CINCINNATI — The pay package that the nation's largest grocery chain, Kroger Co., gave CEO David Dillon in 2009 plunged nearly 19 percent from the year before as competition for recession-squeezed shoppers cut profit and sales growth, according to figures in a Friday regulatory filing.
Dillon's largely performance-related compensation for 2009 was valued at $6.71 million, an Associated Press analysis of the Cincinnati-based company's annual proxy filing with the Securities and Exchange Commission showed. That's down from $8.25 million in 2008.
Dillon, 59, is a native of Hutchinson. He started working in his family's Dillon Cos. grocery chain after college and joined Kroger after it acquired Dillon. He became CEO in 2003 and was elected chairman in 2004.
The filing shows Dillon's annual salary rose nearly 3 percent to $1.24 million, but his performance-based bonus fell nearly 22 percent to $1.23 million from $1.57 million in 2008. Kroger's executive compensation committee said in the filing that the company missed its growth targets for sales and profit.
The value of his stock and option awards fell more than 23 percent to $4.06 million from $5.31 million. Dillon received perks worth $172,430, including $99,247 for life insurance.
Kroger has said it's focused on building loyalty among financially strapped shoppers in the recession, counting on them to keep coming back when better economic days arrive. The company has given up some profit margins with promotions and sales to combat a broad range of competitors that include other supermarket chains, warehouse clubs and dollar stores.
Kroger's profit fell sharply, to $70 million, or 11 cents a share, in 2009. It was hurt by a $1.05 billion charge the company took in the third quarter to reflect the drop in value of its Ralphs division in California. In 2008, Kroger reported profit of $1.25 billion, or $1.89 a share.
Revenue rose only about 1 percent, to $76.7 billion. Sales at stores open at least 15 months rose 2.3 percent, the filing said, missing a goal of growth between 4 and 5 percent.
Kroger's annual shareholders meeting is set for June 24 in Cincinnati.
The company operates nearly 2,500 grocery stores in 31 states.