Kroger Co. CEO Rodney McMullen resigned abruptly on Monday following an internal investigation into his personal conduct, which the company said was "inconsistent" with its ethics policies. The grocery retailer did not disclose specifics of the probe but confirmed that McMullen's behavior was unrelated to Kroger's "financial performance, operations or reporting," nor did it involve any company employees.
The board appointed Ronald Sargent, a Kroger director since 2006, as interim CEO while it searches for a permanent replacement. "As interim CEO, I am committed to working alongside our proven and experienced management team and dedicated associates to ensure Kroger continues providing exceptional value for our customers," Sargent said in a company statement.
McMullen, who had been with Kroger for nearly five decades, started as a part-time stock clerk in 1978 and ascended through the ranks, serving as chief financial officer before being appointed CEO in 2014. His departure comes at a turbulent time for the grocery giant, which recently scrapped its proposed $25 billion merger with rival Albertsons amid regulatory challenges.
Albertsons has since sued Kroger, accusing it of breaching their merger agreement by failing to take sufficient steps to gain regulatory approval. The lawsuit claims Kroger did not exercise its "best efforts" to push the deal forward, despite initial commitments.
McMullen's resignation followed an independent counsel's review, which began after Kroger's board became aware of the alleged misconduct on February 21. While the company has assured investors that the matter does not impact business operations, Kroger shares fell about 1% in premarket trading following the announcement.
