US Foods CEO steps down, company settles with investor investor Sachem Head

Scott Ferguson, Managing Partner and Portfolio Manager for Sachem Head Capital Management LP, presents during the 2018 Sohn Investment Conference in New York City, US, April 23, 2018. REUTERS/Brendan McDermid

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May 10 (Reuters) – US Foods Holding Corp (USFD.N) Chief Executive Officer Pietro Satriano has stepped down, the food distributor said on Tuesday on the same day it reached an agreement with Sachem Head Capital Management that ended one of the most high -profile corporate fights this year.

The agreement with the hedge fund includes the appointment of three new independent directors, including Sachem Head founder and portfolio manager Scott Ferguson, US Foods said.

Sachem Head, US Foods’ biggest shareholder with an 8.7% stake, had been for pushing for changes at the company since late last year, saying its performance was unsatisfactory and it had not improved operations as promised.

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The company’s stock price climbed 2.63% to trade at $35.54 on Tuesday.

US Foods, helmed by Satriano since 2015, has struggled to boost profit margins to keep in line with competitor Sysco Corp (SYY.N) due to runaway inflation and supply chains being disrupted during the COVID-19 pandemic.

Andrew Iacobucci, who has served in several senior roles at the company, will be appointed interim chief executive. Since 2021 he has been US Foods’ chief commercial officer and before that he was chief merchandising officer.

The company also announced new financial incentives to help retain chief financial officer Dirk Locasio while it searches for a permanent CEO.

Satriano’s exit marks the second time in less than two weeks that a CEO at a prominent US company has left in the wake of a challenge by an activist investment firm. On Friday, Southwest Gas Holdings replaced John Hester as CEO in a settlement with billionaire investor Carl Icahn.

After next week’s annual meeting, US Foods’ board will have 13 members, all of whom are independent. Two Sachem Head directors, Scott Ferguson and David Toy, will join the committee to find a new CEO. Satriano will not stand for re-election.

Reuters reported Sachem Head’s advanced talks to drop a board challenge against US Foods on Monday. read more

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Reporting by Uday Sampath in Bengaluru; Editing by Shinjini Ganguli and Will Dunham

Our Standards: The Thomson Reuters Trust Principles.

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