Kroger approves corporate governance development

10 Dec '05

2 min read

Cincinnati based The Kroger Co announced a set of corporate governance enhancements.

At a meeting, Kroger's board of directors voted to recommend that shareholders approve the declassification of the board, in tandem with the elimination of cumulative voting, at the next annual meeting in June 2006.

If shareholders approve the proposals, directors with terms expiring in 2006 and subsequent years will be elected to one-year terms so that by 2008, all directors will be elected annually.

The board also recommended that shareholders approve:

·The elimination of the 75 Percent supermajority requirement necessary to engage in certain transactions with shareholders owning 10 Percent or more of the Company's shares; and

·The opting out of the Ohio control share acquisition statute, which requires shareholder approval of proposed acquisitions of 20 Percent or more of the voting power of the Company.

“These important enhancements reflect Kroger's commitment to upholding the highest standards of corporate governance as best practices continue to evolve,” said David B. Dillon, Kroger Chairman and Chief Executive Officer.

Kroger's board also adopted several other changes to the corporate governance guidelines.

These changes include:

·“Poison Pill” – Kroger's board will allow the Company's warrant dividend plan to expire March 19, 2006.

·Executive Severance – Kroger's board has adopted a policy that requires shareholder approval for any new severance arrangements with senior executives that would exceed 2.99 times average annual W-2 earnings over the prior five years.

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