Target Corp’s (TGT) CEO Brian Cornell took a sharp cut in compensation after the company failed to meet financial goals in a year marred by declines in sales and share price.
Cornell’s cash-and-stock compensation fell by nearly a third to $11.3 million, according to a document filed with regulators two months after the company reported results that sent its stock tumbling to 2-1/2-year lows.
In February, Target reported a steeper-than-expected fall in fourth-quarter sales and told Wall Street its sales and profit estimates for 2017 were too high.
As per Target’s short-term incentive plan, Cornell’s compensation is based on the performance of two financial metrics: incentive EBIT, which makes up 75 percent of Cornell’s stock component, with the rest based on adjusted sales.
Target said it missed its 2016 incentive EBIT goal of $5.74 billion by $623 million and fell short of its adjusted sales target of $71.62 billion by $2.13 billion.
Target’s stock lost about 10 percent of its value during the fiscal year ended Jan. 28.
In 2014, when Cornell joined Target, his total compensation was $28.2 million, 97 percent of which was in stock awards. By 2016, his stock component had plunged 65 percent to $9.7 million.
Chief Financial Officer Cathy Smith’s compensation for 2016 fell by 41.3 percent to $4.4 million, while Chief Operating Officer John Mulligan’s compensation fell by 32.7 percent to $7 million.
In contrast, bigger rival Wal-Mart Stores gave CEO Doug McMillon a 13 percent pay hike, following strong sales performance at the world’s largest retailer.