Retention bonuses set for Rite Aid execs if Albertsons deal falls through
The odds are good that Rite Aid Corp. and Albertsons Cos. will complete a planned $24 billion merger this summer.
And after the Cumberland County-based drugstore chain and Idaho-based supermarket chain complete the deal, Rite Aid chairman and CEO John Standley is expected to lead the new parent company, which would be known as Albertsons Cos. Inc.
However, if shareholders reject the merger, Standley and other top Rite Aid executives are still poised to receive a retention bonus on top of their regular compensation, according to an amended annual report filed by the company on Friday.
By not being appointed CEO of the new company, Standley could earn a retention payment of $3 million. His total compensation for fiscal year 2018, which ended March 3, was $9.3 million, according to the annual report.
Rite Aid also set retention payments for four other executives under Standley. Collectively, those payments total about $2.9 million. Kermit Crawford, the company's president and COO, could get $1 million; Darren Karst, senior executive vice president, CFO and chief administrative officer, could get $830,250; Bryan Everett, COO of Rite Aid Stores, could get $600,000; and Jocelyn Konrad, executive vice president of pharmacy, could get $450,000.
Crawford's total compensation last year was $5.4 million, while Karst earned nearly $4 million. Everett finished at nearly $3 million and Konrad received $1.4 million. In addition to base salaries, total compensation for executives includes annual stock awards, cash incentive bonuses and retirement benefits, as well as other compensation such as automobile allowances.
A Rite Aid spokeswoman did not immediately respond to questions about the possible retention payments and whether the company would be at risk of losing its top executives without those agreements.
In its annual report, Rite Aid said the retention agreements were put in place this year to improve employee retention and promote corporate performance amidst "significant volatility and uncertainty related to restructuring the company." Much of that uncertainty was driven by the prolonged Walgreens merger attempt, which took nearly two years, and the separate store deal with Walgreens that followed the failed merger.
Rite Aid has not yet set a date for a special meeting of shareholders to vote on the Albertsons merger. Company officials have said they expect the meeting will occur in July.
The merger would combine about 2,600 Rite Aid stores with about 2,300 stores Albertsons owns across the United States.