Doug Rauch

About Doug Rauch

Independent director at Sprouts Farmers Market since 2020; age 73; currently serves on the Audit Committee and chaired the committee during fiscal 2024 before leadership passed to Hari Avula effective at the beginning of fiscal 2025 . Career includes 30 years at Trader Joe’s (division and then company president 1995–2008), founder and President of Daily Table (since June 2012), and founding board member/CEO of Conscious Capitalism, Inc. (board through 2021; currently emeritus) . He brings 35+ years of grocery operating expertise with emphasis on strategy and sustainability .

Past Roles

External Roles

No related‑party transactions disclosed for Mr. Rauch with SFM in the last three fiscal years; the only disclosed related‑party transaction involved a director (Avula) and Guayakí Yerba Mate purchases; Mr. Avula had no direct or indirect interest in those purchases .

Board Governance

• Independence: Board determined Mr. Rauch is independent under SEC and Nasdaq rules .
• Classification/tenure: Class I director; term expires at the 2026 annual meeting; director since 2020 .
• Committees: Audit Committee member; served as Audit Chair in FY2024; Mr. Avula appointed Chair effective beginning of FY2025 .
• Attendance and engagement:
  • Board held 6 formal meetings in FY2024; each director attended at least 75% of Board and committee meetings during their service .
  • Each director attended the 2024 virtual annual meeting of stockholders .
  • Independent directors hold executive sessions at each formal Board meeting .
  • Audit Committee held 4 meetings in FY2024 .
• Audit Committee qualifications: Board designated Anderson and Avula as “audit committee financial experts”; all members (including Rauch) can read and understand fundamental financial statements .

Fixed Compensation (Director Pay – FY2024)

Director compensation program structure (FY2024):

• Cash: $75,000 annual retainer; $10,000 per committee; Audit Chair +$25,000; other chair roles +$20,000; Board Chair +$90,000; payable quarterly .
• Equity: $160,000 in RSUs (annual), Board Chair extra $60,000; RSUs vest on 1‑year anniversary; directors could elect to receive all/part of cash retainer in RSUs; RSU count based on 20‑day trailing average price on grant date .
• 2025 changes: Cash retainer increased to $90,000; annual equity to $170,000; Board Chair cash retainer to $100,000 to align near peer median (Meridian advised) .

Performance Compensation

Sprouts’ director equity awards are time‑based RSUs; proxy does not disclose use of performance metrics for director pay .

Other Directorships & Interlocks

Expertise & Qualifications

• 35+ years grocery industry operating experience; strategic implementation and leadership; sustainability in operations .
• Audit oversight experience as prior Audit Committee Chair (FY2024) .

Equity Ownership

Insider Trades (Form 4 activity – 2023–2025)

Pattern: consistent annual RSU awards with intermittent open‑market sales and gifts; holdings remained in the ~8–12k share range across 2024–2025 after transactions [Form 4 URLs above].

Director Compensation Program Notes (Context)

• Independent compensation consultant: Meridian Compensation Partners; 2024 review led to 2025 increases to align with peer median .
• Election to receive cash retainer as RSUs: Rauch elected $30,000 in RSUs for FY2024, increasing equity alignment .
• RSU vesting: one‑year cliff; simple, time‑based structure for directors .

Governance Assessment

• Strengths

  • Independent director with deep grocery operations background; strategic and sustainability expertise aligned with SFM’s format .
  • Audit leadership experience (Audit Chair in FY2024); committee independence and active audit cadence (4 meetings) support financial oversight .
  • Engagement indicators: at least 75% meeting attendance; attended the 2024 annual meeting; independent‑only executive sessions each formal Board meeting .
  • Ownership alignment: beneficial ownership of 8,247 shares as of 3/24/2025; ability to convert cash retainers into RSUs (Rauch elected $30,000) and director stock ownership guidelines (≥5× retainer within five years) .

• Watch items

  • Not designated as an “audit committee financial expert” (others on the committee, Anderson and Avula, hold that designation) .
  • Regular, modest insider sales and gifts in 2024–2025; while not unusual for directors, continued monitoring advised given strong stock appreciation (sales at ~$62 to ~$167) [Form 4 URLs above; 2024–2025 entries].
  • 2025 director pay increases (cash and equity) to peer‑median targets are reasonable but represent higher fixed costs; continue to assess pay‑for‑role vs company performance and workload (committees, meetings) .

• Conflicts/related‑party exposure

  • No related‑party transactions disclosed for Rauch; the sole related‑party transaction disclosed involved another director (Avula) and Guayakí purchases; Avula had no direct/indirect interest .
  • Insider trading policy prohibits hedging/pledging without CLO approval; no pledging disclosed for Rauch .

Appendix: Additional Board Structure and Independence

• Board composition: 7 of 8 directors independent; average age 64; average tenure 7.6 years .
• Classified board (Class I/II/III); proposal to phase to one‑year terms if approved, fully declassified by 2028 annual meeting .