Supervalu, Inc.—which recently announced plans to appoint a new chief executive following a $3.3 billion deal to sell off several of its brands—will pay outgoing CEO Wayne Sales nearly $13 million in so-called “golden parachute” payments.
Supervalu, which has struggled recently and said in July that it had begun exploring “strategic alternatives,” announced earlier this month that it reached a deal with New York-based private investment firm Cerberus Capital Management.
Under the terms of the deal, Cerberus, along with a group of real estate firms, will buy 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. Cerberus also plans to buy up to a 30 percent stake in the rest of the company.
When announcing the transaction, Supervalu said that Sam Duncan, a retail veteran who most recently led Illinois-based OfficeMax, will replace Sales as CEO following the close of the deal, which the company expects to occur during the first quarter of this year.
Supervalu disclosed in a recent filing with the U.S. Securities and Exchange Commission (SEC) that Sales will be awarded a golden parachute package valued at $12.8 million, including $8.09 million in cash. Sales’ contract entitles him to such payments in the event that he is terminated “without cause,” as will occur when the recently announced deal with Cerberus is completed.
Sales, who has served as a Supervalu director since 2006, has led the company as CEO for only about six months. He replaced ousted leader Craig Herkert last summer.
Aside from Sales, other Supervalu executives will also be entitled to golden parachute payments if they are terminated following the close of the deal, according to the SEC filing. The company’s top-ranking leaders who would be entitled to such payments are: Janel Haugarth, president of independent business and business optimization, who would receive a package valued at $3.6 million; Sherry Smith, executive vice president and chief financial officer, who would net $3.5 million; and J. Andrew Herring, executive vice president of real estate, market development, and legal, who would receive $2.8 million.
By including those executives in the SEC filing, Supervalu is not indicating that those leaders will be terminated following the Cerberus deal, but rather outlining what would happen if they did lose their jobs, Supervalu spokesman Mike Siemienas told Twin Cities Business. The company has thus far only announced that Sales will be replaced.
The SEC filing that outlined Supervalu’s golden parachute payments also reiterated the terms of Duncan’s compensation; he will receive a $500,000 signing bonus and a $1.5 million annual salary.