(Reuters) – Some local United Food and Commercial Workers (UFCW) unions on Friday urged Kroger’s board to replace CEO Rodney McMullen after the company announced a $7.5 billion stock buyback plan after finalizing its deal to buy Albertsons.
The local UFCW union that led the “Stop the Merger Coalition” claimed the “surprise” and “massive” stock buyback program comes at a time when Kroger needs investments in hiring, repairs and remodeling of stores.
Kroger and Albertsons ended their $25 billion merger plan on Wednesday after a US judge blocked the deal. Albertsons then sued Kroger, alleging breach of contract that led to the demise of the deal.
Kroger announced a new buyback program later Wednesday and said it intends to enter into an accelerated stock buyback program for approximately $5 billion of common stock.
“It is disgraceful that Rodney McMullen is trying 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 local UFCW leaders, who are in the midst of CBA (collective bargaining agreement) negotiations, mischaracterize Kroger’s actions and intentions,” a Kroger spokesperson said.
Since Kroger terminated the merger agreement, the company is in a position to resume stock repurchases that were 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)