Local unions group seeks ouster of Kroger CEO after $7.5 billion buyback plan
2:12 pm Friday, December 13th, 2024
(Reuters) -Some United Food and Commercial Workers (UFCW) local unions on Friday urged Kroger’s board to replace CEO Rodney McMullen following the company’s announcement of a $7.5 billion stock buyback plan after terminating a deal to buy Albertsons.
The UFCW local unions that led the “Stop the Merger coalition” argued that the “abrupt” and “massive” share repurchase program comes at a time when Kroger needs investments in staffing, repairs and store remodels.
Kroger and Albertsons terminated their $25-billion merger plan on Wednesday after a U.S. judge blocked the deal. Albertsons then filed a lawsuit against Kroger, alleging a breach of contract that led to the deal’s demise.
Kroger announced a new repurchase program later on Wednesday and said it intends to enter an accelerated share buyback program of about $5 billion of common stock.
“It is outrageous that Rodney McMullen would try to distract attention from his multiple failures as CEO by announcing a massive one-time giveaway to shareholders,” said Kim Cordova, president of UFCW Local 7 in Colorado and Wyoming.
“Statements from UFCW locals leaders, who are in the midst of CBA (collective bargaining agreement) negotiations, mischaracterize Kroger’s actions and intent,” Kroger spokesperson said.
Since Kroger has terminated the merger agreement, the company is in a position to resume share repurchases which was paused since the merger agreement in 2022, the company spokesperson added.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Pooja Desai and Shailesh Kuber)
