In a year when Target chairman and CEO Brian Cornell saw his compensation fall 47%, his annual incentive bonus increased because Target profits rebounded in 2023 despite a revenue decline. The main reason for the decline was he earned less from long-term equity awards that measure performance over three years.

Total compensation for year ended Jan. 31, 2024: $18,056,708

Salary: $1,400,000

Bonus: $831,600

Non-equity incentive plan compensation: $1,782,200

Other compensation: $469,038

Value realized on vested shares: $13,573,870

CEO pay ratio: 719 to 1

Median employee pay: $26,696

Total fiscal 2023 shareholder return: -10.9%

Note: This summer, Brian Cornell will celebrate his 10th anniversary as Target's chairman and CEO. Earlier this year, the company announced ambitious growth plans, and is planning to open 300 new stores with the goal of increasing annual revenue by $50 billion over the next 10 years.

A typical CEO's pay package is a mix of components that reward performance over different time periods. Last year, Cornell's realized compensation decreased 47% from $34.2 million in the previous year, which disguised some of the progress Target had made.

After six straight years of revenue growth, sales at Minneapolis-based Target fell 1.6% to $107.4 billion in the last fiscal year but efficiency measures, lower freight and fulfillment costs and a return to what Cornell calls "retail fundamentals" helped earnings increase almost 50% to $8.94 a share.

In 2022, the company was coming off a huge year spurred by pandemic spending, but shopping patterns shifted and Target was caught with a major inventory problem. Writing down that inventory took a big hit on profits. In 2023, the efficiency efforts saved the company about $500 million and focus on fundamentals helped Target's earnings rebound despite a dip in sales.

The rebound in 2023 earnings helped Cornell and other Target executives earn larger short-term incentive bonuses than they did the prior year. They achieved 93% of a bonus goal that was based on revenue and operating income and team scorecard metrics that include inventory management, team engagement and equity and inclusion measures.

The combination of financial and other metrics meant Cornell's bonus in 2023 increased 128% to $2.6 million.

A big reason for the decline in Cornell's realized compensation in 2023 was the value of performance share units and performance-based restricted stock units that were realized during the year. The realized value of the awards was less than the prior year because Target's performance against three-year performance goals were not as strong as the prior year.

In prior years, Target executives got a supplemental long-term equity award called the Durable Model Award that was meant to drive a durable financial plan for Target. Those awards were successful in helping spur change at Target but finished paying out in fiscal year 2022. There were no Durable Model Awards to vest in 2023.

As a result of the depressed value of Target's shares and the expiration of the additional long-term incentive component, the value of Cornell's realized equity awards declined from $31 million to $13.6 million.