Kroger investors will consider 'living wage' and other measures

Kroger shareholders at their annual meeting Thursday will be asked to consider measures urging the company to pay workers more money and pay more attention to the environmental impact, effects of selling the tobacco and charitable causes that benefit from the grocer’s help.

In addition to routine measures to elect board members and a business update from CEO Rodney McMullen during the virtual online event, activist investors submitted the following four non-binding measures to shareholders.

Kroger asked to pay a “living wage”

LGIM America, a Chicago-based investment firm, wants Kroger to implement policies aimed at paying a living wage. The company notes that the company’s average hourly wage of $18 in 2023 was below the rate of $25, suggested by a popular index maintained by the Massachusetts Institute of Technology as necessary to cover necessities. The group noted that women and minorities can be disproportionately affected by poor pay policies.

“Such inequalities and disparities harm the economy as a whole,” the company said in a proxy statement setting out the meeting’s agenda. “By underpaying so many of its employees, Kroger may believe it will increase its margins and therefore its financial performance. But corporate profit gains that come at the expense of society and the economy are a bad deal for shareholders of companies that are diversified and rely on broad economic growth to achieve their financial goals.”

Kroger said its board opposed the move, noting that the company had already increased its employees’ wages and planned to continue to do so in the future. He said the current average hourly wage is $19 an hour, while benefits and other benefits put it closer to $25 an hour. He also adds that Kroger workers are largely represented by unions.

The retailer said it has spent $2.4 billion to raise wages by more than 33% over the past five years, which has outpaced inflation.

“Kroger is proud to be an employer with a culture of opportunity and advancement,” the company said. “People from all backgrounds can come and look for a job and discover… a career. »

Retailer is asked to list charitable contributions

The Louis B. & Diana R. Eichhold Trust wants Kroger to list all recipients of charitable contributions of $10,000 or more.

“Corporate philanthropic giving should be given as much visibility as possible, lest their expected impact on goodwill be diminished,” the fund said in the proxy statement. “Feedback from employees, shareholders and customers could help guide the company’s future charitable giving process.” »

The company’s board of directors opposes the move, pointing out that the company already discloses its contributions through its two nonprofit foundations, The Kroger Co. Foundation and The Kroger Co. Zero Hunger | Zero Waste Foundation. Many of the company’s charitable efforts aim to combat hunger, with more than 114 million pounds of food donated last year.

“The Company provides substantial public reporting on grantmaking to nonprofit foundations,” the company said in its proxy statement. “We do not make charitable donations to individuals, political campaigns, sectarian or religious organizations for projects that serve only their own members or supporters, or to discriminatory organizations.”

Impact of tobacco sales requested

The Sisters of St. Francis of Philadelphia want Kroger to file a report on the public health costs generated by the sale of tobacco products.

“Kroger is undermining its commitments to health promotion and, ultimately, the interests of its diverse shareholders by failing to disclose social and environmental costs and risks,” the nonprofit said. profit in the proxy solicitation circular. “A report would help shareholders determine whether these externalized costs and the economic harm they may create ultimately serve their interests. »

Kroger’s board said in the proxy statement that it opposed the move, emphasizing that the company’s sales practices comply with the law and that the grocer respects consumers’ “freedom of choice.” clients. The company also added that it would not be “reasonable or practicable given the resources and expertise required” to produce such a report.

“Kroger takes the responsibility of selling tobacco products very seriously,” the company said. “We recognize our responsibility as a company to support our communities and help families make it easier for them to live healthier lives. We also believe in freedom of choice for our customers, and adult customers can choose to purchase tobacco products with a full understanding of the potential health impacts.

Group wants ‘just transition’ report on environmental efforts

Domini Impact Equity Fund wants Kroger to produce a “just transition” report, revealing the company’s impact on climate change and protecting workers in its agricultural supply chain.

“A ‘just transition’ (report) is increasingly recognized as an important element of climate action to meet the needs, priorities and realities of society while mitigating climate change,” the fund said. in New York in the power of attorney.

Kroger said its board opposed the move, noting that it had “robust disclosure practices” and “well-established responsible supply chain programs.” He added that “just transition” methodologies are new and still evolving.

“The company already provides robust annual reporting on topics related to sustainability and social impact,” its response states.