Retail

Target CEO 2016 Compensation Down Close To One-Third

Target, the embattled retailer that is seeing Amazon steal its market share, lowered the compensation for its Chief Executive Brian Cornell.

According to a report analyzing the company’s Securities and Exchange Commission Form 8-K filing, Cornell’s compensation declined by nearly one third in 2016 to $11.3 million compared to 2015. A lot of the compensation the CEO was slated to get in stock was tied to the retailer’s incentive EBIT and adjusted sales growth, noted the report.

How Target is performing compared to its peers is also taken into account when coming up with the CEO’s compensation, the report stated. For the past 52 weeks, Target’s stock has declined more than 30 percent.

In March, Target reported comparable sales dropped 1.5 percent — the bottom of Target’s projected range. Physical stores had a sadder story to tell: a 3.3 percent decline at locations open for at least a year, during its fourth quarter of 2016.

The holiday shopping quarter also saw revenue drop 4.3 percent to $20.7 billion, which was the predicted decline by S&P Global Market Intelligence estimates. Net earnings at Target Corporation saw the biggest miss — down 42.7 percent to $817 million, reflecting an earnings per share of $1.46. Those figures trailed expectations of $854 million and $1.51. The retailer’s revenue also missed expectation — $20.69 billion versus $20.7 billion expected by Thomson Reuters.

Target’s gross margin also took something of a beating during Q4 — the combined outcome of heavy discounting and pick-ups in digital sales. The web accounted for 6.8 percent of the company’s sales in the fiscal fourth quarter, up from just 5 percent one year earlier.

And, in the even rougher news department — Target Corporation is expecting it is going to get darker before it gets brighter. The retailer is predicting earnings of $3.80 to $4.20 a share in 2017, a notable step-off from $5.37 a share Wall Street was looking for. That reflects expectations for a low single-digit decline in comparable sales.

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