Ron Sargent
KROGERAbout Ron Sargent
Ronald L. Sargent is Chairman and Interim CEO of The Kroger Co. (appointed March 2, 2025), previously serving as Lead Director since 2017 and a director since 2006 . He was Chairman and CEO of Staples, Inc., where he was employed from 1989 until his retirement in 2017, and earlier spent 10 years at Kroger in various roles, bringing deep retail operations and e-commerce expertise . Current external directorships include Wells Fargo & Company (Chair of Human Resources Committee) and Five Below, Inc. (Nominating & Corporate Governance Committee); he also serves on the board of City of Hope and is Chairman of the John F. Kennedy Library Foundation . Kroger’s recent performance context: fiscal 2024 identical sales excluding fuel grew 1.5% and adjusted FIFO operating profit including fuel was $4.7 billion, with annual bonus payout at 108.7% and the 2022–2024 LTIP paying 69.4% based on iTSR and sales metrics .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Staples, Inc. | Chairman & CEO | 1989–2017 | Helped carve out a new market niche for the international retailer |
| The Kroger Co. | Various positions | 10 years (prior to 1989) | Foundational retail operations experience; consumer insights and e-commerce relevant to current strategy |
External Roles
| Organization | Role | Years | Committee/Focus | Strategic Impact |
|---|---|---|---|---|
| Wells Fargo & Company | Director; Chair, Human Resources Committee | Current | Human capital management, risk, culture, ethics | Governance depth and HCM oversight experience |
| Five Below, Inc. | Director; Nominating & Corporate Governance Committee | Current | Corporate citizenship; social & environmental governance | Governance and sustainability perspective |
| City of Hope | Director | Current | Board service | Community and mission-oriented leadership |
| John F. Kennedy Library Foundation | Chairman of the Board | Current | Board leadership | Nonprofit board leadership and governance |
Fixed Compensation
| Component | Amount | Notes |
|---|---|---|
| 2024 Director Cash Fees | $173,958 | Included $105,000 base retainer and $40,000 Lead Director retainer (plus any committee fees if applicable) |
| 2024 Director Stock Award | $198,577 (3,810 incentive shares granted July 15, 2024) | Aggregate grant-date fair value per FASB ASC 718 |
| 2024 Change in Pension Value/Deferred Comp (Director) | $6,280 | Preferential earnings per proxy methodology |
| 2024 Director Total | $378,815 | Sum of cash, stock awards, and deferred comp earnings |
| 2024 Director Annual Retainer (policy) | $105,000 | Independent directors |
| Lead Director Additional Retainer (policy) | $40,000 | Lead Director |
| Annual Director Equity Grant (policy) | ~ $200,000 value | Incentive shares annually |
Note: Executive compensation as Interim CEO in 2025 is not covered in the fiscal 2024 CD&A; 2024 CEO pay refers to former CEO W. Rodney McMullen .
Performance Compensation
Annual Incentive (2024)
| Metric | Target Framework | Actual | Payout | Notes |
|---|---|---|---|---|
| Identical Sales, excl. Fuel | Grid with thresholds and payouts | 1.5% | 98.7% | Measured enterprise-wide ID sales |
| Adjusted FIFO Operating Profit, incl. Fuel | Grid thresholds from $4.509B to ≥$5.309B | $4.7B | See grid interpolation | Operating profitability focus |
| Composite Score Kicker | Thresholds on store composite scores | Achieved | +10% | Operational excellence customer experience measure |
| Total Annual Payout | — | — | 108.7% | Committee-reviewed results |
Long-Term Incentive Plan (LTIP) 2022–2024 Results
| Metric | Target | Actual | Weight | Payout |
|---|---|---|---|---|
| Adjusted Total Sales without Fuel + Fuel Gallons | $139.8B | $137.6B | 25% | 72.4% |
| Value Creation (iTSR = EPS growth + dividend yield) | 11% | 8.9% | 50% | 78.6% |
| Fresh Equity Metric | 46.1 | 43.0 | 25% | 0% |
| Payout Before TSR Modifier | — | — | — | 57.4% |
| Relative TSR Modifier vs S&P 500 | 50th–75th percentile grid | Rank 145th (2nd quartile) | — | 121.0% multiplier |
| Final LTIP Payout | — | — | — | 69.4% |
LTIP design for 2023–2025 and 2024–2026 retains the same three metrics with a relative TSR modifier, max payout 187.5% when metrics and TSR are at maximums .
Equity Ownership & Alignment
| Item | Value | Notes |
|---|---|---|
| Beneficial Ownership (as of Apr 28, 2025) | 252,312 shares | Includes deferred incentive shares under director plan (66,886) |
| Shares Outstanding (as of Apr 28, 2025) | 665,853,060 | Basis for ownership % |
| Ownership % (computed) | ~0.038% (252,312 / 665,853,060) | No individual director/officer ≥1% ownership per proxy |
| Hedging/Pledging | Prohibited for directors/executive officers | Policy bans hedging, pledging, and short sales |
| Director Ownership Guideline | 5x annual base cash retainer | Applies to all independent directors |
| 2024 Director Retainer | $105,000 | Guideline multiple equates to $525,000 |
| Illustrative Compliance Value | 252,312 shares × $61.64 = ~$15.56M (using Jan 31, 2025 close) | Exceeds 5x retainer requirement (analysis based on disclosed price and share count) |
Director deferral program allows deferral of cash fees and incentive shares; Sargent’s deferred incentive shares total 66,886 . Company bans hedging/pledging, lowering alignment risk .
Employment Terms
| Topic | Key Terms | Notes |
|---|---|---|
| Change-in-Control (KEPP) | Double-trigger; severance up to 24 months base salary + target annual incentive; continued medical/dental up to 24 months; life insurance 6 months; up to $10,000 outplacement; potential 280G cutback to maximize after-tax | Applies to management associates (incl. NEOs) with ≥1 year of service; Board may amend/terminate KEPP prior to a change-in-control |
| Equity Awards (post-CIC) | Double-trigger: options/restricted stock vest only upon actual/constructive termination within 2 years after CIC; 50% of performance units earned upon qualifying termination within 2 years post-CIC | Awards since March 2019 follow double-trigger design |
| Clawbacks | NYSE/Exchange Act 10D-compliant recoupment for accounting restatements (3-year lookback); additional recoupment for material errors; award-level forfeiture/recoupment for cause or violations | Administered by the Compensation Committee |
| Trading Policy | Insider trading policy; prohibition on hedging, pledging, short sales | Governance guardrails |
| Deferred Compensation (Directors) | Deferral of up to 100% of cash fees and all incentive shares; cash deferrals accrue interest or track phantom stock; share deferrals delivered 6 months post-separation | Distribution options per plan |
Board Governance
- Board service history: Director since 2006, Lead Director since 2017, appointed Chairman and Interim CEO March 2025; as CEO he is not independent .
- Committees: All five committees are fully independent; CEO does not serve on committees; Mark S. Sutton serves as Chair of Corporate Governance Committee and Lead Independent Director (appointed March 2025) .
- Dual-role mitigation: Independent Lead Director with defined responsibilities (agenda setting, executive sessions, CEO evaluation, shareholder engagement) provides governance counterbalance to combined CEO/Chairman structure .
- Attendance: Board held nine meetings in fiscal 2024; all incumbent directors attended at least 75% of Board/committee meetings; all attended the annual meeting .
- Hedging/pledging prohibition; robust code of ethics and shareholder rights (e.g., special meeting rights, proxy access) .
Director Compensation
| Component | Amount | Structure |
|---|---|---|
| Annual Cash Retainer | $105,000 | Plus incremental retainers: Lead Director $40,000; Audit Committee members $10,000; Audit Chair $25,000; other Committee Chairs $20,000 |
| Annual Equity Grant | ~ $200,000 incentive shares (e.g., 3,810 shares on July 15, 2024 with $198,577 fair value) | FASB ASC 718 valuation |
| Nonqualified Deferred Comp | Optional deferral of cash fees and incentive shares; phantom stock/interest accruals | Distribution post-separation |
Compensation Structure Analysis
- Majority of executive pay at-risk: 92% CEO target pay and 84% average NEO pay at-risk in 2024, with bonuses paid 108.7% and 2022–2024 LTIP paying 69.4% (discipline against windfalls) .
- Metrics align to value creation: Annual plan uses ID sales and adjusted FIFO operating profit plus an operational “Composite Score” kicker; LTIP uses Adjusted Sales, iTSR (EPS growth + dividend yield), Fresh equity metric, with relative TSR modifier .
- Governance safeguards: Double-trigger CIC, robust clawback, ban on hedging/pledging, no tax gross-ups, no option repricing without shareholder approval .
- Peer group benchmarking: Committee targets median CEO pay versus peers (Albertsons, Costco, Walmart, CVS, etc.); peer median revenue $106B vs Kroger $147B in 2024 .
Say-on-Pay & Shareholder Feedback
| Item | Result | Notes |
|---|---|---|
| 2024 Say-on-Pay Approval | ~91% “For” | Shareholders cited appreciation for pay-for-performance design |
| Shareholder Engagement | Reached out to 33 holders (61% of shares), met 21 (24% of shares) | Ongoing governance dialogue |
Equity Ownership & Pledging Risk Indicators
- Beneficial ownership: 252,312 shares; none of the directors/officers own ≥1%; directors/executive officers as a group own 0.4% of outstanding shares; Sargent’s deferred incentive shares total 66,886 .
- Hedging/pledging: Explicit prohibition for directors and executive officers reduces alignment and margin-call risks .
Expertise & Qualifications
- Retail, consumer, and e-commerce leadership; governance and HCM committee experience across major public boards (Wells Fargo, Five Below) .
- Age 69; broad operations and technology qualifications; recognized for governance, risk management, and business management competencies .
Employment Terms & Contracts
- No individual executive employment contract is disclosed; severance/change-in-control defined by KEPP and award agreements with double-trigger mechanics and prorated LTIP treatment per retirement/termination conditions .
Investment Implications
- Alignment strong: Large personal stake, ownership guideline well exceeded, and bans on hedging/pledging point to reduced forced-selling risk and improved shareholder alignment .
- Pay-for-performance rigor: 2024 results produced modest above-target annual payout and below-target LTIP payout, signaling disciplined calibration of targets and metrics; investors should track 2025/2026 LTIP progress under the current leadership .
- Governance mitigants to dual role: Combined CEO/Chair during interim period is counterbalanced by an empowered Lead Independent Director and fully independent committees, reducing independence concerns during transition .
- Bandwidth watch: Interim CEO continues to serve on two public boards, within policy limits; monitor time allocation and succession timeline for execution risk in a dynamic competitive environment .