Target’s declining sales and tumbling stock price, which dropped from a high of $82.76 in April of 2016 to a low of about $54.78 in April of this year, has spurred its board of directors to slash CEO Brian Cornell’s salary by nearly a third 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.”
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 compensation cut was only fair.
“You shouldn’t be getting rich when you are producing rotten numbers,” he said.
To be clear, $11.3 million per year is still far more than Cornell deserves, especially considering his stubborn refusal to back down even after backlash against Target’s transgender bathrooms began brewing last year. He even had the audacity to try comparing his decision to let people — including, potentially, sexual predators — use the bathroom of their choice with the civil rights movement.
It should be noted that when Cornell first joined Target in 2014, his earnings were $28.2 million; his pay has dropped by over 40 percent in a matter of just three years, according to Fortune magazine.
It wasn’t until April of this year that Cornell reportedly finally began expressing frustration with the company’s transgender bathrooms policies that he had helped articulate, but by then the damage had already been done.