Good morning. There’s more executive turnover in the Fortune 500.
Target CEO Brian Cornell is stepping down, and Michael Fiddelke, chief operating officer (COO), will become chief executive on Feb. 1, 2026. Cornell has led Target for 11 years. Fiddelke began his career at Target as an intern in 2003.
He served as CFO from November 2019 until February 2024, then was appointed COO—but held both roles until Jim Lee became finance chief last September. Fiddelke’s rise to the top comes as Target faces financial challenges and declining customer trust after backlash and boycotts related to its reversal on DEI efforts earlier this year. Foot traffic and revenue remain down.
Target reported another weak quarter on Wednesday with comparable sales down 1.9%, and reaffirmed its expectation of a low, single-digit sales decline for the year—projecting a third consecutive annual drop.
As my Fortune colleague Phil Wahba writes, “Though Fiddelke, 49, extolled the value of knowing Target deeply, shares fell 10% in morning trading on the news of his appointment. Citi analyst Paul Lejuez said investors were ‘hoping for an external CEO’ with fresh eyes. Target’s stock is down 64% since its all-time high four years ago.”
During the earnings call on Wednesday, Cornell said the board chose Fiddelke through a “deliberate and thoughtful” succession planning process over several years. The board evaluated his qualifications alongside a “strong list” of both external and internal candidates, he said.
Fiddelke said on the call that he’s eager to step into a role at a company he loves, but admitted, “I know we’re not realizing our full potential right now.” He called for a “clear and urgent commitment” to build new momentum and return to profitable growth.
I asked Shawn Cole, president and founding partner of executive search and consulting firm Cowen Partners, for his assessment of the internal hire. After 20 years at Target, Cole said Fiddelke was the safe and easy choice.
“Executive searches take time, and Target clearly wanted continuity over disruption,” he said. “When a brand is already struggling, boards often look inward for someone who knows the playbook, culture, and politics. The downside is exactly what we saw in the market reaction: investors were hoping for fresh eyes.”
From CFO to CEO
Fiddelke’s ascent at Target highlights a growing trend—moving from CFO to CEO, sometimes with a COO role in between. Research by leadership advisory firm Russell Reynolds Associates found that in the first half of this year, 173 CFOs were appointed—a seven-year high, up from 169 at the same time last year. The rise, fueled by more retirements and record CEO turnover in 2024, was especially prominent in the S&P 500 and ASX 200 indexes, according to the report.
“In this environment, with economic headwinds, tariffs, and margin pressure, the CFO seat has become a real launchpad,” Cole said. CFOs today are strategic operators with boardroom presence, and Fiddelke’s time as COO is significant, a traditionally strong source for CEOs.
What does Cole think Fiddelke must do to earn stakeholders’ trust? “He’s got to prove he’s not just another insider keeping the status quo alive,” he said. “Employees need to see culture and innovation tackled, investors want a turnaround story, and customers want excitement about shopping at Target again. If he plays defense, the market won’t forgive him.”
He added: “Bold moves are necessary, but former CFOs often tend to play it safe.”
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Fortune 500 Power Moves
Lau returns to Dollar General with over six years of previous experience at the company. Most recently, he was CFO of Zaxby’s Franchising LLC, starting in July 2023. Before leaving Dollar General in July 2023, Lau held several positions in the finance department, including SVP of finance and chief strategy officer. Earlier in his career, he held progressively senior roles in financial planning, investor relations, and corporate strategy at Yum! Brands, Inc.
Big Deal
However, only 30% of non-legal U.S. executives surveyed consider their legal team a critical business partner. In addition, just 22% of U.S. organizations have a single source of truth with governance in place to manage contract inventory, and data inconsistency may be a roadblock, according to the report.
Another finding is that 70% of the executives surveyed say generative AI is helping draft and review contracts more quickly.
Going deeper
"Starbucks’ CEO is ditching a merit system and giving all salaried staff a flat 2% pay raise instead" is a Fortune report by Nino Paoli.
From the report: "Starbucks CEO Brian Niccol is ditching a merit system in favor of a uniform 2% pay raise for all salaried employees in North America this year. The move comes as the coffee chain looks to limit costs while investments are funneled into turnaround efforts. Compensation experts tell Fortune that salary slowdowns are common amid economic uncertainty, but the 2% rate lags behind the national average." Read more here.
Overheard
"Artificial intelligence may end up being more impactful than the Industrial Revolution."
—John Nay, founder and CEO of Norm Ai, a regulatory compliance AI company, and Troy A. Paredes, a former commissioner of the U.S. Securities and Exchange Commission, write in a new Fortune opinion piece.
