Target continues to struggle with declining sales and a low stock price, which dropped from a high of $82.76 in April 2016 to a low of $54.78 in April 2017.
As a result, the company has been forced to trim the fat and part of that initiative will include cutting CEO Brian Cornell’s salary by 30 percent to $11.3 million.
“Cornell’s compensation was based on the performance of two financial metrics: incentive EBIT (earnings before income and taxes), which makes up 75 percent of Cornell’s stock component, and the rest on adjusted sales,” Reuters reported. “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.”
Conservative Tribune reports:
Many believed that these poor numbers stemmed from Cornell’s ill-advised embrace last year of transgender bathrooms. In fact, the decline in Target’s stock price started immediately after it announced last April that it would begin allowing customers to use whichever restroom made them feel comfortable.
Within a matter of only two weeks the stock tumbled by nearly $4 per share. As of early 2017, the decline was estimated to have cost the corporation at least $10 billion in market value.
Paul McConnell, managing director at executive compensation, performance and succession advisory group Board Advisory LLC, told Reuters that Cornell’s pay cut was fair.
“You shouldn’t be getting rich when you are producing rotten numbers,” he said.
When Cornell first joined Target in 2014, he receiving around $28.2 million for the year.
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