Target Cuts CEO's Pay 33% After Disappointing Year
Target Corp. Chief Executive Officer Brian Cornell got no bonus and saw his pay cut by one-third after a year marred by disappointing sales, customer defections and executive departures. Cornell’s compensation declined 33 percent last year to $11.3 million, most of which came from stock awards valued at $9.65 million, according to a proxy statement filed Monday. The company said management fell “well short” of sales and profit targets. While Cornell’s pay declined in each of the past two years, rival Wal-Mart CEO Doug McMillon earned $22.4 million in 2016, up 13 percent from the previous year. Wal-Mart has posted 10 consecutive quarters of positive U.S. same-store sales.
Total Retail's Take: We often hear of retail executives being awarded bonuses — many times seemingly unassociated with their companies’ performances — but rarely do we see the opposite. Target's board of directors has closely tied Cornell's pay with meeting stock price targets, and the company failed to do so in 2016. Therefore, he didn't receive potential bonuses. Cornell has implemented a plan to turnaround Target, including reducing prices, renovating stores and introducing new private label apparel brands. However, so far the moves have done little to reassure investors. Target's shares are down 23 percent so far this year. I applaud Target for holding its top executives accountable for the performance of the company.