(Reuters) -Some local United Food and Commercial Workers (UFCW) unions urged Kroger’s board on Friday to replace CEO Rodney McMullen, following the company’s announcement of a $7.5 billion post-employment stock buyback plan of a deal to buy Albertsons.
The local UFCW unions leading the Stop the Merger coalition argued that the “abrupt” and “massive” stock buyback program comes at a time when Kroger needs investments in staff, repairs and store renovations.
Kroger and Albertsons ended their $25 billion merger plan on Wednesday after a US judge blocked the deal. Albertsons then filed a lawsuit against Kroger, alleging breach of contract that led to the demise of the deal.
Kroger announced a new buyback program later on Wednesday and said it plans to participate in an accelerated share repurchase program of approximately $5 billion of common stock.
“It is outrageous that Rodney McMullen would try to distract from his many 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 share repurchases, which had been suspended since the merger agreement in 2022, the company spokesperson added.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Pooja Desai and Shailesh Kuber)