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Target taps Cornell of PepsiCo as CEO, chairman [Star Tribune (Minneapolis) :: ](Star Tribune (Minneapolis, MN) Via Acquire Media NewsEdge) July 31--Target Corp. on Thursday named Brian Cornell, a senior executive at PepsiCo Inc., to be its new chief executive, becoming the first outsider to lead the nation's fourth-largest retailer. Cornell, 55, will also become the chairman of the Minneapolis-based company's board, a role played by all of Target's previous CEOs. He succeeds Gregg Steinhafel, who was fired in May after nearly six years as CEO and five as chairman as the company struggled under the weight of missed sales expectations, a rocky expansion into Canada and a massive data breach. "We focused on identifying an extraordinary leader who could bring vision, focus and a wealth of experience to Target's transformation," Roxanne S. Austin, Target's interim chairwoman and leader of the search committee, said in a statement. Target shares closed down 2.92 percent on a day when the broad market fell 2 percent. In a research note, Faye Landes with Cowen and Co., noted that Cornell is a good presenter and is rare among retail CEOs in that he attended business school. Her firm upgraded its rating of Target's stock to market perform but also raised questions. "Cornell has no turnaround experience that we know of," Landes wrote. Cornell resigned Wednesday as CEO of PepsiCo Americas Foods, where he led food and snack brands such as Quaker, Tropicana and Gatorade. Before he joined PepsiCo in March 2012, he was president and CEO of Sam's Club, a unit of Wal-Mart Stores Inc. After leaving Wal-Mart, Cornell had a two-year agreement not to compete with the company, a deal that expired this March. Cornell also has experience with the Safeway grocery chain and arts-and-crafts retailer Michaels. He also has ties to the Twin Cities as a director at Polaris Industries Inc. since November 2012. The company offered Cornell a $36.6 million compensation package, including about $20 million in stock and bonus money to cover incentives he is leaving behind at PepsiCo. His base salary of $1.3 million will actually be less than Steinhafel's $1.5 million. Cornell flew to Minneapolis and met with employees and executives today. He plans to move to the Twin Cities and begin work Aug. 12. Cornell was unavailable for an interview, a Target spokeswoman said. In a comment issued by the company, Cornell stuck to Target's habit of using the word "guests" for customers. "I am committed to empowering this talented team to realize its full potential, lead change and strengthen the love guests have for this brand," Cornell said in the statement. On the company's blog, Cornell was quoted saying that he would make it a priority to beef up Target's digital efforts. "I have been close to the changes business and consumers have experienced over the last few years, and I have an acute understanding of how important it is to connect stores, online and mobile," Cornell said on the blog. David Strasser, an analyst with Janney Capital Markets, said Cornell has a "well-rounded resume to revitalize and re-energize Target." Gerald Storch, a retail consultant and former vice chairman at Target, said the board's quick action removes some uncertainty at Target before the start of the all-important holiday season. "It's very smart that the board hired someone rapidly and didn't allow the period of limbo to extend too long," he said. As for questions about Cornell's background, Storch said it's impossible to find someone who can check all of the boxes. "You're never going to get everything in one leader," he said. "But this shows they were looking for someone with charisma and a strong external persona." Steinhafel, a 35-year Target veteran, guided the firm out of the 2008 economic downturn but did nothing to shake up its plodding, insular culture, which became increasingly visible in its difficulties with new digital initiatives and an expansion in Canada. A data breach that went undiscovered for three weeks late last year, exposing financial information of tens of millions of customers to cyberthieves, reinforced Target's hidebound image. In the months since Steinhafel's departure, acting CEO John Mulligan has shaken up the executive ranks by appointing new leaders for the Canada business, a chief technology officer and a data security chief. He also began to move the company's top executives onto one floor at the firm's downtown headquarters building to improve communication. "We don't have any blinders on about the issues in our business," Mulligan, who was Target's chief financial officer under Steinhafel, said in late May when the firm announced its latest results. "We're going to move very quickly." Mulligan will stay on as CFO, the company said. Cornell becomes the fourth CEO of Target since the early 1980s when the business became the biggest operating unit of the then-Dayton Hudson Corp. and its founding family, the Daytons, ended their involvement. Ken Macke led the firm from 1981 to 1994. Bob Ulrich led it from 1994 to 2008, when he was succeeded by Steinhafel. Kavita Kumar -- 612-673-4113 ___ (c)2014 the Star Tribune (Minneapolis) Visit the Star Tribune (Minneapolis) at www.startribune.com Distributed by MCT Information Services |