Chairman and CEO, Target Corp.
Total compensation: $21,621,120 for the year ended Feb. 1, 2020
Nonequity incentive pay: $3,322,667
Other compensation: $592,543
Value realized on vesting shares: $16,305,910
CEO pay ratio: 821-1
Median employee pay: $23,080
Total fiscal 2019 shareholder return: 61%
Note: Cornell’s total realized compensation decreased 4% from the previous year. The majority of his compensation, $16.3 million, came from previously issued restricted stock awards that vested in the last fiscal year. His base salary remained the same, and he earned an annual cash incentive award of $3.3 million. The incentive award represented 103% of the goal for the year but smaller than the previous year’s award.
Last year, Cornell and other executives were granted a new type of long-term incentive award called a Durable Model Award. Having invested heavily over the previous years in store improvements, fulfillment and employee pay, the award was made to encourage executives to sustainably grow Target’s revenue and profits in an era when retail sales continue to move online, including direct-to-consumer fulfillment.
The award supplements their usual performance share awards, and performance-based restricted stock unit awards but can be completely forfeited if executives leave or retire in the three years before the award vests. The award helped increase Cornell’s compensation as stated in the proxy’s summary compensation table to $18.9 million, a 10% increase over the prior year. That total is used to calculate the CEO pay ratio which was 821-1, a 7% increase over the prior year.
Cornell’s Durable Model Award was valued at $2.5 million. It is a restricted stock award that will vest in three years with the realized amount dependent on three financial goals including revenue, operating income and return on invested capital.
According to the proxy, the board of directors established the award such that “the performance goals are challenging relative to both our and our retail peers’ historical performance.”