Target Doubles Bonuses for Salaried Employees as Profits Recover
Target will double its bonus payments to salaried employees this year, as the big-box retailer’s profits recover from a bumpy nearly two-year stretch, reports CNBC. In a statement, Target said the annual bonus payout is based on how the retailer performs against sales and profit goals set at the beginning of the fiscal year. Salaried employees at the Minneapolis-based retailer receive an annual bonus, based on Target’s performance and the eligible amount set as part of their compensation. The retailer will pay 100 percent of employees’ eligible annual bonus amounts for the most recent fiscal year, a company spokesperson said Thursday. That's an increase from 50 percent in the prior year. Target will pay out the annual cash bonuses in late March. The amount paid out won’t be as high as it could be, however. It tops out at 175 percent of each employee’s eligible bonus amount.
Total Retail's Take: After a rough two-year stretch recovering from the COVID-19 pandemic, some Target employees are reaping the rewards of the company's improved profits and margins. How is Target able to pay out larger bonuses? The retailer has kept a sharper focus on inventory and some of its costs, such as freight, have fallen. For 2024, Target said it anticipates comparable sales will be flat to up 2 percent. However, Target said it expects business challenges will continue. The company has faced inventory troubles, weaker discretionary spending, increased theft and supply chain costs, as well as declining holiday and e-commerce sales.
“Based on Target’s performance in 2023, including the $2 billion in additional profit growth our team delivered that exceeded the goals we set at the beginning of the year, we’re rewarding our team accordingly,” the company statement said. The vast majority of Target’s approximately 415,000 employees, such as those at its stores and warehouses, are paid hourly and do not qualify for the bonuses. Yet it does offer bonuses to store and supply chain leaders, along with many corporate employees. Top executives at Target have a different bonus structure.
Like many large organizations, Target's bonuses are primarily being paid out to its corporate workers. It's interesting to note the re-emergence of the importance of brick-and-mortar success for retailers post-pandemic, which relies on the manpower of great store associates; yet, these hourly workers will not reap the same rewards as their corporate counterparts. Including hourly employees in company-wide bonus payouts could be a great way for retailers to attract and retain top talent for stores.
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Kristina Stidham is the digital content director at Total Retail and sister brands Women in Retail Leadership Circle and Women Leading Travel & Hospitality at NAPCO Media. She is passionate about digital media and handles video, podcast and virtual event production for all brands. You can often find her at WIRLC, TR, WLT&H or industry events with her camera and podcasting equipment—or at home on Zoom—recording interviews with thought leaders and business executives.
Kristina holds a B.A. in Media Studies and Production from the Temple University Klein College of Media and Communication in Philadelphia. Go Owls! When she's not in the office, she loves to go on long walks, sing around the house, hangout with her family and two pet guinea pigs, and travel to new places.
