(Saint Paul Pioneer Press (MN) Via Acquire Media NewsEdge) May 19--Under fire for its lavish executive pay, Target Corp. said it cut CEO Gregg Steinhafel's pay by 37 percent in 2013 -- but still gave him a $15.9 million golden parachute after his "involuntary termination" this month.
In a filing Monday with the U.S. Securities and Exchange Commission, Target conceded that shareholders have been unhappy with its pay policies, especially given the discount chain's weak performance. So the board axed Steinhafel's bonus for 2013, froze his salary and scaled back a big pension perk.
Even so, Steinhafel wasn't exactly destitute. In 2013, the Minneapolis-based retailer granted its then-CEO $12.9 million in salary, stock, pension and perks, including $113,000 of personal use of the company jet.
Then two weeks ago, Target dismissed Steinhafel. It awarded him a severage package worth $15.9 million -- plus whatever Steinhafel earns between now and August.
He "has agreed to remain employed by Target in an advisory capacity to assist with the transition through no later than August 23, 2014," the filing said. "During this advisory period, he will continue to receive the same base salary and benefits that were in effect on the date he stepped down as President & CEO."
Steinhafel's departure was announced May 5, following a massive data breach, a troubled Canadian rollout and weaker-than-anticipated results. A search is now underway for a permanent CEO, board chairman and president, all jobs held by Steinhafel.
While Target's proxy stressed a tougher attitude toward executive pay, some shareholders wanted more. Shareholder Richard Will of Warminster, Pa., proposed that Target's executive perks be eliminated, and will bring the matter to a shareholder vote next month.
For most workers, Will wrote, receiving money for "car use, personal use of company aircraft ... home security expenses, on-site parking, on-site exercise room, spousal travel on business trips, gifts and executive physicals would be against regulations or even illegal and could result in dismissal."
But Target's board defends those perks, saying they allow executives to "devote more time to our business." And it notes that the perks are taxable, too.
Another shareholder urged that Target adopt an independent chairman, and stop installing its CEO as chairman of the board.
Target's board responded that it has discussed the matter, deciding "at this time is not in the best interests of Target."
Monday's SEC filing label's Steinhafel's departure "an involuntary termination for reasons other than for cause," and outlines a severance package worth $21.3 million, but notes that he must pay back $5.4 million in early retirement benefits.
Steinhafel's 2013 compensation was down from $20.6 million a year earlier.
Tom Webb can be reached at 651-228-5428. Follow him at twitter.com/TomWebbMN. Nick Woltman can be reached at 651-228-5189. Follow him on Twitter at @nickwoltman.
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