Photo courtesy of Supervalu
New Supervalu CEO Sam Duncan
Struggling Supervalu, which recently struck a deal to sell several of its brands, said that its new CEO will start immediately rather than assuming his post after the close of the sale, as was previously planned.
February 4, 2013
Sam Duncan has joined Supervalu, Inc., as president and CEO earlier than planned.
Eden Prairie-based Supervalu announced Monday that Duncan is assuming his positions immediately, rather than after the close of the company’s planned $3.3 billion deal to sell several of its brands.
The grocery giant said in January that it struck a deal to sell five of its largest retail grocery brands
to an investor group led by New York-based Cerberus Capital Management, L.P. Cerberus also plans to buy up to a 30 percent stake in the rest of the company.
The company also announced at the time that, following the close of the transaction, Duncan would replace Wayne Sales, who became Supervalu’s president and CEO last year
. But Supervalu said Monday that its board decided to move up Duncan’s start date so that he can “immediately start refining and, where appropriate, implement his plans for the business.”
Sales will remain chairman of the board until the sale is complete, which is expected to occur during the week of March 18. Once the deal closes, Robert Miller—president and CEO of Albertsons, LLC, one of the grocery chains that Supervalu is selling—will become chairman of Supervalu’s board. It has not yet been determined whether Sales will remain on the board following the sale, according to Supervalu spokesman Mike Siemienas.
Duncan previously served as chairman, president, and CEO of Naperville, Illinois-based OfficeMax. Before that, he was president and CEO of ShopKo Stores. Earlier in his career, Duncan held several positions in the grocery industry, including roles at Albertsons; Fred Meyer, a division of Kroger; and Ralph’s Supermarket, a large food retailer in California.
According to regulatory documents, Duncan will receive a $500,000 signing bonus and a $1.5 million annual salary
. In addition, he will be eligible to earn performance-based cash bonuses each year, worth up to twice the amount of his $1.5 million salary. He’ll also be granted stock options to acquire 1.5 million shares of Supervalu’s common stock with an exercise price equal to the closing price of the stock on the grant date.
Duncan will lead a much smaller Supervalu than Sales did. Under the terms of the sale, the company will sell 877 stores under the Albertsons, Acme, Jewel-Osco, Shaw’s, and Star Market banners, as well as the associated Osco and Sav-on in-store pharmacies. It will retain its wholesale business; its discount brand Save-A-Lot, which has about 1,300 stores; and its regional grocery brands Farm Fresh, Shoppers, Shop ‘n Save, Hornbacher’s, and Cub Foods, which serves the Twin Cities area. Following the sale, Supervalu expects to generate about $17 billion in annual revenue—roughly half of the $36.1 billion it reported in its most recently completed fiscal year. It is currently the fourth-largest public company in Minnesota
based on revenue.
Last year, Supervalu closed stores and cut jobs in a major turnaround effort and began exploring “strategic alternatives,”
including a possible sale.
Duncan said in a statement that he is “excited to start putting in place plans to improve our results and increase shareholder value.”
Shares of the company’s stock closed Monday at $3.88—down 1.3 percent.