Have you ever wondered about the financial scale of leadership at one of America's largest grocery chains?
It's a question that piques the curiosity of many – just how much does the CEO of Kroger make in a year? Understanding executive compensation isn't just about a single number; it's about delving into a complex structure of salary, bonuses, stock awards, and performance incentives. Let's break down the layers of compensation for Kroger's top executive.
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| How Much Does The Ceo Of Kroger Make A Year |
Step 1: Pinpointing the Latest Compensation Figures
The most reliable source for CEO compensation is a company's proxy statement, filed annually with the U.S. Securities and Exchange Commission (SEC). These public documents detail the compensation of a company's highest-paid executives.
For fiscal year 2024, Rodney McMullen, who served as the Chairman and CEO of Kroger Co. until his resignation in March 2025, was paid $15.6 million. This figure represents his total compensation package for that fiscal year. It's important to note that this was slightly down from his 2023 compensation of $15.7 million. Following his resignation, Ronald Sargent was named interim CEO with an annualized base salary of $4.35 million.
Step 2: Deconstructing the Compensation Package
A CEO's annual income is rarely a straightforward salary. It's typically a multi-faceted package designed to align the executive's interests with those of the shareholders. Here's a breakdown of the components that made up Mr. McMullen's 2024 compensation:
Sub-heading: Base Salary
The base salary is the fixed portion of the CEO's compensation. For fiscal year 2024, Rodney McMullen's base salary was just over $1.4 million. While a significant sum, it's often a relatively small percentage of the total compensation.
Sub-heading: Stock Awards and Options
This is where a substantial portion of CEO compensation lies. Stock awards and options incentivize long-term performance and growth. In 2024, Mr. McMullen received $10.6 million in stock options, an increase from slightly over $10 million in 2023. This component is designed to fluctuate with the company's stock performance, directly linking the CEO's personal wealth to the company's market value.
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Sub-heading: Bonuses and Incentive Compensation
These are performance-based payments tied to specific company goals and metrics. Interestingly, in 2024, Rodney McMullen did not receive an incentive payment due to his resignation. In contrast, in fiscal year 2023, his bonus was significantly lower than the prior year, contributing to the overall decrease in his total compensation for that year. This demonstrates how performance directly impacts this portion of the pay.
Sub-heading: Other Compensation
This category can include a variety of benefits, such as retirement contributions, perquisites (like personal use of company aircraft or car allowances), and other miscellaneous benefits. For Mr. McMullen in 2024, this amounted to $740,723.
Step 3: Understanding the Factors Influencing CEO Pay
CEO compensation is not arbitrary; it's determined by a complex set of factors and a rigorous process.
Sub-heading: Company Performance
This is arguably the most significant factor. Executive compensation plans are often tied to metrics like:
Identical Sales Growth (excluding fuel): This measures the sales performance of existing stores, indicating underlying business health. Kroger reported 1.5% identical sales growth (excluding fuel) for fiscal 2024.
Adjusted Operating Profit: This indicates the company's profitability from its core operations.
Earnings Per Share (EPS): A key measure of a company's profitability per share of its outstanding common stock.
Total Shareholder Return (TSR): This measures the overall return an investor receives from holding a company's stock, including stock price appreciation and dividends. Kroger's shares rose by more than a third during Mr. McMullen's final fiscal year.
When Kroger's performance weakens, as it did in fiscal year 2023, the CEO's pay often decreases due to lower incentive payouts. Conversely, strong performance can lead to significant increases in bonuses and stock awards.
Sub-heading: Industry Benchmarking
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Kroger's Compensation Committee, responsible for setting executive pay, looks at the compensation packages of CEOs at comparable publicly traded companies. This includes other large retailers like Albertsons, Costco, Target, and Walmart, ensuring that Kroger's compensation remains competitive within the industry to attract and retain top talent.
Sub-heading: Board of Directors and Compensation Committee Oversight
The Compensation Committee, a subset of the Board of Directors, is responsible for designing and approving executive compensation programs. They often engage independent compensation consultants to provide expert advice and ensure that the compensation structure is fair, competitive, and aligns with shareholder interests. They also consider factors like the company's long-term strategy and risk management.
Sub-heading: Shareholder Scrutiny and Say-on-Pay
Public companies are subject to "Say-on-Pay" votes, where shareholders have the opportunity to cast an advisory vote on executive compensation. While these votes are non-binding, they provide important feedback to the Board and can influence future compensation decisions.
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Step 4: The CEO-to-Median Employee Pay Ratio
Public companies are required to disclose the ratio of their CEO's total compensation to the median annual total compensation of all other employees. This provides a stark comparison and often sparks public debate.
For fiscal year 2024, Kroger reported that the ratio between Rodney McMullen's pay and the annual total pay of its median associate was 457-to-1. This means the CEO earned 457 times more than the median Kroger employee. The median pay for a Kroger associate rose from $31,302 in 2023 to $34,213 in 2024, an increase of about 9%. This ratio highlights the significant disparity in earnings within large corporations.
Step 5: The Evolving Landscape of CEO Compensation
Executive compensation is a dynamic field, constantly under scrutiny from shareholders, regulators, and the public. Trends in corporate governance, increasing focus on ESG (Environmental, Social, and Governance) factors, and demands for greater transparency all play a role in shaping how CEOs are compensated.
The resignation of Rodney McMullen in March 2025, following a board investigation into his personal conduct, also highlights the importance of ethics and personal conduct as factors that can significantly impact a CEO's tenure and, consequently, their compensation. While the details of the investigation were not fully disclosed, it underscores that performance isn't solely financial.
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As Kroger searches for a permanent CEO, it will be interesting to observe how the compensation structure evolves and what new metrics or incentives might be introduced to reflect the company's future strategic direction.
Frequently Asked Questions about Kroger CEO Compensation:
How to find current Kroger CEO's salary?
To find the most current Kroger CEO's salary, you would refer to the company's most recent annual proxy statement (DEF 14A filing) with the U.S. Securities and Exchange Commission (SEC), typically released in the spring.
How to interpret a CEO's total compensation package?
A CEO's total compensation package is typically comprised of a base salary, annual cash bonuses, long-term incentive awards (like stock options and restricted stock units), and other benefits and perquisites. It represents the total value of their compensation for a given fiscal year.
How to understand the "Say-on-Pay" vote for executive compensation?
"Say-on-Pay" is an advisory vote that shareholders cast on a company's executive compensation plans. While it's non-binding, a low approval rating can signal shareholder dissatisfaction and prompt the board to review and potentially revise compensation policies.
How to calculate the CEO-to-median employee pay ratio?
The CEO-to-median employee pay ratio is calculated by dividing the total compensation of the CEO by the total annual compensation of the company's median employee. This median is determined by identifying the employee whose compensation falls in the middle of the entire employee population (excluding the CEO).
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How to determine if a CEO's pay is justified?
Justifying CEO pay is complex and often debated. It involves evaluating company performance against industry peers, considering the complexity and size of the organization, assessing the CEO's strategic contributions, and analyzing the structure of their incentives to ensure alignment with long-term shareholder value.
How to find historical Kroger CEO compensation data?
Historical compensation data for Kroger's CEO can be found in the company's archived proxy statements available on the SEC's EDGAR database or on Kroger's investor relations website.
How to understand the role of stock awards in CEO compensation?
Stock awards are a significant component because they tie a CEO's wealth directly to the company's stock performance. This incentivizes them to make decisions that will increase shareholder value, as the value of their awards will rise with the stock price.
How to compare Kroger CEO compensation to other retail CEOs?
To compare, you would look up the total compensation packages for CEOs of other major retail companies (e.g., Walmart, Target, Costco) in their respective proxy statements for the same fiscal year. This allows for a direct comparison of their pay structures and overall compensation levels.
How to understand performance metrics used for CEO bonuses?
Performance metrics for CEO bonuses typically include financial targets like identical sales growth, operating profit, and earnings per share, as well as strategic goals like market share gains, digital sales growth, or successful merger integrations.
How to know if a new Kroger CEO's salary will be different?
A new Kroger CEO's salary and overall compensation package might differ based on several factors, including their prior experience, the current market for executive talent, and the specific strategic objectives the board sets for the new leader. The interim CEO, Ronald Sargent, has an annualized base salary of $4.35 million, which is higher than the previous CEO's base salary, but his overall compensation structure might differ significantly.
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