Benefit Plan Spin Off (the “Pension Plan”) and 3.01% for The Kroger Co. Consolidated Retirement Excess Benefit Plan (the “Excess Plan”), which are the same rates used at the measurement date for financial reporting purposes. Additional assumptions used in calculating the present values are set forth in Note 15 to the consolidated financial statements in Kroger’s 10-K for fiscal year 2019.
|
(2)
|
Messrs. Millerchip, Aitken and Cosset do not participate in the Pension Plan or the Excess Plan.
|
•
|
11∕2% times years of credited service multiplied by the average of the highest five years of total earnings (base salary and annual cash bonus) during the last ten calendar years of employment, reduced by 11∕4% times years of credited service multiplied by the primary social security benefit;
|
•
|
normal retirement age is 65;
|
•
|
unreduced benefits are payable beginning at age 62; and
|
•
|
benefits payable between ages 55 and 62 will be reduced by 1∕3 of one percent for each of the first 24 months and by 1∕2 of one percent for each of the next 60 months by which the commencement of benefits precedes age 62.
|
|
Name
|
| |
Executive Contributions
in Last FY |
| |
Aggregate Earnings
in Last FY(1) |
| |
Aggregate Balance
at Last FYE(2) |
|
|
W. Rodney McMullen
|
| |
$10,000(3)
|
| |
$715,358
|
| |
$11,288,782
|
|
|
Gary Millerchip
|
| |
—
|
| |
—
|
| |
—
|
|
|
Stuart Aitken
|
| |
—
|
| |
—
|
| |
—
|
|
|
Yael Cosset
|
| |
—
|
| |
—
|
| |
—
|
|
|
Michael J. Donnelly
|
| |
—
|
| |
$39,042
|
| |
$707,870
|
|
|
J. Michael Schlotman
|
| |
—
|
| |
—
|
| |
—
|
|
(1)
|
These amounts include the aggregate earnings on all accounts for each NEO, including any above-market or preferential earnings. The following amounts earned in 2019 are deemed to be preferential earnings and are included in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table for 2019: Mr. McMullen, $122,375; and Mr. Donnelly, $6,927.
|
(2)
|
The following amounts in the Aggregate Balance column were reported in the Summary Compensation Tables covering fiscal years 2006 – 2018: Mr. McMullen, $3,273,221; and Mr. Donnelly, $238,872.
|
(3)
|
This amount includes the deferral of $10,000 of his salary in fiscal 2019; this amount is included in the “Salary” column of the Summary Compensation Table for 2019.
|
•
|
a lump sum severance payment equal to up to 24 months of the participant’s annual base salary and target annual bonus potential;
|
•
|
a lump sum payment equal to the participant’s accrued and unpaid vacation, including banked vacation;
|
•
|
continued medical and dental benefits for up to 24 months and continued group term life insurance coverage for up to 6 months; and
|
•
|
up to $10,000 as reimbursement for eligible outplacement expenses.
|
|
Triggering Event
|
| |
Stock Options
|
| |
Restricted Stock
|
| |
Performance Units
|
| |
Performance-Based
Long-Term Cash Bonus |
|
|
Involuntary
Termination |
| |
Forfeit all unvested options. Previously vested options remain exercisable for the shorter of one year after termination or the remainder of the original 10-year term.
|
| |
Forfeit all unvested shares
|
| |
Forfeit all rights to units for which the three-year performance period has not ended
|
| |
Forfeit all rights to long-term cash bonuses for which the three-year performance period has not ended
|
|
|
Voluntary
Termination/ Retirement - Prior to minimum age and five years of service(1) |
| |
Forfeit all unvested options. Previously vested options remain exercisable for the shorter of one year after termination or the remainder of the original 10-year term.
|
| |
Forfeit all unvested shares
|
| |
Forfeit all rights to units for which the three-year performance period has not ended
|
| |
Forfeit all rights to long-term cash bonuses for which the three-year performance period has not ended
|
|
|
Voluntary
Termination/ Retirement - After minimum age and five years of service(1) |
| |
Unvested options held greater than 1 year continue vesting on the original schedule. All options are exercisable for remainder of the original 10-year term.
|
| |
Unvested shares held greater than 1 year continue vesting on the original schedule
|
| |
Pro rata portion(2) of units earned based on performance results over the full three-year period
|
| |
Pro rata portion(2) of long-term cash bonuses earned based on performance results over the full three-year period
|
|
|
Triggering Event
|
| |
Stock Options
|
| |
Restricted Stock
|
| |
Performance Units
|
| |
Performance-Based
Long-Term Cash Bonus |
|
|
Death
|
| |
Unvested options are immediately vested. All options are exercisable for the remainder of the original 10-year term.
|
| |
Unvested shares immediately vest
|
| |
Pro rata portion(2) of units earned based on performance results through the end of the fiscal year in which death occurs. Award will be paid following the end of such fiscal year.
|
| |
Pro rata portion(2) of long-term cash bonuses earned based on performance results through the end of the fiscal year in which death occurs. Award will be paid following the end of such fiscal year.
|
|
|
Disability
|
| |
Unvested options are immediately vested. All options are exercisable for remainder of the original 10-year term.
|
| |
Unvested shares immediately vest
|
| |
Pro rata portion(2) of units earned based on performance results over the full three-year period
|
| |
Pro rata portion(2) of long-term cash bonuses earned based on performance results over the full three-year period
|
|
|
Change in
Control(3) - For awards prior to March 2019 |
| |
Unvested options are immediately vested and exercisable.
|
| |
Unvested shares immediately vest.
|
| |
50% of the units granted at the beginning of the performance period earned immediately
|
| |
50% of the bonus granted at the beginning of the performance period earned immediately
|
|
|
Change in
Control(4) - For awards in March 2019 and thereafter |
| |
Unvested options only vest and become exercisable upon an actual or constructive termination of employment within 2 years following a change in control.
|
| |
Unvested shares only vest upon an actual or constructive termination of employment within 2 years following a change in control.
|
| |
50% of the units granted at the beginning of the performance period earned upon an actual or constructive termination of employment within 2 years following a change in control.
|
| |
Not applicable
|
|
(1)
|
The minimum age requirement is age 62 for stock options and restricted stock and age 55 for performance units and the long-term cash bonus.
|
(2)
|
The prorated amount is equal to the number of weeks of active employment during the performance period divided by the total number of weeks in the performance period.
|
(3)
|
These benefits are payable upon a change in control of Kroger, as defined in the applicable agreement, with or without a termination of employment.
|
(4)
|
These benefits are payable upon an actual or constructive termination of employment within two years after a change in control, as defined in the applicable agreements.
|
|
Name
|
| |
Involuntary
Termination |
| |
Voluntary
Termination/ Retirement |
| |
Death
|
| |
Disability
|
| |
Change
in Control without Termination |
| |
Change in
Control with Termination |
|
|
W. Rodney McMullen
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Accrued and Banked Vacation
|
| |
$653,934
|
| |
$653,934
|
| |
$653,934
|
| |
$653,934
|
| |
$653,934
|
| |
$653,934
|
|
|
Severance
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
7,631,808
|
|
|
Continued Health and Welfare Benefits(1)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
32,653
|
|
|
Stock Options(2)
|
| |
0
|
| |
0
|
| |
2,089,702
|
| |
2,089,702
|
| |
1,354,875
|
| |
2,089,702
|
|
|
Restricted Stock(3)
|
| |
0
|
| |
0
|
| |
9,293,641
|
| |
9,293,641
|
| |
5,875,088
|
| |
9,293,641
|
|
|
Performance Units(4)
|
| |
0
|
| |
1,949,837
|
| |
1,949,837
|
| |
1,949,837
|
| |
1,260,070
|
| |
4,108,855
|
|
|
Long-Term Cash Bonus(5)
|
| |
0
|
| |
1,145,710
|
| |
1,145,710
|
| |
1,145,710
|
| |
1,315,900
|
| |
1,315,900
|
|
|
Executive Group Life Insurance
|
| |
—
|
| |
—
|
| |
1,973,850
|
| |
—
|
| |
—
|
| |
—
|
|
|
Gary Millerchip
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Accrued and Banked Vacation
|
| |
$3,846
|
| |
$3,846
|
| |
$3,846
|
| |
$3,846
|
| |
$3,846
|
| |
$3,846
|
|
|
Severance
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
1,837,500
|
|
|
Continued Health and Welfare Benefits(1)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
48,166
|
|
|
Stock Options(2)
|
| |
0
|
| |
0
|
| |
522,439
|
| |
522,439
|
| |
103,145
|
| |
522,439
|
|
|
Restricted Stock(3)
|
| |
0
|
| |
0
|
| |
2,508,751
|
| |
2,508,751
|
| |
974,723
|
| |
2,508,751
|
|
|
Performance Units(4)
|
| |
0
|
| |
0
|
| |
243,424
|
| |
243,424
|
| |
93,030
|
| |
635,655
|
|
|
Long-Term Cash Bonus(5)
|
| |
0
|
| |
0
|
| |
141,483
|
| |
141,483
|
| |
162,500
|
| |
162,500
|
|
|
Executive Group Life Insurance
|
| |
—
|
| |
—
|
| |
750,000
|
| |
—
|
| |
—
|
| |
—
|
|
|
Stuart Aitken
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Accrued and Banked Vacation
|
| |
$6,346
|
| |
$6,346
|
| |
$6,346
|
| |
$6,346
|
| |
$6,346
|
| |
$6,346
|
|
|
Severance
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
2,795,848
|
|
|
Continued Health and Welfare Benefits(1)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
48,913
|
|
|
Stock Options(2)
|
| |
0
|
| |
0
|
| |
341,729
|
| |
341,729
|
| |
131,777
|
| |
341,729
|
|
|
Restricted Stock(3)
|
| |
0
|
| |
0
|
| |
2,184,470
|
| |
2,184,470
|
| |
1,126,320
|
| |
2,184,470
|
|
|
Performance Units(4)
|
| |
0
|
| |
0
|
| |
501,591
|
| |
501,591
|
| |
342,908
|
| |
1,021,190
|
|
|
Long-Term Cash Bonus(5)
|
| |
0
|
| |
0
|
| |
311,786
|
| |
311,786
|
| |
358,100
|
| |
358,100
|
|
|
Executive Group Life Insurance
|
| |
—
|
| |
—
|
| |
1,237,500
|
| |
—
|
| |
—
|
| |
—
|
|
|
Yael Cosset
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Accrued and Banked Vacation
|
| |
$5,038
|
| |
$5,038
|
| |
$5,038
|
| |
$5,038
|
| |
$5,038
|
| |
$5,038
|
|
|
Severance
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
2,209,174
|
|
|
Continued Health and Welfare Benefits(1)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
36,213
|
|
|
Stock Options(2)
|
| |
0
|
| |
0
|
| |
277,832
|
| |
277,832
|
| |
102,873
|
| |
277,832
|
|
|
Restricted Stock(3)
|
| |
0
|
| |
0
|
| |
2,110,927
|
| |
2,110,927
|
| |
1,215,576
|
| |
2,110,927
|
|
|
Performance Units(4)
|
| |
0
|
| |
0
|
| |
245,797
|
| |
245,797
|
| |
95,756
|
| |
638,382
|
|
|
Long-Term Cash Bonus(5)
|
| |
0
|
| |
0
|
| |
230,465
|
| |
230,465
|
| |
264,700
|
| |
264,700
|
|
|
Executive Group Life Insurance
|
| |
—
|
| |
—
|
| |
982,500
|
| |
—
|
| |
—
|
| |
—
|
|
|
Michael J. Donnelly
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Accrued and Banked Vacation
|
| |
$174,144
|
| |
$174,144
|
| |
$174,144
|
| |
$174,144
|
| |
$174,144
|
| |
$174,144
|
|
|
Severance
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
4,260,000
|
|
|
Continued Health and Welfare Benefits(1)
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
—
|
| |
15,831
|
|
|
Stock Options(2)
|
| |
0
|
| |
0
|
| |
671,645
|
| |
671,645
|
| |
391,711
|
| |
671,645
|
|
|
Restricted Stock(3)
|
| |
0
|
| |
0
|
| |
4,002,919
|
| |
4,002,919
|
| |
2,700,612
|
| |
4,002,919
|
|
|
Performance Units(4)
|
| |
0
|
| |
689,605
|
| |
689,605
|
| |
689,605
|
| |
418,935
|
| |
1,504,187
|
|
|
Long-Term Cash Bonus(5)
|
| |
0
|
| |
380,917
|
| |
380,917
|
| |
380,917
|
| |
437,500
|
| |
437,500
|
|
|
Executive Group Life Insurance
|
| |
—
|
| |
—
|
| |
1,395,000
|
| |
—
|
| |
—
|
| |
—
|
|
(1)
|
Represents the aggregate present value of continued participation in the Company’s medical, dental and executive term life insurance plans, based on the premiums payable by the Company during the eligible period. The eligible period for continued medical and dental benefits is based on the level and length of service, which is 24 months for all NEOs. The eligible period for continued executive term life insurance coverage is six months for the NEOs. The amounts reported may ultimately be lower if the NEO is no longer eligible to receive benefits, which could occur upon obtaining other employment and becoming eligible for substantially equivalent benefits through the new employer.
|
(2)
|
Amounts reported in the death, disability and change in control columns represent the intrinsic value of the accelerated vesting of unvested stock options, calculated as the difference between the exercise price of the stock option and the closing price per Kroger common share on January 31, 2020. A value of $0 is attributed to stock options with an exercise price greater than the market price on the last day of the fiscal year. In accordance with SEC rules, no amount is reported in the voluntary termination/retirement column because vesting is not accelerated, but the options may continue to vest on the original schedule if the conditions described above are met.
|
(3)
|
Amounts reported in the death, disability and change in control columns represent the aggregate value of the accelerated vesting of unvested restricted stock. In accordance with SEC rules, no amount is reported in the voluntary termination/retirement column because vesting is not accelerated, but the restricted stock may continue to vest on the original schedule if the conditions described above are met.
|
(4)
|
Amounts reported in the voluntary termination/retirement, death and disability columns represent the aggregate value of the performance units granted in 2018 and 2019, based on performance through the last day of fiscal 2019 and prorated for the portion of the performance period completed. Amounts reported in the change in control column represent the aggregate value of 50% of the maximum number of performance units granted in 2018 and 2019. Awards under the 2017 Long-Term Incentive Plan were earned as of the last day of 2019 so each NEO age 55 or over was entitled to receive (regardless of the triggering event) the amount actually earned, which is reported in the Stock Awards column of the 2019 Option Exercises and Stock Vested Table.
|
(5)
|
Amounts reported in the voluntary termination/retirement, death and disability columns represent the aggregate value of the long-term cash bonuses granted in 2018, based on performance through the last day of fiscal 2019 and prorated for the portion of the performance period completed. Amounts reported in the change in control column represent the aggregate value of 50% of the long-term cash bonus potentials under the 2018 Long-Term Incentive Plan. Awards under the 2017 Long-Term Incentive Plan were earned as of the last day of 2019, so each NEO age 55 or over was entitled to receive (regardless of the triggering event) the amount actually earned, which is reported in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table for 2019.
|
•
|
A significant portion of pay should be performance-based, with the percentage of total pay tied to performance increasing proportionally with an executive’s level of responsibility;
|
•
|
Compensation should include incentive-based pay to drive performance, providing superior pay for superior performance, including both a short- and long-term focus;
|
•
|
Compensation policies should include an opportunity for, and a requirement of, equity ownership to align the interests of executives and shareholders; and
|
•
|
Components of compensation should be tied to an evaluation of business and individual performance measured against metrics that directly drive our business strategy.
|
•
|
Reviews PricewaterhouseCoopers LLP’s independence and performance;
|
•
|
Considers the tenure of the independent registered public accounting firm and safeguards around auditor independence;
|
•
|
Reviews, in advance, all non-audit services provided by PricewaterhouseCoopers LLP, specifically with regard to the effect on the firm’s independence;
|
•
|
Conducts an annual assessment of PricewaterhouseCoopers LLP’s performance, including an internal survey of their service quality by members of management and the Audit Committee;
|
•
|
Conducts regular executive sessions with PricewaterhouseCoopers LLP;
|
•
|
Conducts regular executive sessions with the Vice President of Internal Audit;
|
•
|
Considers PricewaterhouseCoopers LLP’s familiarity with our operations, businesses, accounting policies and practices and internal control over financial reporting;
|
•
|
Reviews candidates for the lead engagement partner in conjunction with the mandated rotation of the public accountants’ lead engagement partner;
|
•
|
Reviews recent Public Company Accounting Oversight Board reports on PricewaterhouseCoopers LLP and its peer firms; and
|
•
|
Obtains and reviews a report from PricewaterhouseCoopers LLP describing all relationships between the independent auditor and Kroger at least annually to assess the independence of the internal auditor.
|
|
|
| |
Fiscal Year Ended
|
| |||
|
|
| |
February 1,
2020 |
| |
February 2,
2019 |
|
|
Audit Fees(1)
|
| |
$5,153,885
|
| |
$5,067,485
|
|
|
Audit-Related Fees(2)
|
| |
$0
|
| |
$1,110,870
|
|
|
All Other Fees(3)
|
| |
$900
|
| |
900
|
|
|
Total
|
| |
$5,154,785
|
| |
$6,179,255
|
|
(1)
|
Includes annual audit and quarterly reviews of Kroger’s consolidated financial statements, the issuance of comfort letters to underwriters, consents, and assistance with review of documents filed with the SEC.
|
(2)
|
Includes fees related to audit services in connection with the carve-out for the sale of the c-stores from the financial statements, lease pre-implementation procedures, and divestiture due diligence.
|
(3)
|
Includes use of accounting research tool.
|
•
|
Met separately with the Company’s internal auditor and PricewaterhouseCoopers LLP with and without management present to discuss the results of the audits, their evaluation and management’s assessment of the effectiveness of Kroger’s internal controls over financial reporting and the overall quality of the Company’s financial reporting;
|
•
|
Met separately with the Company’s Chief Financial Officer or the Company’s General Counsel when needed;
|
•
|
Met regularly in executive sessions;
|
•
|
Reviewed and discussed with management the audited financial statements included in our Annual Report;
|
•
|
Discussed with PricewaterhouseCoopers LLP the matters required to be discussed under the applicable requirements of the Public Company Accounting Oversight Board and the SEC; and
|
•
|
Received the written disclosures and the letter from PricewaterhouseCoopers LLP required by the applicable requirements of the Public Accounting Oversight Board regarding the independent public accountant’s communication with the Audit Committee concerning independence and discussed the matters related to their independence.
|
•
|
Improving the recyclability of plastic packaging and achieving 20% recycled content in packaging for Kroger manufactured products -- which also helps drive demand for recycled materials;
|
•
|
Increasing communication with our customers about recyclability and helping expand recycling infrastructure because we cannot solve this problem alone;
|
•
|
Increasing responsible fiber sourcing in paper packaging; and
|
•
|
Reducing plastic in Our Brands packaging by 10 million pounds.
|
•
|
Kroger achieved 10.1 million pounds of reduced plastic in our manufactured plastic packaging since 2015 – achieving our goal well ahead of schedule – with additional improvements planned for 2020.
|
•
|
We added post-consumer recycled (PCR) content to multiple plastic packaging items, including dairy products, bakery and produce products, which helps create demand for recycling markets. As examples, in 2019, we added 25% PCR content into two buttermilk products, up to 40% PCR in pie containers, and up to 20% PCR in several cake and cookie containers – all of which we produce in our own Manufacturing plants.
|
•
|
We raised awareness of our in-store plastic film collection and recycling program, which accepts a wide variety of plastic films not currently accepted in curbside recycling programs, like plastic grocery bags, produce bags, bread bags, and plastic overwrap on household tissues, diapers and bottled water. Kroger will pilot new recycling programs for harder-to-recycle items in 2020 in order to give customers additional resources to help reduce plastic waste in the environment.
|
•
|
We added ‘Please Recycle’ to additional product packages – for a total of more than 3,000 items showing this message. We are also in the process of joining the How2Recycle program so that we can provide widely adopted recycling instructions for Our Brands products moving forward.
|
•
|
Kroger joined the U.S. Chamber of Commerce Foundation’s Beyond 34 initiative, which is aimed at finding scalable solutions to increase the national recycling rate (currently 34%). As a Champion of the second pilot, hosted in Cincinnati, our home city, Kroger is playing a key role in evaluating waste reduction and recovery opportunities that can potentially benefit our company-wide operations.
|
•
|
The majority of paper packaging items used in Kroger’s Manufacturing plants include recycled content and/or is certified to a responsible forestry standard. We also developed a Deforestation Commitment for Raw Material Sourcing (https://www.thekrogerco.com/wp-content/uploads/2020/02/Kroger-Deforestation-Commitment_Raw-Material-Sourcing_Final.pdf), which includes a commitment regarding paper packaging used in our plants.
|
•
|
The human rights principles used to frame its risk assessments;
|
•
|
The human rights impacts of Kroger's business activities, including company-owned operations and supply chain, and plans to mitigate adverse impacts;
|
•
|
The types and extent of stakeholder consultation; and
|
•
|
The company's plans to track effectiveness of measures to assess, prevent, mitigate, and remedy adverse human rights impacts.
|
•
|
Our Statement on Human Rights (https://www.thekrogerco.com/wp-content/uploads/2018/07/TheKrogerCo_Statement-on-Human-Rights_2018-July.pdf) articulates what we stand for regarding human rights. Protecting human rights is embedded in our company governance and culture. We expect to publish an expanded statement in 2020, specifically addressing some key topics of concern like recruitment fees, which can lead to workers becoming indebted to employers as a result of paying fees for employment.
|
1
|
https://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf
|
2
|
https://www.fm-magazine.com/issues/2016/dec/human-rights-risks-in-supply-chain.html
|
3
|
https://www.nytimes.com/2014/06/22/opinion/sunday/thai-seafood-is-contaminated-by-human-trafficking.html
|
4
|
https://www.wsj.com/articles/palm-oil-migrant-workers-tell-of-abuses-on-malaysian-plantations-1437933321
|
5
|
https://cnn.com/2017/05/30/world/ciw-fair-food-program-freedom-project/index.html
|
6
|
See, e.g., https://www.bizjournals.com/cincinnati/news/2019/08/16/p-g-faces-criticism-for-buying-palm-oil-allegedly.html; https://nowtoronto.com/news/chocolate-child-labour-slavery-hersheys/; https://www.theguardian.com/environment/2019/oct/05/tesco-m-and-s-supermarkets-likely-to-have-soya-linked-to-deforestation-supply-chains
|
7
|
https://www.dol.gov/sites/dolgov/files/ILAB/ListofGoods.pdf.
|
•
|
Our Vendor Code of Conduct (https://www.thekrogerco.com/wp-content/uploads/2017/09/code-of-conduct.pdf) defines our expectations of our suppliers regarding protecting human rights in our supply chain. All suppliers are required to agree to this code of conduct in order to do business with Kroger.
|
•
|
Our Social Compliance Program, described in our Social Compliance Program Requirements (https://www.thekrogerco.com/wp-content/uploads/2018/07/The-Kroger-Co._Social-Compliance-Program_2018-July-1.pdf) and described in detail in our annual Environmental, Social & Governance report (http://sustainability.kroger.com/products-supply-chain-accountability.html) is our framework for ensuring Kroger suppliers are upholding our Vendor Code of Conduct.
|
•
|
We have a zero-tolerance policy for human rights violations reported through our social compliance program audits or other means. Addressing violations includes documented corrective action plan(s) and corresponding improvements. Failure to complete the corrective action plan(s) within the agreed-upon timeline can result in termination of the supply contract. Through this management approach to supply chain accountability, a limited number of supplier contracts are terminated each year for failure to comply with our Vendor Code of Conduct and/or correct zero tolerance and other violations in a timely manner.
|
•
|
Our Ethics Hotline phone number can be used anonymously by internal and external parties to report any potential human rights violations or other misconduct in our operations or supply chain. The Ethics Hotline is listed in our corporate policies—including our Statement on Human Rights and Vendor Code of Conduct, both available on Kroger’s website: https://www.thekrogerco.com/newsroom/statements-policies/—and on posters at Kroger facilities.
|
•
|
Our work in this area is overseen by Kroger’s Vice President, Chief Ethics & Compliance Officer, Group Vice President of Corporate Affairs, Senior Vice President of Human Resources, Vice President of Sourcing, and Head of Sustainability. This ensures that every part of our business is clear about the responsibility to respect human rights. Board-level oversight is provided by the Audit Committee and Public Responsibilities Committee of The Kroger Co. Board of Directors.
|
•
|
To determine the scope of the vendors and facilities that are to be audited in our Social Compliance Program and how often, Kroger evaluates our supplier base against multiple criteria, such as where facilities are located, what products they produce and documented industry risks. We also use risk indicators such as the United Nations Human Development Index, the U.S. State Department Trafficking in Persons Report and The World Bank Worldwide Governance Indicators.
|
•
|
In addition, Kroger’s social compliance team plans to begin in 2020 a risk assessment initiative with ELEVATE, Kroger’s primary social compliance audit company, to better understand social risks in the supply chain. Results from this process will be used to refine our auditing approach.
|
•
|
Kroger carefully reviews other social certification standards and auditing requirements to identify cases where Kroger can adopt another standard as a proxy for our own social compliance audits, which allows us to redistribute Kroger auditing capacity to more suppliers.
|
•
|
Our social compliance team conducts multiple site visits with our suppliers around the globe to witness working conditions first-hand, and to ensure our audit protocols are being effectively implemented. In 2019, Kroger visited several general merchandise and seafood suppliers across Asia as well as produce suppliers in Mexico and South America.
|
•
|
We also conduct engagements with stakeholders such as investors, research groups and NGOs, and we benchmark peer companies to ensure we are incorporating best practices in our approach. In fact, Kroger has actively participated with other produce buyers in a working group aimed at encouraging implementation of the PMA/United Fresh-sponsored Ethical Charter – a universal code of conduct to protect human rights in the produce supply chain.
|
•
|
Kroger supports the communities from which we source through our initiative to provide Fair Trade-certified products to our customers. Annually, we purchase more than 17 million pounds of Fair Trade-certified
|
•
|
In early 2020, we are updating our environmental, social and governance materiality assessment—originally conducted in early 2018 and shared in our 2018 Sustainability Report (http://sustainability.kroger.com/Kroger_CSR2018.pdf)—to ensure we are capturing relevant stakeholder perspectives in our reporting and approach to sustainability. We anticipate findings from the ongoing assessment will be reflected in our 2020 Environmental, Social & Governance report.
|
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