8-K: Kroger Appoints David Kennerley as New CFO, Todd Foley to Retire After Transition

Kroger Co. announces David Kennerley as the incoming CFO, succeeding Todd Foley, who will retire after a transition period.

Summary

• The Kroger Co. has appointed David Kennerley as Senior Vice President and Chief Financial Officer, effective April 3, 2025.
• Kennerley will join Kroger on March 10, 2025, as Senior Vice President.
• Todd Foley, the interim CFO, will remain in his role until April 3, 2025, and then continue as Senior Vice President to support the company until his retirement at the end of the first quarter.
• Kennerley's compensation includes an $800,000 annual base salary, an $800,000 annual incentive bonus target, a $1.35 million one-time cash bonus, and a $2.8 million restricted share grant.
• He is also eligible for an annual long-term equity grant and performance unit equity awards with a total target value of $3.1 million.
• Foley joined Kroger in 2001 and has held various positions, including interim CFO in 2024.

Sentiment

Score: 8

Explanation: The announcement is positive, detailing a planned and orderly transition of a key executive role. The incoming CFO has a strong background, and the outgoing CFO is assisting with the transition.

Positives

• Kroger has a clear succession plan in place for the CFO role.
• David Kennerley brings extensive experience from PepsiCo, including international finance leadership.
• Todd Foley will assist with the transition, ensuring continuity.
• Kennerley's compensation package is designed to incentivize performance and long-term value creation.

Risks

• The transition period could present challenges if not managed effectively.
• Integration of a new CFO always carries some risk.
• Forward-looking statements are subject to various uncertainties and risk factors as detailed in Kroger's SEC filings.

Future Outlook

The company anticipates a seamless transition between the outgoing and incoming CFOs, ensuring continued execution of its go-to-market strategy and long-term shareholder value creation.

Management Comments

• Rodney McMullen, Kroger's chairman and CEO, stated that David and Todd will transition seamlessly to ensure Kroger continues to deliver on its go-to-market strategy.
• McMullen thanked Todd Foley for his contributions and commitment to his fellow associates.
• McMullen said they look forward to welcoming David to the Kroger team.
• Kennerley said he's thrilled to be joining Kroger at this exciting time for the business.

Industry Context

Succession planning is a common practice among large corporations like Kroger to ensure stability and continuity in leadership. Hiring from companies like PepsiCo is not unusual, as they often have well-developed finance leadership.

Comparison to Industry Standards

• CFO compensation packages at companies of Kroger's size typically include a mix of base salary, bonus, equity grants, and other benefits.
• PepsiCo, where Kennerley previously worked, is known for its strong financial management and leadership development programs.
• Succession planning is a standard practice among large publicly traded companies to ensure a smooth transition of leadership roles.

Management Changes

Stakeholder Impact

• Shareholders: The announcement aims to reassure investors of a smooth transition and continued financial leadership.
• Employees: The transition may impact the finance team and other departments, requiring adaptation to a new leader.
• Customers: The change in CFO is not expected to directly impact customers.
• Suppliers: The change in CFO is not expected to directly impact suppliers.

Next Steps

• David Kennerley will join Kroger on March 10, 2025.
• Todd Foley will continue as interim CFO until April 3, 2025.
• David Kennerley will assume the role of CFO on April 3, 2025.
• Todd Foley will retire at the end of the first quarter.

Key Dates