(Reuters) -Kroger said on Monday Chief Executive Officer Rodney McMullen has stepped down from the role after a board investigation found that his personal conduct was inconsistent with the grocer's “policy on business ethics”.
On February 21, the board was made aware of certain personal conduct by McMullen and immediately retained outside independent counsel to conduct an investigation, which was overseen by a special board committee. Kroger's shares were down 1% before the bell.
The surprise ouster move comes a few months after the supermarket chain terminated its $25 billion merger plan for Albertsons, with the smaller rival suing Kroger and alleging a breach of contract that led to the deal's demise.
McMullen's conduct is not related to the company's financial performance, operations or reporting, and it did not involve any Kroger associates, it said in a statement.
Kroger declined to provide any additional comment on details of the exit of McMullen — who was its CEO for more than 10 years and has been at the company since 1978 — and the nature of the conduct that led to his ouster.
The board has appointed lead director Ronald Sargent as interim CEO, effective immediately. Mark Sutton will be Kroger's lead independent director.
Kroger said the board has also formed a search committee and appointed a firm to conduct a search for its next CEO.
The company, scheduled to report its fourth-quarter results on Thursday, said McMullen would not be eligible to receive a bonus payout for 2024.
Kroger expects full-year adjusted earnings per share to be slightly above the high end of its forecast range.
(Reporting by Savyata Mishra in Bengaluru; Editing by Shilpi Majumdar)
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