Supervalu's short-term CEO leaves with 12.8M
Jan 26, 2013 (Star Tribune (Menafn - Minneapolis) - McClatchy-Tribune Information Services via COMTEX) --When the dust settles on Supervalu Inc.'s 3.3 billion deal with Cerberus Capital Management, the embattled grocer's chief executive will exit with 12.8 million for about eight months of work.
Wayne Sales' "golden parachute" was disclosed Friday in a federal securities filing in connection with the deal announced earlier this month. Cerberus is buying Supervalu's four largest supermarket chains, and it plans to purchase up to 30 percent of Supervalu's stock at 4 a share.
Sales was hired last July when former CEO Craig Herkert was terminated abruptly. Sales will leave the Eden Prairie-based company after the Cerberus deal closes, which is expected before March 31.
Sales had been the nonexecutive chairman of Supervalu's board when he was hired as CEO on a two-year contract. Under his agreement, salary and cash bonuses, as well as stock awards, due through those two years are accelerated if there is a "change of control" at Supervalu.
Since that is expected to happen with Cerberus' new ownership stake, Sales will receive 8.1 million in cash and 4.7 million in equity compensation, according to a securities filing. The cash payments include his annual salary of 1.5 million, pro-rated through July 28, 2014. (Supervalu's fiscal years end in February.) Sales also will get his "target bonus" of 1.5 million for Supervalu's 2014 fiscal year.
When he steps aside, Sales will be succeeded by Cerberus' own choice as chief executive -- Samuel Duncan, the former CEO of OfficeMax and Shopko.
Supervalu has been in a tailspin the past few years, battered by lower-priced competitors and weakened by the legacy of a blockbuster 2006 deal for several large grocery chains. That deal was essentially unwound by the deal with Cerberus.
By July, Supervalu's stock was trading below 3, a low not seen in at least 30 years. The company put itself up for sale in July, and soon thereafter, the board fired Herkert, who had been CEO since May 2009.
Sales is the retired CEO of Canadian Tire, one of Canada's largest retailers. As Supervalu's new CEO, he was granted a base salary that was 650,000 more than Herkert's base pay of 850,000.
Duncan, the new CEO also will get 1.5 million in base annual salary, though he will preside over a smaller company that will produce roughly half of the revenues it once did when Herkert ran it. And it is likely to be shedding more employees after rounds of layoffs.
With Supervalu selling its Albertsons, Jewel, Acme and Shaw's chains, less corporate support staff is likely to be needed. The "remaining" Supervalu can reduce corporate overhead by about 30 percent, according to a recent report by Karen Short, an analyst at BMO Capital Markets.
Mike Hughlett -- 612-673-7003
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