Target Corp. had a banner year in 2020, one that led to its chief executive receiving $77.5 million in compensation.
Brian Cornell made $21.6 million in the prior fiscal year.
Strategic work implemented before the pandemic laid the groundwork for success during the pandemic. Minneapolis-based Target's sales increased by $15 billion during the year.
Target stayed ahead of ahead of competitors thanks to investments in fulfillment and e-commerce that helped the company shift to different ways people were shopping faster than most.
Cornell's base salary remained the same at $1.4 million and he and other executives earned maximum short-term incentive-plan payments for achieving goals on sales and operating income and maximum Team Scorecard payments for achieving other strategic measures. Cornell's two annual incentive payments were $5.6 million.
Most of Cornell's compensation came in the form of long-term equity awards that were granted in previous years but either vested or were exercised by Cornell in fiscal 2020, a combined $70 million worth.
Of that total $40.8 million came from restricted stock that vested during the year. The value of those awards were based on performance against retail peers and the stock's total return, which rose 67% in the last year and 170% over the last three years.
Cornell realized another $29.2 million from the exercise of a special grant of stock options in May 2017 that were meant to drive the executive team and Cornell through new strategic directions for the company.
They were price-vested stock options granted at $55.60 per share. So in addition to a normal three-year vesting schedule, Target's share price had to trade above $75 per share for 20 consecutive days.
Those options had seven years to achieve that $75 share price threshold, but the company achieved that hurdle on June 29, 2018, as progress was achieved faster than Target had expected.
Cornell ended up exercising those options in August at prices between $152 and $155.88 per share.
Some of those goals included store openings and refurbishments, supply-chain improvements, and technology investments, which all ended up playing key roles in Target's success in the pandemic.
The CEO pay ratio: A comparison of the CEO's pay to that of the median employee in an organization was 805-1, down from the year before when it was 821-1.
The CEO pay ratio includes the CEO's total compensation from the summary compensation table of the proxy that includes salary, bonuses, miscellaneous compensation and the grant date value of long-term equity awards. The realized value of those long-term equity awards will differ from the grant date value depending on the performance of the company and the stock price during the period those awards vest.
Cornell's total compensation for 2020, according to the proxy and used in the CEO pay ratio, was $19.8 million, a 4.3% increase over the prior year. The median employee compensation increased 6.3% to $24,535.
Target did not lay off, furlough or reduce compensation of its store employees through the year. Instead, it handed out five rounds of bonuses to rank-and-file employees as they adjusted to changing conditions and adopted new ways to work.
In all, Target would spend about $1 billion on bonuses, new and increased employee benefits, and health and safety investments for its employees during the year. The company also accelerated its move to a $15 per hour starting wage for employees.
The increased bonuses totaled $200 million including payments in April 2020 for 20,000 store team leaders ranging from $250 to $1,500 for overseeing store operations and $200 bonuses for all hourly and full-time workers in July.
Another round of $200 bonuses were made to more than 350,000 front-line workers in October. In January, more than 375,000 workers, including seasonal employees, received bonuses ranging from $500 to all hourly workers and $1,000 to $2,000 to front-line team leaders.
Patrick Kennedy • 612-673-7926
