EXHIBIT 10.4
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THE KROGER CO. | 1014 VINE STREET | CINCINNATI, OHIO 45202-1100 |
Date: August 24, 2026
To: Mark Ibbotson
From: Greg Foran
Subject: Executive New Hire
Mark,
We are pleased to offer you the position of EVP, Chief Store Operations Officer effective September 14, 2026 reporting to me. The position will be based in Cincinnati, Ohio.
Your annual salary will be $1,000,000 with an annual incentive plan target of 110% of base pay (prorated based on your date of hire). You will be eligible for an annual salary merit review in April of each year beginning April 1, 2027. The annual incentive plan is currently paid out in March of each year based on prior year company performance as described in the plan for that year. To receive an annual incentive payout, you must be an active associate on the last day of our fiscal year for which the incentive was earned.
On the first of the month following your date of hire, you will be eligible for our comprehensive health care plans along with, stock purchase and life and income protection plans. You will also be eligible for 5 weeks of vacation, with the amount pro-rated in 2026 based on your date of hire. As an executive of the company, your benefits will also include long-term disability, deferred compensation, accidental death and dismemberment and the long-term incentive plan. Please review the executive benefits brochure you will receive after your hire date for complete details.
You will be awarded a special grant of $2,500,000 in restricted shares and performance units (split equally). The restricted shares will vest ratably over 3 years (one-third per year from the date of grant). The performance units will align with the 2026-2028 Long-Term Incentive Plan and payout at the end of the measurement period in March 2029. You will also be awarded a special grant of $1,000,000 in restricted shares that will vest ratably over 2 years (one-half per year from the date of grant). These special grants will be awarded in December 2026, based on Equity Awards Committee approval. Annually, in March you will be eligible for a long-term equity grant, commensurate with your role and based on meeting performance expectations in a fiscal year.
Assuming your performance is consistently delivering expectations, your annual grant amount will be $5,000,000. The 2027 grant award mix will align with other members of the executive team which is typically 20% stock options, 30% restricted shares and 50% performance units.
A policy for a standard general severance benefit for officers of the company is currently under review by the Compensation and Talent Development Committee. We expect that this policy will be market competitive for an Executive Vice President. You will also be covered by the Kroger Employee Protection Plan for Change in Control Severance Benefits.
To more closely align the interests of Kroger’s officers and directors with those of our shareholders, the Board of Directors has adopted stock ownership guidelines. These guidelines require non-employee directors, executive officers, and other key executives to acquire and hold a minimum dollar value of Kroger common shares within 5 years of entering a role subject to these requirements. The target value of stock ownership for your role equals 3 times your base salary.
Until the ownership requirements are met, you must hold 100% of common shares issued, including performance units earned and shares received upon the exercise of stock options or upon the vesting of restricted stock, except those necessary to pay the exercise price of the options and/or applicable taxes. While working to achieve your target level of ownership, you must also retain all Kroger common shares unless a disposition is approved by the CEO.
In addition, you are eligible to participate in the company’s relocation program. You will be provided up to 90 days of temporary housing in Cincinnati, Ohio.
As an officer of the company, you are ineligible for any tax gross ups with the exception of relocation expenses.