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    Kroger CEO Gets $1 Million-plus Pay Hike

    CINCINNATI -- In a year which saw the Kroger Co. here reversing its fortunes and posting a profit of $958 million in 2005 vs. a $104 million loss a year earlier, the chain paid its top executive more than $6 million in cash and stock awards last year.

    CINCINNATI -- In a year which saw the Kroger Co. here reversing its fortunes and posting a profit of $958 million in 2005 vs. a $104 million loss a year earlier, the chain paid its top executive more than $6 million in cash and stock awards last year.

    The disbursement represents a raise in excess of $1 million for David Dillon, Kroger's c.e.o., who collected more than $3.1 million in salary, bonus, and other compensation, according to a U.S. Securities and Exchange Commission proxy statement. The company's compensation committee also awarded Dillon options on 300,000 shares, valued at $3.1 percent, based on a 5 percent appreciation rate. The shares are available at an exercise price of $16.39 and expire in 2015.

    The proxy statement also says Dillon exercised 172,000 shares in 2005, to realize almost $1.7 million.

    In 2004 Kroger paid Dillon a total of almost $5.2 million, which included options on 300,000 shares valued at almost $3.3 million, while in 2005 the majority of Dillon's raise came through his $1.9 million bonus, compared with a $736,361 bonus in 2004. The 2005 bonus is 132 percent greater than the $1.5 million that was established as his bonus potential, according to the proxy. Dillon's bonus was awarded because of Kroger's having exceeding its EBITDA goals, the company's same-store sales results, and the financial results of certain capital projects, according to the compensation committee report.

    Citing research by Mercer Human Resource Consulting, the committee further said that Dillon's $1.1 million salary is "below the median of competitor companies of similar size and complexity as Kroger."

    Kroger's annual shareholders meeting is set for June 22, during which nine proposals will be voted on, including an annualized election of all directors; the elimination of the 75 percent voting majority requirement for key decisions; a shareholder request for improved reports on Kroger's environmental, social, and governance issues; and a shareholder request to adopt a more humane chicken-slaughtering method.

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