01—Abstract
Summary
Summary of the 8-K filed February 9, 2024. Cited figures are marked; the original filing is the authoritative source.
On February 6, 2024, Costco announced that CFO Richard Galanti will step down effective March 15, 2024, after nearly forty years in the role.
Gary Millerchip, formerly SVP and CFO of The Kroger Co., will succeed him as Executive Vice President and Chief Financial Officer, effective March 15, 2024. The Board appointed Millerchip as an Executive Vice President effective February 29, 2024. Galanti will remain an Executive Vice President and a Board member, and the press release says he will stay with the company through January 2025 in an advisory role to assist with the transition.
The filing discloses Millerchip's compensation package. It includes a $900,000a base salary, eligibility for a prorated annual cash bonus under the Fiscal 2024 Executive Bonus Plan, and performance-based RSU grants. The first grant, around March 11, 2024, has a $2.8 million target value, and the next company-wide grant in October 2024 has a $5.6 million target value.
To offset forfeited compensation from Kroger, he will receive a $4 millionb cash payment, of which $2 million is repayable if he is not employed on March 1, 2025 and $1 million is repayable if he is not employed on March 1, 2026. He will also receive a $7 million target-value RSU grant vesting over three years. For investors, the transition is orderly and planned, since Galanti is staying on in an advisory and Board role, and the incoming CFO brings large-company retail finance experience.
The filing does not disclose any change in Costco's financial results, guidance, or operations. The primary items to monitor are execution during the handover and the retention terms built into Millerchip's pay.
02—Key points
Key Highlights
- CFO transition: Richard Galanti steps down as CFO effective March 15, 2024, after nearly forty years of service, and remains an Executive Vice President and Board member.
- New CFO: Gary Millerchip, 52, joins as EVP effective February 29, 2024 and becomes CFO effective March 15, 2024. He was SVP and CFO of The Kroger Co. from April 2019 to February 2024.
- Base compensation: Millerchip's annual base salary is $900,000, with eligibility for a prorated Fiscal 2024 executive cash bonus.
- Equity awards: Target-value RSU grants of $2.8 million (around March 11, 2024) and $5.6 million (from the October 2024 company-wide grant), vesting over five years and subject to performance conditions.
- Make-whole package: A $4 million cash payment ($2 million repayable if not employed on March 1, 2025; $1 million repayable if not employed on March 1, 2026) plus a $7 million target-value RSU grant vesting over three years to offset forfeited Kroger compensation.
- Transition support: Per the press release, Galanti will stay through January 2025 in an advisory role to assist Millerchip during the transition.
- No financial impact disclosed: The filing covers executive changes only and includes no results, guidance, or operating updates.
03—Questions
Frequently Asked Questions
Why is Costco's CFO changing?
Richard Galanti has confirmed his intention to step down as CFO effective March 15, 2024, after nearly forty years with the company. He will remain an Executive Vice President and Board member, and per the press release will stay through January 2025 in an advisory role to support the transition.
Who is Gary Millerchip?
Gary Millerchip, age 52, was Senior Vice President and CFO of The Kroger Co. from April 2019 to February 2024. He spent 15 years at Kroger, including as CEO of Kroger Personal Finance from July 2010, and previously spent more than 20 years in banking, most recently with NatWest Group (formerly Royal Bank of Scotland) in the U.K.
How is Millerchip being compensated?
His package includes a $900,000 base salary, eligibility for a prorated annual cash bonus, and performance-based RSU grants with a $2.8 million target value in March 2024 and $5.6 million target value from the October 2024 grant onward, vesting over five years. To offset forfeited Kroger compensation, he will receive a $4 million cash payment, subject to partial repayment if he leaves by March 2025 or March 2026, and a $7 million target-value RSU grant vesting over three years.
Does this announcement affect Costco's financial performance?
The filing does not report any financial results, guidance, or operational changes. It addresses executive leadership and compensation only, so there is no direct financial impact disclosed in this 8-K.
What should investors watch as the transition proceeds?
Investors may watch for a smooth handover between Galanti and Millerchip through March 15, 2024, Galanti's advisory role through January 2025, and whether Millerchip stays through the March 2025 and March 2026 repayment dates. Any future 8-K filings or proxy disclosures would provide further detail on his role and compensation.
04—Continue