Supervalu Inc has hired Mark Gross to take over the nation’s fifth-largest grocery interest in hopes of turning the company around following a couple of very difficult years.
Gross and his experience will join Supervalu Inc on Friday
With over 20 years experience in the grocery business, lawyer Mark Gross will take over Supervalu following the retirement of Sam Duncan who has has run the company for the last three years. Duncan announced his decision to retire in October.
The 52-year-old Gross comes to Supervalu from Surry Investment Advisors, a consulting company that he started with a focus on the grocery industry.
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“He has assisted grocery clients on several multibillion-dollar acquisitions and divestitures and consulted with private-equity firms with respect to investments in food retail, distribution and consumer-packaged-goods sectors,” Supervalu said in a press statement.
Having seen its stock decline 36% this year following a 30% decline in 2015, investors will certainly hope that Mr. Gross’ experience can turn the company around quickly. He seems to have the pedigree in a fragmented industry especially if Suvervalu were to spin off or sell of its many assets doing business under different names.
The company hinted that was looking to spin-off its Save-A-Lot stores in July and following his hiring Gross said that Supervalu “continues to explore and prepare for a potential spin-off of Save-A-Lot.”
And the hiring of Gross might mean that the company will have a steady hand in the wheel if decides to sell or spin-off other properties.
“Mr. Gross’ 20 years of grocery and wholesale leadership experience appear to be a good match for [Supervalu’s] diversified business,” Stephen Grambling, a Goldman Sachs analyst, wrote in a research note Wednesday. “In addition, his experience in acquisitions and divestitures should be useful,” he continued.
Despite the pullback in the shares (-28% since 3Q earnings vs. S&P -2%), we are hesitant to become more constructive until Mr. Gross has an opportunity to discuss his own strategy amid deteriorating fundamentals across each segment and ongoing deflation. We remain Neutral rated.
Supervalu Inc – Gross’ experience and compensation
Gross received his law degree from the University of Pennsylvania after graduating from Dartmouth college and practiced law in New York City for seven years. He then worked for 10 years with New Hampshire-based C & S, a large grocery wholesaler where he went on to become a co-president in 2005 and 2006 before beginning his advisory company.
According to a filing with the SEC, Gross will receive a $300,000 signing bonus and a base salary of $1 million. Gross also received about $6 million in stock incentives at today’s price and an annual bonus with a minimum of zero, a target of 100% base salary and a cap at 200% of his $ 1 million salary.
“I am thrilled to join Supervalu,” Gross said in a press statement. “I am delighted to have the opportunity to help take the company to the next level.”