SEC Form DEF 14A filed by Albertsons Companies Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. ) 

Check the appropriate box:

Payment of Filing Fee (Check all boxes that apply):

June 21, 2024

Dear Fellow Stockholder:

It is my pleasure to invite you to attend the Annual Meeting of Stockholders of Albertsons Companies, Inc. at 3:00 p.m. Mountain Daylight Time on Thursday, August 8, 2024.

We continue to work diligently toward the closing of our proposed merger with Kroger. Through a family of well-known and trusted supermarket banners, this combination will expand customer reach and improve proximity to deliver fresh and affordable groceries to approximately 85 million households with a premier omnichannel experience. Merging with Kroger will also enable us to lower prices for customers, enhance the customer shopping experience, provide new career opportunities for our associates, protect union jobs, increase associate wages, and build on our shared commitment to supporting local communities.

While efforts on the merger were still underway in fiscal 2023, we remained laser-focused on our performance and execution as a stand-alone public company, and made significant progress against our strategic priorities. We continued to deliver on our Customers for Life strategy—investing approximately $2.0 billion in our stores and technology, while advancing our productivity initiatives to increase efficiency and drive cost savings. We also continued to live and fulfill our purpose of bringing people together around the joys of food and inspiring wellbeing.

I am incredibly proud of the way our team continued to serve customers and communities while driving solid operating and financial performance. Our results for fiscal 2023 speak to the significant progress we have made amidst industry-wide headwinds. Identical sales increased 3%, total sales were $79.2 billion, and net income was $1.3 billion, or $2.23 per share. Adjusted net income was $1.7 billion, or $2.88 per share, and Adjusted EBITDA was $4.3 billion. We also returned $276 million to our stockholders this fiscal year through common stock dividends.

To ensure we develop new and innovative ways to grow the business and serve our customers and communities in the future, we remained focused on our five strategic priorities during fiscal 2023.

Deepening our Digital Connection and Engagement with our Customers – This has been a critical priority for us for several years now and I am pleased to say we continued to make great strides across a variety of important digital initiatives. We increased loyalty membership by 16% to nearly 40 million customers and grew our digital sales by 22%. At the same time, we continued to strengthen and develop our capabilities in both Drive Up and Go and delivery, to provide our customers with speed and convenience—including 30-minute flash delivery service. We also launched Sincerely Health, a digital health and wellness platform that has deepened and extended the engagement we have with our customers.

Differentiating our Store Experience – We continued to enhance merchandising in our stores with displays designed to make it more convenient for our customers to assemble meals, and have added grab-and-go sections to allow customers to quickly select items from displays at the front of the store. We are also scaling the use of “in-store mode” within our mobile app, which provides a navigational tool to guide a customer’s journey through our store, assisting with the product location, quick access to deals, and other features. We are also enhancing the technology in our stores to automate and simplify tasks, enabling our associates to spend more time on high-touch and valued-added interactions with our customers.

Enhancing What We Offer – To enhance our value proposition for customers, we continued to refine and add to our Own Brands product portfolio, including the launch of new mix-and-match frozen meal solutions that provide high quality, convenient dinners for busy families. We also redesigned packaging on over 4,500 items during the year, including Signature Select, O Organics, and Open Nature, with refreshed modern logos and bold package design to build greater brand recognition. We elevated our distinctiveness in Fresh, tailoring our selection based on local demographics and preferences, enhanced our capabilities in pricing and assortment, and scaled our Ready Meals program to nearly 1,400 stores, now in more than 60% of our stores. In addition, we held our fourth Annual Supplier Diversity Program Summit to provide diverse-owned suppliers the opportunity to expand their business with Albertsons Companies.

Modernizing our Capabilities – We improved our supply chain through automation and continued the rollout of a new enterprise warehouse management system. We have also further developed the Albertsons Media Collective, an easy-to-use, transparent, and modern media collective platform that has dramatically improved our capabilities in client advocacy, innovation, and measurement. We also launched a new meal planning tool that provides shoppable meal plans and recipes on our grocery apps and websites, which includes a budget tracker and cooking guide complete with a built-in timer. This tool was voted the People’s Voice winner for best shopping and retail app in the 28^th annual Webby Awards for its seamless omnichannel shopping experience.

Maximizing our Positive Impact – We are committed to supporting causes that impact our customers’ lives and strengthen the communities we serve. In an effort to reduce food insecurity, we enabled more than 220 million meals through our store food donation program and the Nourishing Neighbors Program of the Albertsons Companies Foundation during fiscal 2023. From fiscal 2019 through 2023, we have enabled 1.15 billion meals. In addition, our O Organics brand launched its “Fight Hunger, Serve Hope” campaign to combat hunger for school-aged children during the summer months, and the Nourishing Neighbors Program donated more than $1 million to support meals for families affected by the wildfires in Maui, Hawaii.

Finally, I want to recognize the approximately 285,000 associates who have made our success possible through their commitment to meeting the needs of our customers and communities. Your dedication to serving our customers and communities is what makes our performance possible.

On behalf of our board of directors, thank you for your continued support and investment in Albertsons Companies.

Sincerely,

Vivek Sankaran
Chief Executive Officer and Director

By Order of the Board of Directors,

Vivek Sankaran
Chief Executive Officer, Director

Proxy Statement Summary

 

This summary highlights information contained elsewhere in this proxy statement and in our annual report on Form 10-K for the year ended February 24, 2024 (the “2023 Form 10-K”) as filed with the Securities and Exchange Commission (the “SEC”) on April 22, 2024, for Albertsons Companies, Inc. (the “Company”, “Albertsons”, “we”, “ACI”, “our” or “us”). You should read this proxy statement and the 2023 Form 10-K before voting.

 

Annual Meeting of Stockholders

 

DATE AND TIME August 8, 2024 3:00 p.m., Mountain Daylight Time

PLACE: www.virtualshareholdermeeting.com/ACI2024

RECORD DATE: June 11, 2024

 

We are holding the Annual Meeting in a virtual-only format. You will not be able to attend the Annual Meeting in person.

 

How to Vote

 

	BY INTERNET	●  Go to the website http://www.proxyvote.com and follow the instructions, 24 hours a day, seven days a week.   ●  You will need the 16-digit number included on your proxy card.
	BY TELEPHONE	●  From a touch-tone telephone, dial 1-800-690-6903 and follow the recorded instructions, 24 hours a day, seven days a week.   ●  You will need the 16-digit number included on your proxy card.
	BY MAIL	●  Mark your selections on the proxy card.   ●  Date and sign your name exactly as it appears on your proxy card.   ●  Mail the proxy card in the enclosed postage-paid envelope provided to you.

 

See “Questions and Answers About the Annual Meeting and Voting” for information regarding attending the Annual Meeting.

 

 

 

Annual Meeting Agenda and Voting Roadmap

 

PROPOSAL 1:  Election of 11 Director Nominees   At our Annual Meeting, stockholders will elect 11 directors. The nominees were recommended for nomination by our Governance, Compliance and ESG Committee (the “Governance Committee”) and our board of directors (the “Board”) approved the nominees for re-election. If elected, the directors will hold office until our 2025 annual meeting and serve until their successors have been duly elected and qualified or until any such director’s earlier resignation or removal.

Our Board recommends a vote “FOR” each director nominee.

 

PROPOSAL 2:  Ratification of the Appointment of the Independent Registered Public Accounting Firm   The Audit and Risk Committee (the “Audit Committee”) has appointed Deloitte and Touche LLP (“Deloitte and Touche”) to serve as our independent registered public accounting firm for the fiscal year ending February 22, 2025.
	Our Board recommends a vote “FOR” this proposal.

 

PROPOSAL 3:  Advisory (Non-Binding) Vote to Approve the Company’s Named Executive Officer Compensation   As required by Section 14A of the Securities Exchange Act of 1934 (the “Exchange Act”), we are providing stockholders with an opportunity to cast an advisory vote on the compensation of our named executive officers (the “NEOs”) as disclosed in the Compensation Discussion & Analysis (“CD&A”), the compensation tables, narrative discussion, and related footnotes included in this proxy statement.

Our Board recommends a vote “FOR” this proposal.

 

In addition, we will conduct any other business that may properly come before the Annual Meeting. See “Questions and Answers About the Annual Meeting and Voting” for more information. 

 

Our Director Nominees

 

The following table provides summary information about each director nominee.

 

See Proposal 1 beginning on page 15 for more information on our Board and corporate governance.

 

	Name and Principal Occupation	Age	Director Since	Committee Membership					Relevant Skills &Experiences
				CC	AC	GC	TC	FC
	Sharon Allen+ Former U.S. Chairman of Deloitte LLP	72	2015						Public Company Leadership; Corporate Governance; Financial Expert; Risk Management; Strategy
	James Donald*+ Former CEO and President of ACI	70	2019						Public Company Leadership; Financial Literacy; Risk Management; Food and Retail; Operations; Strategy; Real Estate
	Kim Fennebresque+ Former Senior Advisor to Cowen Group Inc.	74	2015						Public Company Leadership; Financial Expert; Risk Management; Operations; Strategy
	Chan Galbato* CEO of Cerberus Operations and Advisory Company, LLC	61	2021						Public Company Leadership; Financial Literacy; Risk Management; Operations; Strategy
	Allen Gibson+ Chief Investment Officer of Centaurus Capital LP	58	2018						Financial Literacy; Risk Management; Corporate Governance; Strategy; Cybersecurity and Technology
	Lisa Gray Vice Chair and Senior Legal Officer of Cerberus Operations & Advisory Company, LLC	68	2023						Strategy; Financial Literacy; Mergers and Acquisitions and Financial Transactions; Corporate Governance; Compliance; Communications; Human Resources
	Sarah Mensah+ President of Jordan Brand at Nike Inc.	59	2023						Public Company Leadership; Operations; Retail; Strategy; Risk Management; Marketing; Financial Literacy
	Vivek Sankaran CEO of ACI	61	2019						Public Company Leadership; Financial Literacy; Risk Management; Food and Retail; Operations; Strategy
	Alan Schumacher+ Former Member of the Federal Accounting Standards Advisory Board	77	2015						Public Company Leadership; Financial Expert; Corporate Governance; Strategy; Risk Management
	Brian Kevin Turner+ Chairman of Zayo Group and former COO of Microsoft Corporation	59	2020						Public Company Leadership; Financial Literacy; Risk Management; Food and Retail; Operations; Strategy; Cybersecurity (including Artificial Intelligence) and Technology
	Mary Elizabeth West+ Former Senior Vice President and Chief Growth Officer, The Hershey Company	61	2020						Public Company Leadership; Financial Literacy; Risk Management; Food and Retail; Corporate Governance; Operations; Marketing; Strategy; Mergers and Acquisitions

 

AC - Audit Committee	FC - Finance Committee	Chair
CC - Compensation Committee	GC - Governance Committee	Member
* Co-Chair of the Board	TC - Technology Committee
+ Independent Director

 

Board Snapshot

 

In 2023, the Board appointed two new members - Ms. Lisa Gray and Ms. Sarah Mensah. With the appointment of Mmes. Gray and Mensah, the majority of the Board members continued to be independent, and each of our standing committees is fully independent.

 

The following summarizes certain aspects of the Board’s current composition:

 

 

 

Below are some of the relevant skills and experiences of our directors.

 

Relevant Skills & Experiences

 

Mergers and Acquisitions and Financial Transactions	Financial Literacy/Expertise	Risk Management
2 directors	11 directors	10 directors
Public Company Leadership/ Other Public Company Board Service	Food and Retail Industry	Strategic Planning
9 directors	5 directors	11 directors
Information Technology and Cybersecurity	Operations and Marketing	Real Estate
2 directors	7 directors	1 director
	Corporate Governance
	5 directors

 

Solicitation of Proxies

Our Board is soliciting proxies in connection with the Annual Meeting (and any adjournment thereof) to be held virtually on August 8, 2024, at 3:00 p.m. Mountain Daylight Time. The approximate date on which this proxy statement and the enclosed proxy are first being sent to stockholders is June 21, 2024.

Shares Outstanding and Voting Rights

As of the Record Date, 579,090,041 shares of Common Stock of the Company were outstanding. Holders of Common Stock are entitled to one vote for each share so held. Only holders of Common Stock as of the Record Date are entitled to receive notice of, and to vote at, the Annual Meeting.

	PROPOSAL 1:  Election of Directors
		Our Board recommends that stockholders vote “FOR” each nominee

Board Composition

Our Board is currently comprised of 11 members. All Board members are elected to serve a one-year term. The majority of the members on our Board are independent and our three standing committees are fully independent.

We are bound by certain contractual provisions under the stockholders’ agreement, dated June 25, 2020 (the “Stockholders’ Agreement”) regarding Board membership. Pursuant to the Stockholders’ Agreement, Cerberus Capital Management, L.P. (“Cerberus”), our largest stockholder, has the right to designate up to four directors for election to our Board. As of February 24, 2024, other than Cerberus, no other party to the Stockholders’ Agreement has any right to nominate a director or observer to the Board.

Cerberus’ designation rights are tied to their Common Stock ownership which provides as follows:

Annual Meeting Slate

At our Annual Meeting, stockholders will elect 11 directors to hold office until our 2025 annual meeting of stockholders, and to serve until their successors have been duly elected and qualified or until any such director’s earlier resignation or removal. Any vacancies on the Board will be filled by a majority of the directors currently serving on the Board. A director appointed to fill a vacancy, or a newly created directorship, shall hold office until the next annual meeting of stockholders and until his or her successor shall be elected and qualified.

Our Board has nominated the following directors for election based on the recommendation of the Governance Committee. At this time, we have no reason to believe that any nominee will be unable or unwilling to serve if elected. However, should any of them become unavailable or unwilling to serve before the Annual Meeting, your proxy card authorizes us to vote for a replacement nominee if the Board names one. The following biographical information is furnished as to each nominee for election as a director as of the Record Date.

	Sharon Allen   Former U.S. Chairman of Deloitte LLP   Age: 72  Director Since: 2015
	Committees: Governance Committee (Chair); Audit Committee
	Nominee: Board
	Independent: Yes

PROFESSIONAL HIGHLIGHTS

OTHER BOARD ENGAGEMENT

SKILLS AND QUALIFICATIONS

Ms. Allen’s extensive accounting and audit experience broadens the scope of our Board’s oversight of our financial performance and reporting. Additionally, her leadership and corporate governance experience with large public companies is valuable to our Board’s governance and compliance, strategic planning, and risk management insight.

	James Donald   Former CEO and President of ACI   Age: 70  Director Since: 2019  Co-Chairman of the Board
	Committees: Finance Committee (Co-Chair)
	Nominee: Board
	Independent: Yes

PROFESSIONAL HIGHLIGHTS

OTHER BOARD ENGAGEMENT

SKILLS AND QUALIFICATIONS

Mr. Donald’s depth of experience in the retail industry, his expertise across real estate and operations, his decades of leadership roles at consumer-focused companies and his intimate familiarity with the Company makes him a valuable member of our Board.

	Kim Fennebresque   Former Senior Advisor to Cowen Group Inc.   Age: 74  Director Since: 2015
	Committees: Compensation Committee (Chair); Audit Committee
	Nominee: Board
	Independent: Yes

PROFESSIONAL HIGHLIGHTS

OTHER BOARD ENGAGEMENT

SKILLS AND QUALIFICATIONS

Mr. Fennebresque’s leadership experience in the financial services industry, and his role as a director of several public companies brings risk management expertise and a diverse viewpoint to the deliberations of our Board.

	Chan Galbato   CEO of Cerberus Operations and Advisory Company, LLC   Age: 61  Director Since: 2021  Co-Chairman of the Board
	Committees: Finance Committee (Co-Chair)
	Nominee: Cerberus
	Independent: No

PROFESSIONAL HIGHLIGHTS

OTHER BOARD ENGAGEMENT

SKILLS AND QUALIFICATIONS

Mr. Galbato’s proven track record as a leader in multiple operational and strategic roles at various public and private companies qualify him to serve as the Co-Chair of the Board. In particular, he provides our Board valuable insights on the Company’s strategy and operations.

	Allen Gibson   Chief Investment Officer of Centaurus Capital LP   Age: 58  Director Since: 2018
	Committees: Governance Committee; Technology Committee (Co-Chair);  Finance Committee
	Nominee: Cerberus
	Independent: Yes

PROFESSIONAL HIGHLIGHTS

OTHER BOARD ENGAGEMENT

SKILLS AND QUALIFICATIONS

Mr. Gibson’s knowledge of capital markets enhances the ability of our Board to make prudent financial judgments and provides our Board insight into and understanding of our financial performance and plan.

	Lisa Gray   Vice Chair and Senior Legal Officer of Cerberus Operations & Advisory Company, LLC   Age: 68  Director Since: 2023
	Committees: Technology Committee; Finance Committee
	Nominee: Cerberus
	Independent: No

PROFESSIONAL HIGHLIGHTS

OTHER BOARD ENGAGEMENT

SKILLS AND QUALIFICATIONS

Ms. Gray’s previous experience with the Company pre-IPO and deep experience in a broad range of transactions including complex mergers and acquisitions, financings and debt restructurings, and regulatory and legislative advocacy, human resources, corporate communications, and governance, allows her to provide key oversight on risk management, strategy and operations.

	Sarah Mensah   President of Jordan Brand at Nike Inc.   Age: 59  Director Since: 2023
	Committees: Governance Committee; Finance Committee
	Nominee: Board
	Independent: Yes

PROFESSIONAL HIGHLIGHTS

OTHER BOARD ENGAGEMENT

SKILLS AND QUALIFICATIONS

Ms. Mensah is an accomplished leader with operational, marketing and branding expertise. Her decades-long leadership experience in the retail industry is a significant value add to the Board’s operational and strategic management skills.

	Vivek Sankaran   CEO of ACI   Age: 61  Director Since: 2019
	Committees: None
	Nominee: Board
	Independent: No

PROFESSIONAL HIGHLIGHTS

OTHER BOARD ENGAGEMENT

SKILLS AND QUALIFICATIONS

Mr. Sankaran’s decades of experience in the food and beverage industry, as well as his management and leadership experience, provides our Board with expertise relevant to our business and our operational, financial, and strategic plan.

	Alan Schumacher   Former Member of the Federal Accounting Standards Advisory Board   Age: 77  Director Since: 2015
	Committees: Audit Committee (Chair); Governance Committee
	Nominee: Board
	Independent: Yes

PROFESSIONAL HIGHLIGHTS

OTHER BOARD ENGAGEMENT

SKILLS AND QUALIFICATIONS

Mr. Schumacher’s deep understanding of accounting principles and his experience as a board member of several public companies, expands the breadth of our Board’s expertise in accounting and financial reporting oversight and risk management.

	Brian Kevin Turner   Chairman of Zayo Group and former COO of Microsoft Corporation   Age: 59  Director Since: 2020
	Committees: Compensation Committee; Technology Committee (Co-Chair)
	Nominee: Cerberus
	Independent: Yes

PROFESSIONAL HIGHLIGHTS

OTHER BOARD ENGAGEMENT

SKILLS AND QUALIFICATIONS

Mr. Turner’s expertise in cybersecurity, including artificial intelligence, and technology is very valuable to the Board. Additionally, his strategic and operational leadership skills in supply chain, merchandising, branding and marketing provide our Board with valuable insight relevant to our business.

	Mary Elizabeth West   Former Senior Vice President and Chief Growth Officer, The Hershey Company   Age: 61  Director Since: 2020
	Committees: Compensation Committee; Governance Committee
	Nominee: Board
	Independent: Yes

PROFESSIONAL HIGHLIGHTS

OTHER BOARD ENGAGEMENT

SKILLS AND QUALIFICATIONS

Ms. West’s proven track record of innovation and transformation across myriad facets of retail brings to our Board extensive food and retail industry experience. Ms. West provides our Board with expertise in marketing, brand building and strategic and operational planning.

Director Qualifications, Expertise and Attributes

The Governance Committee is responsible for facilitating director assessments, identifying skills and expertise that candidates should possess, and screening, selecting, and recommending candidates for approval by our Board, including nominees duly submitted by stockholders. Although our Board retains ultimate responsibility for approving candidates for election, the Governance Committee conducts the initial screening and evaluation. In evaluating candidates, the Governance Committee adheres to the director qualification standards outlined in our Corporate Governance Guidelines. The Board has not established any minimum qualifications that must be met by a candidate or identified any set of specific qualities or skills that it deems to be mandatory. The Governance Committee seeks to achieve a balance of knowledge, experience, and capability on the Board. Some of the factors that are taken into consideration in evaluating the suitability of individual candidates are corporate governance experience (such as an officer or former officer of a publicly-held company), experience as a board member of another publicly-held company, familiarity with the Company, expertise in a specific area of the Company’s operations, expertise in financial markets, education and professional background and existing commitments to other businesses, including service on other company boards. Each candidate must also possess fundamental qualities of intelligence, honesty, demonstrated character and good judgment, high ethics and standards of integrity, fairness and responsibility. The Governance Committee will also consider a candidate’s independence, as set forth in the NYSE listing standards and, as applicable, the Exchange Act in evaluating the qualification of prospective directors.

In determining whether to recommend a director for re-election, the Governance Committee considers the director’s past attendance at meetings and participation in, and contributions to, the activities of the Board.

The Governance Committee will consider candidates recommended by other members of the Board, management and stockholders and may also retain professional search firms to identify candidates. The criteria described above is used to evaluate all candidates, including candidates recommended by stockholders. Ms. Gray was recommended for election by Cerberus, pursuant to the Stockholders Agreement. Ms. Mensah was recommended to the Board by the Governance Committee through a retained professional search firm.

We believe that each of our directors has met the qualifications set forth in our Corporate Governance Guidelines. Our Board is a highly engaged group of individuals who represent a diverse and broad range of attributes, qualifications, experiences, and skills that provide an effective mix of viewpoints and knowledge.

The following matrix summarizes the core competencies of each of our director nominees. A mark indicates a specific area of focus or expertise on which the Board particularly relies. The absence of a mark does not mean the director does not possess that qualification or skill. We believe that each of our directors meets the criteria set forth in our Corporate Governance Guidelines. As noted in the director biographies, our directors have experience, qualifications, and skills across a wide range of public and private companies, possessing a broad spectrum of experience both individually and collectively. Our director nominees’ biographies describe each director’s background and relevant experience in more detail.

Board Leadership

Separation of the Roles of Chairman of the Board and CEO

Our Board separates the roles of the CEO and the Chairman and has appointed two Co-Chairs (Messrs. Donald and Galbato) who preside over Board meetings and execute all other duties to be performed by the Chair under our Corporate Governance Guidelines. Since neither of our Board or our Co-Chairs are members of management, in accordance with our Corporate Governance Guidelines we do not have a Lead Director.

Separating the roles of Chairman and CEO serves two important purposes: (1) it facilitates a more diverse and comprehensive approach to governance as we continue to develop and implement best practices that are consistent with the Board’s oversight role and (2) it enables strong day-to-day executive leadership by the CEO. Through the role of the Co-Chairs, the Board’s committees, and the regular use of executive sessions of the non-management directors, the Board can maintain independent oversight of risks to our business, our long-term strategies, annual business plans, and other corporate priorities. Our Board has determined that its current leadership structure and governance practices support full and free discourse on issues that are important to our stockholders while providing an appropriate oversight over management that serves the interests of our stockholders.

Separate Sessions of Non-Management Directors

Pursuant to our Corporate Governance Guidelines and the rules of the NYSE, our non-management directors regularly meet in executive sessions with no members of management present. Our Board Co-Chairs chair the meetings. In their absence, under our Corporate Governance Guidelines, the non-management directors will select a director present at the meeting to chair.

Board Independence

The Board, in coordination with our Governance Committee, and with the assistance of the Company’s legal counsel, considered the applicable NYSE tests to determine the independence of its members. Based on this review, the Board affirmatively determined that Mmes. Allen, Mensah and West and Messrs. Donald, Fennebresque, Gibson, Turner and Schumacher are (a) independent under the applicable rules of the NYSE and as such term is defined in Rule 10A-3(b)(1) under the Exchange Act, (b) each of Mme. Allen and Messrs. Fennebresque and Schumacher meet all applicable requirements for membership on the Audit Committee, and (c) each of Mme. Allen and Messrs. Fennebresque and Schumacher qualifies as an “audit committee financial expert” as such term is defined in Item 407(d)(5)(ii) of Regulation S-K promulgated by the SEC, and satisfy the NYSE’s financial experience requirements. In May 2024, the Board determined that beginning fiscal 2024, Mr. Donald is deemed independent pursuant to NYSE listing standards.

Board’s Commitment to Diversity

The Governance Committee considers diversity of background (including, but not limited to, gender, race, origin, age, skills, experience, and such other factors as it deems appropriate), in its search for the best candidates to serve on the Board. In appointing board members, our Board considers, in addition to the core attributes, the range of talents, experience and expertise that are needed and would complement those that are currently represented on the Board. Our current directors bring a diverse set of skills, experiences and viewpoints to the Company that are important to drive our strategy forward as the market and competitive landscape evolve. During fiscal 2023, the Board appointed two directors (Mmes. Gray and Mensah) to the Board, which expanded the Board’s gender and ethnic representation.

The following presentation highlights some of the diversity metrics of our Board.

Tenure/Age/Gender/Racial

Role of Board in Risk Oversight

The entire Board is engaged in risk management and the oversight of Company-wide risks. To supplement the Board’s risk oversight practices, our Board assigns to its committees additional oversight duties in their respective areas of focus.

Overseeing the development and execution of the Company’s strategy by management is one of our Board’s primary responsibilities. Our Board and its committees work closely with management to provide oversight, review and counsel on long term strategy, risks, and opportunities. Management benefits from the insights and perspectives of a diverse mix of directors with complementary qualifications, expertise, and attributes. Senior management and other leaders from across the Company provide at least quarterly business and strategy updates to our Board and the Board also reviews the alignment of the Company’s budget and capital plan with its strategic goals. Each committee also provides a report to the full Board at every meeting regarding the issues discussed and actions taken at the preceding committee meeting.

Significant oversight areas of the Board are provided below.

Board Meetings

During fiscal 2023, our Board met four times and acted seven times via written consent. All directors except Ms. Mensah attended at least 75% of all Board and committee meetings. Ms. Mensah joined the Board in December 2023 and due to an unavoidable prior commitment set before she joined the Board she could not attend one committee meeting. Ms. Mensah attended all other Board and committee meetings.

Pursuant to our Corporate Governance Guidelines, absent extraordinary circumstances, each director is expected to attend in person our annual meeting of stockholders. All directors attended our annual meeting in 2023.

Corporate Governance Policies and Charters

Our corporate governance framework is designed to ensure our Board has the authority and procedures in place to provide appropriate oversight, review and evaluate our business operations and to make decisions independent of management. The Board reviews and updates (as needed) our corporate governance framework based on, among other things, the Board and committees’ annual assessments, governance best practices, and regulatory developments.

The following documents make up our corporate governance framework:

Current copies of the above policies and guidelines are available on our website at https://www.albertsonscompanies.com/investors under the “Governance” tab.

Code of Business Conduct and Ethics

We have also adopted a Code of Business Conduct and Ethics (the “Code of Conduct”), which applies to directors, executive officers, and associates. The Code of Conduct sets forth our policies on critical issues such as conflicts of interest, insider trading, protection of our property, business opportunities and proprietary information. We will post on our website any amendment to, or a waiver from, a provision of the Code of Conduct for executive officers and directors that has been approved by our Board. The Code of Conduct is available on our website at https://albertsonscompanies. com/investors under the “Governance” tab and is also available in print to any stockholder upon request.

Board Committees

Our Board currently has five committees – Audit, Compensation, Governance, Technology, and Finance. The current composition of each of the committees is set forth below.

Board Members	Audit	Compensation	Governance	Technology	Finance
Sharon Allen*
James Donald* Board Co-Chair
Kim Fennebresque*
Chan Galbato Board Co-Chair
Allen Gibson*
Lisa Gray
Sarah Mensah*
Vivek Sankaran
Alan Schumacher*
Brian Kevin Turner*
Mary Elizabeth West*

Chairperson

Member

* Independent Director

The Audit Committee maintains open channels of communication between the Board, the independent auditor and management. Our Board has affirmatively determined that each of the three members of the Audit Committee qualify as an “audit committee financial expert” within the meaning of Item 407(d)(5)(ii) of Regulation S-K promulgated by the SEC and satisfies the standards for independence of the NYSE and the SEC as they relate to audit committees.

The Audit Committee is governed by the Audit Committee Charter which sets forth the purpose and responsibilities of this committee.

AUDIT COMMITTEE FUNCTIONS

Some of the key functions of the Audit Committee include:

The Audit Committee meets on a quarterly basis with Company management and Deloitte and Touche to review, discuss, and approve (as applicable) among other items, the earnings press release, the Company’s unaudited or audited financial statements related to the quarter and the fiscal year, any changes in significant accounting policies and their impact on the Company’s financial statements, and the Company’s internal controls. The Audit Committee also meets regularly with Deloitte and Touche in executive sessions outside the presence of members of management. Additionally, the Audit Committee meets quarterly with the Company’s internal audit management team to review and discuss the internal audit plan, reports, and significant matters identified by the internal audit team.

The Board has also delegated its authority to approve related party transactions to the Audit Committee. Management must present to the Audit Committee all potential related party transactions for approval. The Audit Committee approves or ratifies related party transactions based upon the determination of whether the transaction is fair and in the best interest of the Company. See “Certain Relationships and Related Party Transactions” for further details on the related party transactions during fiscal 2023.

Approval of Audit and Non-Audit Services

The Audit Committee reviews and pre-approves Deloitte and Touche’s audit plan and estimated fees for the upcoming audit year. The Audit Committee also pre-approves any non-audit services, including tax services to be performed for the Company by Deloitte and Touche.

Fees Paid to Independent Registered Public Accounting Firm

We paid the following fees (in thousands) to Deloitte and Touche and its affiliates for professional services rendered by them during the 2023 and 2022 fiscal years, respectively:

Audit Committee Report

The Audit Committee has reviewed and discussed with management the Company’s audited financial statements for fiscal 2023. We have discussed with Deloitte and Touche the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC. We have received the written disclosures and the letter from Deloitte and Touche as required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence and have discussed with Deloitte and Touche its independence. Based on the above review and discussions, we recommended to the Board that the audited financial statements for the Company be included in the Company’s 2023 Form 10-K for filing with the SEC.

Respectfully submitted,

Alan Schumacher (Chair)
Kim Fennebresque
Sharon Allen

Our Board has affirmatively determined that each of our Compensation Committee members satisfies the standards for independence of the NYSE and also qualify as a "non-employee director" as defined under Rule 16b-3 of the Exchange Act. The Compensation Committee is governed by the Compensation Committee Charter, which sets forth the purpose and responsibilities of the committee.

COMPENSATION COMMITTEE FUNCTIONS

Some of the key functions of the Compensation Committee include:

Our Board has affirmatively determined that each of our Governance Committee members satisfies the standards for independence of the NYSE. The Governance Committee is governed by the Governance Committee Charter setting forth the purpose and responsibilities of this committee.

GOVERNANCE COMMITTEE FUNCTIONS

Some of the key functions of the Governance Committee include:

The Technology Committee is governed by the Technology Committee Charter, which sets forth the purpose and responsibilities of the committee.

TECHNOLOGY COMMITTEE FUNCTIONS

Some of the key functions of the Technology Committee are the following:

The Finance Committee is governed by the Finance Committee Charter, which sets forth the purpose and responsibilities of the committee.

FINANCE COMMITTEE FUNCTIONS 

Some of the key functions of the Finance Committee include:

Compensation Committee Interlocks and Insider Participation

None of the members of our Compensation Committee is or has at any time during the past year been an officer or employee of the Company. None of our executive officers serves as a member of the compensation committee or board of directors of any other entity that has an executive officer serving as a member of our Board or Compensation Committee.

Director Compensation

Our director compensation program is designed to attract and fairly compensate highly qualified, non-management directors. The Compensation Committee annually reviews and seeks advice from Frederic W. Cook & Co., Inc. (“FW Cook”), our independent compensation consultant, regarding the Company’s director compensation practices compared with those of other similarly situated companies. Based upon peer company data, for fiscal 2023, FW Cook recommended an annual cash retainer fee for the Board Chair position, to be split between Co-Chairs. As previously disclosed, Mr. Donald's employment agreement terminated in fiscal 2022. Consequently, beginning fiscal 2023, Mr. Donald became eligible for compensation under our non-management director compensation policy. The Compensation Committee recommended, and the Board approved the following cash compensation for services on our Board.

Annual Cash Compensation

The cash compensation of the non-management directors for fiscal 2023 was as follows:

Annual cash retainers are paid in four equal quarterly installments at the end of each quarter for services rendered during the quarter. We do not pay any meeting fees but reimburse all our directors for reasonable documented out-of-pocket expenses incurred by them in connection with their attendance at Board and committee meetings.

In addition to the annual cash retainers, the non-management directors receive an annual grant of time-based restricted stock units (“TBRSUs”) with a value of $145,000. The number of TBRSUs is determined by dividing $145,000 by the closing price of Common Stock on the grant date, rounded down to the nearest whole share. The grant date for directors is the first business day of the fiscal year, and the vest date is the last day of the corresponding fiscal year. To the extent dividends are declared by our Board, each unvested TBRSU is eligible to receive a dividend equivalent right (“DER”) which will vest according to the same schedule as the underlying unit. Accrued but unvested DERs will also receive DERs in subsequent dividends. This allows the account of the non-management director to be credited with an additional number of TBRSUs equal to the cash dividend that the non-management director would have received had the TBRSUs been vested as of the record date of the dividend.

Director Share Retention Guidelines

The Board has also adopted Non-management Director Share Retention Guidelines to align the interests of its non-management directors with the interests of the Company’s stockholders. Each non-management director must, during his or her service on the Board, retain at least 50% of the shares of Common Stock received as a result of equity or equity-based awards. As of June 21, 2024, all our directors were in compliance with our policy.

2023 Director Compensation

The following table sets forth summary information regarding the compensation of our non-management directors for fiscal 2023. Mr. Sankaran does not receive any compensation for his Board service - See “Compensation Discussion and Analysis” for his compensation.

Communications with the Board

As stated in our Corporate Governance Guidelines, any stockholder or other interested party who wishes to communicate with the Board, its Co-Chairs, a committee, the non-employee directors, or any individual director in his or her capacity as such may direct such communication in writing to the following address:

Albertsons Companies, Inc.
c/o General Counsel and Chief Policy Officer
250 Parkcenter Blvd.
Boise, Idaho, 83706

The General Counsel will forward the communication to the appropriate group or individual except for correspondence which is not more suitably directed to management or items of the following nature – advertising, promotions of a product or service, patently offensive material and matters completely unrelated to the Board’s functions, Company performance, Company policies or items that could not reasonably be expected to affect the Company’s public perception.

As a long-standing neighborhood grocer, we believe we have an ongoing commitment to leverage our resources and expertise to support the communities we serve and the planet we share. Our Board is deeply committed to this effort and the Governance Committee provides oversight to ensure that the Company’s strategy is appropriate, takes account of material risks, and is likely to deliver results.

Our ESG platform, Recipe for Change, is based on four pillars – Planet, People, Product and Community. 

As part of our commitment to promote a healthy environment for future generations, we are working to reduce our carbon footprint in line with standards set by the Science Based Targets initiative (“SBTi”), by addressing emissions from our operations and the use of sold goods. We are also engaging suppliers to set their own science-based targets.

To further our carbon emission reductions, we are continuing to improve our energy efficiency, enhance our refrigeration infrastructure and increase the use of renewable energy. During fiscal 2023, we completed more than 500 energy efficiency projects and more than 90 projects to transition stores to refrigerants with lower global warming potential. We expect to publish our carbon emission calculations for fiscal 2023 in our 2024 Recipe for Change Report.

We are also continuing to improve on diverting operational waste from landfills. During fiscal 2023, we recycled over 865 million pounds of cardboard and 25 million pounds of plastic bags and film.

As one of the largest food and drug retailers in the U.S., we recognize that our ability to delight our customers lies in the engagement of our associates. We are committed to fostering a diverse, equitable and inclusive culture and aspire to reflect the vibrant and thriving communities in which we live and work.

As part of our efforts to build an inclusive and welcoming culture, we continued to incorporate Diversity, Equity, Inclusion & Belonging goals into the annual performance management process of our top leaders and integrated our “Leading with Inclusion” bias workshops into the training curriculum for management level associates.

To foster belonging in our associates, we launched our ninth associate resource group (“ARG”) – Women of Color Alliance – and expanded membership across all groups to more than 7,000 people. Our ARGs are open to associates in the corporate and division offices, field leadership and supply chain facilities. In addition, we supported Inclusion Councils in our 12 operating divisions and back-office functions through the National Diversity Council which is co-chaired by our CEO and Chief Diversity, Equity, Inclusion & Belonging Officer.

We believe in fostering DEI&B not only among our associates, but also among our business partners and within our communities. As part of our Supplier Diversity program, we offer an early payment program for our diverse-owned suppliers to help make access to working capital more equitable. During fiscal 2023, we hosted our fourth annual diverse supplier summit focused on promoting innovation and appealing to growing demographic groups. Our Social Justice Grant program, funded by the Albertsons Companies Foundation (our "Foundation"), supports initiatives that promote equality in the communities we serve. To date, the program has contributed over $3.5 million to organizations aligned with this mission.

Reducing food waste going to landfills has been a long-standing priority across our stores, distribution centers, and manufacturing plants. Leveraging the U.S. Environmental Protection Agency’s (“EPA”) Wasted Food Scale, our strategy to reduce food waste is broken into three main workstreams: preventing food waste, donating edible food, and diverting inedible food waste.

During fiscal 2023, we expanded the use of technology in our operations that reduce waste by improving our forecasting for ordering and producing the right amount and assortment of products for our customers. At the end of fiscal 2023, over 97% of our stores were donating on a weekly basis to a variety of food recovery organizations. In fiscal 2023, we donated more than 92 million pounds of food (equivalent of 76 million meals) to our local Feeding America partners. For food that cannot be donated, we have organic waste diversion services for most of our stores and during fiscal 2023 we diverted over 325 million pounds of food from landfills.

We are also working to increase the circularity of our Own Brands packaging by improving the recyclability, reusability and compostability of product packaging. As part our efforts, we include recycling instructions on more than 7,000 Own Brands packaged products using the How2Recycle label and QR codes. In addition, more than 40,000 store-made items now feature recycling information on scale labels and other packaging, directing customers to an informative new recycling page. Moving forward, all new Own Brands products will feature the How2Recycle labeling system to improve the reliability and transparency of recyclability claims. This label helps customers know how to properly dispose and recycle our Own Brands product packaging to help keep recyclable plastic and packaging out of the landfill.

We work to address hunger locally by enabling meals through our store food donation program and the Nourishing Neighbors Program of our Foundation. Between these two initiatives, we enabled more than 220 million meals in 2023, totaling more than 1.15 billion meals since 2019.

A variety of programs contribute to the millions of meals we enable each year. For example, in 2023, our O Organics brand launched its “Fight Hunger, Serve Hope” campaign to combat hunger for school-aged children during the summer months and donated 28 million meals to the Nourishing Neighbors Program. Additionally, the Nourishing Neighbors Program donated more than $1 million to support meals for families affected by the wildfires in Maui, Hawaii.

In addition to offering community support, we provided assistance through our “We Care” fund to help over 680 associates who were personally impacted by natural disasters and personal hardships.

As a complement to our hunger relief efforts, we helped improve food access by integrating Electronic Benefits Transfer functionality into our e-commerce system, enabling SNAP (“Supplemental Nutrition Assistance Program”) beneficiaries to apply their benefits towards online grocery purchases. Additionally, as part of our commitment under the White House Conference on Hunger, Nutrition, and Health which was held in September 2022, during fiscal 2023 we helped 100,000 eligible neighbors enroll in SNAP benefits and launched two health campaigns to increase awareness of federal nutritional guidelines.

The following discussion is a summary of certain material arrangements, agreements and transactions we had with related parties during fiscal 2023. These transactions include, amongst others, professional advisory, consulting and other corporate services.

Our Board has adopted a written policy (the “Related Persons Transaction Policy”) and procedures for the review, approval or ratification of “Related Party Transactions” by the Audit Committee. Under the Related Persons Transaction Policy, a “Related Party Transaction” is defined as any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including the incurrence or issuance of any indebtedness or the guarantee of indebtedness) in which (1) the aggregate amount involved will or may be reasonably expected to exceed $120,000 in any fiscal year, (2) we or any of our subsidiaries is a participant and (3) any related party has or will have a direct or indirect material interest.

Prior to the Company entering into any Related Party Transaction, it is reported to the Company’s General Counsel who undertakes an evaluation of the Related Party Transaction. The General Counsel then reports the findings of the evaluation to the Audit Committee, including a summary of material facts. The Audit Committee reviews the material facts of all Related Party Transactions which require the Audit Committee’s approval and either approves or disapproves, subject to the exceptions described below. If advance notice of a Related Party Transaction has been given to the Audit Committee and it is not possible to convene a meeting of the Audit Committee, then the Chairman of the Audit Committee will consider whether the Related Party Transaction is appropriate and, if it is, will approve it and present it to the Audit Committee for ratification at the next regularly scheduled meeting. In the event the Audit Committee does not ratify any such Related Party Transaction, management shall make all reasonable efforts to cancel or annul such Related Party Transaction. In the event the Company becomes aware of a Related Party Transaction that was not previously approved or ratified under the Related Persons Transaction Policy, the Company will promptly notify the Chairman of the Audit Committee, and the Audit Committee (or, if it is not practicable for the Company to wait for the Audit Committee to consider the matter, the Chairman) will consider whether the Related Party Transaction should be ratified or rescinded or other action should be taken, with such review considering all of the relevant facts and circumstances regarding the Related Party Transaction. The Chairman will report to the Audit Committee at the next regularly scheduled meeting of the Audit Committee any actions taken under the Related Persons Transaction Policy. The Audit Committee will also review all of the facts and circumstances pertaining to the failure to report the Related Party Transaction to the Audit Committee and will take, or recommend to the Board, any action the Audit Committee deems appropriate.

Related Party Transactions

We paid Cerberus Technology Solutions, an affiliate of Cerberus, fees totaling approximately $5.5 million during fiscal 2023 for information technology advisory and implementation services in connection with modernizing our information systems.

We paid Cerberus Operations and Advisory Company, LLC, an affiliate of Cerberus, fees totaling approximately $0.1 million during fiscal 2023 for consulting services provided in connection with improving the Company’s operations.

Duane Morris, spouse of Susan Morris, our EVP – Chief Operating Officer, owns 50% of Catalyst Retail Solutions (“Catalyst”), a food brokerage company. Mr. Morris represented manufacturers of items sold in select Company stores totaling approximately $8 million in cost. Catalyst received $240,000 as consulting fees from the manufacturers during fiscal 2023.

	PROPOSAL 2:  Ratification of the Appointment of the Independent Registered Public Accounting Firm
	The Audit Committee has appointed, and our Board has ratified the appointment of, Deloitte and Touche to serve as our independent registered public accounting firm for the fiscal year ending February 22, 2025. We are not required by our bylaws or applicable law to submit the ratification of the appointment of Deloitte and Touche for stockholder approval. However, as a matter of good corporate governance, we are seeking stockholder ratification of the appointment of Deloitte and Touche. If the stockholders do not ratify the appointment of Deloitte and Touche, the Audit Committee may consider the appointment of another independent registered public accounting firm. Even if the selection is ratified, the Audit Committee, in its discretion, may appoint a different independent registered public accounting firm if it believes that such a change would be in the best interests of the Company and our stockholders.   One or more representatives of Deloitte and Touche are expected to attend the Annual Meeting. They will have the opportunity to make a statement if they so desire and will be available to answer appropriate questions. See “Fees Paid to Independent Registered Public Accounting Firm” on page 33 for the fees paid to Deloitte and Touche during fiscal years 2023 and 2022.
		Our Board recommends that stockholders vote “FOR” the proposal

	PROPOSAL 3:  Advisory (Non-Binding) Vote to Approve the Company’s Named Executive Officer Compensation
	As required by Section 14A of the Exchange Act, the Company is providing stockholders with an opportunity to cast an advisory vote on the compensation of our NEOs as disclosed in the CD&A, the compensation tables, narrative discussion, and related footnotes included in this proxy statement.   While the vote is advisory, and therefore non-binding on the Company, the Compensation Committee values the opinions of our stockholders and will consider the outcome of the vote when planning future executive compensation decisions.   As discussed in more detail in the CD&A, our executive compensation program is designed to attract and retain a talented team of executives who can deliver on our commitment to build long-term stockholder value. The Compensation Committee believes our program is competitive in the marketplace and links pay to performance and long-term stockholder interests.   Accordingly, the Board recommends that you vote in favor of the following resolution:   RESOLVED, that the compensation paid to the NEOs in fiscal 2023, as disclosed in this proxy statement pursuant to the SEC’s executive compensation disclosure rules (which disclosure includes the CD&A, the compensation tables and the narrative discussion, and related footnotes that accompany the compensation tables), is hereby approved.
		Our Board recommends that stockholders vote “FOR” the proposal

The CD&A provides a description of the material elements of our executive compensation program, as well as perspective and context for decisions made regarding the compensation of our fiscal 2023 NEOs. To assist our stockholders in locating important information regarding our executive compensation program, the CD&A is organized into the following sections:

Our NEOs for fiscal 2023 were as follows:

2023 Say-on-Pay Result

Our stockholders have the opportunity each year to cast an advisory vote on the compensation we pay to our NEOs. At our 2023 annual meeting, our stockholders strongly supported our executive compensation program and the compensation paid to our NEOs during fiscal 2022. The Compensation Committee considers the level of voting support from our stockholders and uses this information, among numerous other factors, to inform compensation decisions.

The approval of the say-on-pay proposal by our stockholders since 2021 are as follows:

Fiscal 2023 Financial and Operational Highlights

Throughout fiscal 2023 we continued to execute against our four strategic priorities and delivered financial and operating results:

Our financial and operating highlights for fiscal 2023 include:

Our Executive Compensation Philosophy

We design our executive compensation program to attract, motivate, and retain high caliber talent. Each year the Compensation Committee reviews the existing incentive structure, taking into consideration individual contribution and leadership, business performance, and our strategic roadmap, in considering the efficacy of further enhancements.

The guiding principles of our compensation program are as follows:

Our Compensation Philosophy

Pay Mix Emphasises Performance

Consistent with our executive compensation pay philosophy, a significant portion of our CEO and other NEOs target compensation opportunity is tied to an appropriate balance of short- and long-term incentive components with linkage to rigorous goals to drive growth and stockholder value creation.

The charts below illustrate the pay mix at target levels of the various components of compensation for Mr. Sankaran and the other NEOs as a group for fiscal 2023:

Executive Compensation Best Practices

The Compensation Committee closely monitors emerging best practices in executive compensation for consideration in our compensation program. The chart below lists some of our compensation “best practices” and those we do not follow:

Overview of Fiscal 2023 Executive Compensation 

The following chart summarizes the components and associated objectives of our compensation program for fiscal 2023 for our NEOs. There were no changes in the design of our executive compensation program from that used in fiscal 2022.

Additionally, some of our executives, including our NEOs, have certain severance protections pursuant to their employment agreements. See “Potential Payments Upon Termination of Employment” for amounts payable to the NEOs under certain termination scenarios. Consistent with standard business practice, our NEOs also receive business-related perquisites, and benefits that are provided to all employees, including healthcare benefits, life insurance, retirement savings plans, and disability plans.

Design of Our Executive Compensation Program

The design of our executive compensation program is consistent with our compensation philosophy noted above. We use various compensation elements to provide an overall competitive total compensation and benefits package to the NEOs that is tied to creating value, is commensurate with our results, and aligns with our business strategy. Set forth below are the key elements of the compensation program for the NEOs for fiscal 2023:

Base Salary

We provide our NEOs with a base salary to compensate them for services rendered during the fiscal year. In alignment with our pay-for-performance philosophy, base salary represents the smallest portion of annual total compensation.

The base salary component of our compensation program is designed to attract and retain key talent and is determined by the Compensation Committee based on a variety of factors including: