STORES Magazine - June 2011 - (Page 16)

EXECUTIVE SUITE / CEO COMPENSATION Bullish on Pay CEO salaries slip, but total compensation rose in 2010 BY SUSAN REDA, EDITOR T otal compensation for the top executives of the nation’s largest retail companies continued to grow in 2010 — significantly so, in some instances. Nevertheless, if a throng of CEOs met for dinner at some posh restaurant, it’s a safe bet that they wouldn’t expect the retail head honcho to pick up the tab. Median pay for the top executive at 50 publicly traded retail companies was $7.6 million in 2010, according to a study conducted for STORES by Equilar, a compensation consulting firm based in Redwood City, Calif. That represented a 3 percent decline from 2009, but average total compensation for those same CEOs rose 10 percent to $9.3 million. The CEOs included in the Equilar survey lead STORES Top 100 companies that had filed proxy statements by May 3, and who have been in their position at least two years. The list is meant to provide an industry snapshot rather than a panoramic view, particularly since a sizable portion of retail companies are privately held. Taking into account the study’s relatively small sample size, it would be imprudent to draw broad conclusions about industry compensation trends. Still, it’s interesting to note that in an Equilar survey of CEO compensation at 200 major corporations across a broad range of industries, median pay increased 12 percent (to $9.6 million) between 2009 and 2010. “Clearly, the retail segment doesn’t align with other busiSURVEY METHODOLOGY STORES commissioned executive compensation research firm Equilar to compile and analyze pay data from corporate filings. The data set provided here includes information on CEOs from leading retail sector companies selected by the magazine. nesses this year, but we saw the median pay rebound by 43 percent last year among retail CEOs when other segments endured flat to slight gains in compensation,” says Aaron Boyd, research manager for Equilar. “Looking back, you might say retail led the charge.” Boyd points out that 20 of the CEOs on STORES’ list realized double-digit increases in pay; three enjoyed triple-digit gains. “We see similarities between retail and other industries in that those CEOs who made it through the tough times are being rewarded, especially in cash bonuses and stock awards.” Through April, the retail sector has posted 10 consecutive months of sales gains. While the recovery has been slowmoving and the economic outlook remains fragile for reasons ranging from high unemployment to consumers’ shrinking disposable income, many retail CEOs reacted quickly when the recession hit, paring inventories and perfecting the art of doing more with less in the quest to achieve better margins. The highest-paid retail CEO on this year’s list is Target Corp.’s Gregg Steinhafel, whose total compensation of $23.5 million included $11.2 million in equity awards. Steinhafel, a former merchandising trainee, has managed to overcome numerous challenges and remain resolutely focused on merchandising. He has led a sharp turnaround in same-store sales, engineered an ambitious remodeling program, launched Target’s 5% REDcard Rewards and is overseeing rollout of the new platform. Compensation Table of each company’s proxy statement. Change in pay for each executive is calculated using compensation data from the prior fiscal year. This data is collected in the same fashion described above. For recently hired or promoted CEOs, the year-over-year change in pay is listed as “n/a.” For each executive, total compensation is calculated as the sum of base salary, cash bonus payouts, the grant date value of equity awards and other compensation. Other compensation typically includes benefits and perquisites. All data is taken directly from the Summary 16 STORES / JUNE 2011 WWW.STORES.ORG http://WWW.STORES.ORG

Table of Contents for the Digital Edition of STORES Magazine - June 2011

Stores - June 2011
Editor’s Page
President’s Page
Retail People
CEO Compensation
Customer Service
Business Strategy
What We’ve Learned
Loss Prevention Supplier Directory
Customer Rewards
Business Management
Social Media
Planning Solutions
Loyalty Programs
Business Intelligence
Store Operations
Divisional Update
NRF News
Point of View
Retail Industry Calendar
End Cap

STORES Magazine - June 2011