Target Cuts CEO Cornell's Pay by One-Third After Difficult Year

(Bloomberg) -- Target Corp. Chief Executive Officer Brian Cornell got no bonus and saw his pay cut by one-third after a year marred by disappointing sales, customer defections and executive departures.

Cornell's compensation declined 33 percent last year to $11.3 million, most of which came from stock awards valued at $9.65 million, according to a proxy statement filed Monday. The company said management fell “well short” of sales and profit targets.

Cornell has grappled with the aftermath of a poor holiday season, when customers increasingly chose to shop at rivals like Wal-Mart Stores Inc. or online through Amazon.com Inc. Target's heads of marketing, digital, grocery and innovation have all left during the past year. To cope with the slowdown, Cornell is reducing prices, refurbishing stores and introducing new brands in areas like apparel. The plan hasn't appeased investors, who have pushed the shares down 23 percent this year.

While Cornell's pay declined in each of the past two years, rival Wal-Mart CEO Doug McMillon earned $22.4 million in 2016, up 13 percent from the previous year. Wal-Mart has posted 10 consecutive quarters of positive U.S. same-store sales.

Cornell's performance-based equity awards pay out over three years and are based on hitting stock price targets and other financial goals. Chief Financial Officer Cathy Smith and operations chief John Mulligan did receive cash bonuses because they were based on a broader set of measures including website performance and growth in key categories like baby and wellness. Mark Tritton, the Minneapolis-based company's new head of merchandising, received $5.2 million in total compensation, including a $500,000 sign-on bonus.

To contact the reporter on this story: Matthew Boyle in New York at mboyle20@bloomberg.net.

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Lisa Wolfson