8-KLeadership ChangesRegulation FDExhibits & Filings

COSTCO WHOLESALE CORP /NEW 8-K Report, Executive Changes (Feb 9, 2024)

Filed February 9, 2024For Securities:COST

Summary

Costco Wholesale Corporation announced a significant leadership change within its finance department, with long-time Chief Financial Officer Richard Galanti set to retire on March 15, 2024. Mr. Galanti, who has served nearly forty years, will transition to an Executive Vice President role and remain on the Board of Directors. This transition marks the end of an era for a key executive who has been instrumental in Costco's financial strategy and growth. The company has appointed Gary Millerchip as the new Executive Vice President and CFO, effective March 15, 2024. Mr. Millerchip brings extensive experience from his previous role as Senior Vice President and CFO of The Kroger Co. His compensation package includes a base salary, annual bonuses, and substantial restricted stock unit (RSU) grants, reflecting the company's investment in its new CFO. These grants include an initial RSU grant of $2.8 million and a subsequent annual grant of $5.6 million, with additional RSUs totaling $7 million as a signing bonus, all subject to vesting and performance conditions.

Key Highlights

  • 1Richard Galanti, Costco's CFO for nearly 40 years, will retire from his CFO role on March 15, 2024.
  • 2Galanti will remain with Costco as an Executive Vice President and a member of the Board of Directors.
  • 3Gary Millerchip has been appointed as the new Executive Vice President and CFO, effective March 15, 2024.
  • 4Millerchip's prior experience includes serving as SVP and CFO of The Kroger Co.
  • 5Millerchip's compensation includes an annual base salary of $900,000, bonus eligibility, and significant RSU grants totaling $9.8 million initially ($2.8M near start date, $5.6M in October 2024) plus a $7M signing RSU grant.
  • 6The RSUs have staggered vesting periods (3-5 years) and are subject to performance conditions and continued employment.
  • 7The announcement was made via press release on February 6, 2024, and is included as an exhibit to the 8-K.

Frequently Asked Questions

Richard Galanti has been Costco's CFO for nearly forty years, a period that saw significant growth and financial evolution for the company. His long tenure makes his departure from the CFO role a notable event, although his continued presence as an Executive Vice President and Board member ensures continuity of his expertise.

Gary Millerchip will succeed Richard Galanti as CFO. Millerchip has a strong financial background, having served as Senior Vice President and Chief Financial Officer of The Kroger Co. from April 2019 to February 2024.

Gary Millerchip's compensation includes an annual base salary of $900,000, eligibility for annual cash bonuses, and substantial performance-based restricted stock unit (RSU) grants. This includes an initial grant valued at $2.8 million and a subsequent annual grant valued at $5.6 million, alongside a $7 million RSU signing grant to compensate for forfeited equity from his previous employer. These RSUs vest over three to five years and are contingent on continued employment and performance.

The filing primarily details a leadership transition and compensation. While Mr. Galanti will remain involved in a different capacity, the direct financial implications are centered around the new CFO's compensation package. Significant shifts in financial strategy are not explicitly detailed in this filing, but investors will likely monitor the new CFO's performance and any subsequent strategic communications.