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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO
SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT
OF 1934
(Amendment No. )
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Filed by the Registrant
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Filed by a party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under § 240.14a-12
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TARGET CORPORATION
(Name of Registrant as Specified
In Its Charter)
(Name of Person(s) Filing Proxy
Statement, if other than the
Registrant)
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Payment of Filing Fee (Check all boxes that apply):
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No fee required
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Fee paid previously with preliminary materials
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Fee computed on table in exhibit required by Item 25(b) per
Exchange Act Rules 14a-6(i)(1) and 0-11
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Letter from our Lead
Independent Director
Dear Fellow Shareholders,
I’m grateful for the opportunity to represent you as Lead
Independent Director in 2022, a year that was even more
unpredictable than expected. On one hand, families began to emerge
from the pandemic, resuming traditions and routines that had been
delayed or diminished for two years. At the same time, families
were confronted with new challenges, most notably high inflation.
This complicated the return to pre-pandemic norms and forced
millions to focus on necessities and alter their shopping habits
accordingly.
Against this backdrop, Target’s Leadership Team adjusted quickly
with the best interests of stakeholders at heart, moving with rigor
and transparency to assess and modify internal operations and
priorities to stay in step with American shoppers.
During this volatile time, the Board’s combination of backgrounds
and collective wealth of oversight facilitated decisive action by
Target’s Leadership Team as it adapted to changing business
conditions. Individual directors’ specific knowledge in key facets
of global operations was also very useful. In addition to helping
Target navigate near-term challenges, we believe this mix is
critically important to governing long-term growth, including a
sustainability approach focused on using Target’s size and scale to
benefit people, the planet, and our business.
Cultivating leadership, investing in
team
Cultivating long-term leadership and investing in equitable
development were cornerstones throughout 2022. Target’s culture of
caring, growing and winning together helps the company attract,
retain, develop, and advance a diverse workforce, creating a
competitive advantage in its retail offering while contributing to
goals for greater equity and long-term social sustainability.
Throughout the year, Target built on its human-capital investments
by: setting a starting-wage range of $15 to $24 per hour; expanding
eligibility for health and retirement benefits to another 20% of
the Target team by reducing wait times and work hours required for
enrollment; and promoting equitable access to education and
inclusive career development through the tuition-free Dream to Be
education benefit for all Team Members.
These investments complement Target’s public goals for Diversity,
Equity & Inclusion. A known leader in DE&I, Target released
a new set of three-year goals last year after meeting or exceeding
goals set for 2019-2021. In the first year of the 2022-2024 goals,
Target made additional progress in building a workforce that
represents the communities it serves and in creating an inclusive
environment where all Team Members can feel a sense of belonging.
It also made progress on equitable business decisions aimed at
increasing relevance with diverse guests and supporting economic
inclusivity. The Board fully supports these efforts and the team’s
commitment to learning, adjusting, and ultimately meeting or
exceeding Target’s 2022-2024 DE&I goals.
In 2022, we also announced that CEO Brian Cornell intends to stay
in role beyond the traditional retirement age of 65. Considering
Target’s strategic clarity and strong financial performance during
his tenure, the Board enthusiastically supports Brian’s commitment
and continued leadership. Additionally, with Board oversight, three
long-time Team Members were elevated to the Leadership Team, three
other Leadership Team Members were given expanded responsibilities
during the fiscal year, and we supplemented internal talent
development by attracting Prat Vemana to join Target in the new
role of Chief Digital and Product Officer.
Board balance is core to
oversight
To continue to foster a diverse and relevant mix of governance
skills, we have strong policies in place to encourage regular Board
refreshment, add new perspectives or expertise, and provide
opportunities for members of historically underrepresented groups
to join our Board.
From director tenure, which deliberately balances the benefits of
longer service with fresh perspectives, to skill sets drawn from a
broad range of business disciplines, these qualities allow for
effective governance. As with other aspects of Target’s business,
Board composition reflects a commitment to DE&I and is
consistent with a strong history of gender and racial/ethnic
diversity at the Board level.
In 2022, Grace Puma joined the Board, providing significant
additional expertise in operations, global procurement,
supply-chain logistics, and risk management. In addition, we
previously announced that Mel Healey decided not to stand for
re-election and will leave the Board following the end of her term
at the 2023 Annual Meeting. We appreciate and thank Mel for her
service, collaboration, and insights, and wish her well in her
future pursuits.
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TARGET
CORPORATION  2023 Proxy Statement |
3 |
Looking to the future
Throughout last year’s unexpected volatility, Target’s culture was
at work, with the team’s commitment to our guests and communities
gaining strength in the face of new difficulties. We also saw the
Leadership Team’s determination to translate multi-year sales
growth and newfound scale into sustainable competitive advantages
with a strong focus on efficiency as a fuel for further growth.
That makes me optimistic about the shareholder value Target will
continue to deliver for years to come, and I wholeheartedly believe
that the confidence shareholders have shown in this company will
continue to be rewarded over the long term.
Sincerely,
Monica C. Lozano
Lead Independent Director
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TARGET
CORPORATION 2023 Proxy Statement |
4 |
Notice of meeting and
proxy summary
This Meeting Notice & Proxy Summary highlights information
described in other parts of this 2023 Proxy Statement and does not
contain all information you should consider in voting. Please read
the entire 2023 Proxy Statement carefully before voting.
For the meaning of capitalized
terms or acronyms used in
the 2023 Proxy Statement, please
see Appendix A “Commonly used
or defined terms” beginning on
page A-1.
To our shareholders,
You are invited to attend Target Corporation’s 2023 Annual Meeting
to be held as follows:
Time and Date
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Place
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Record Date
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Wednesday, June 14, 2023
9:00 a.m. Central Daylight Time
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Hotel ZaZa Austin
400 Lavaca Street
Austin, Texas 78701
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April 17, 2023
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Items
of
business
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Item
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Board’s Recommendation
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Election of 12 directors (page 19)
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FOR each Director
Nominee
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Ratification of Ernst &
Young LLP as our independent
registered public accounting firm (page
66)
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FOR
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Advisory approval of executive
compensation (Say on Pay) (page 68)
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FOR
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Advisory approval of the
frequency of our Say on
Pay votes (Say on Pay
Vote Frequency) (page 69)
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1 YEAR
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Shareholder proposals, if
properly presented at the
meeting (page 70)
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AGAINST each
proposal
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In addition, at the 2023 Annual Meeting we will conduct any other
business that may properly come before the meeting. See
Question 11 of the
“Questions and answers about the 2023 Annual Meeting” beginning on
page 75 for more information. Following the formal business of the
2023 Annual Meeting, our Chair & Chief Executive Officer will
provide prepared remarks, followed by a question and answer
session.
Proxy
solicitation
The Board solicits the enclosed proxy for the 2023 Annual Meeting
and any adjournment or postponement of the 2023 Annual Meeting. Any
proxy may be revoked at any time prior to its exercise at the 2023
Annual Meeting.
Voting
You may vote if you held shares of Target common stock as of the
record date (April 17, 2023). You are able to
vote your shares by providing instructions to the proxy holders who
will then vote in accordance with your instructions. We urge you to
read the 2023 Proxy Statement carefully and to vote in accordance
with the recommendations of the Board.
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TARGET
CORPORATION 2023 Proxy Statement |
5 |
Advance voting
If voting in advance of the 2023 Annual Meeting, you may do so as
follows:
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Method(1)
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Instruction
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•
Go to the website identified on the enclosed proxy card, VIF, or
Internet Availability Notice.
•
Enter control number on the proxy card, VIF, or Internet
Availability Notice.
•
Follow instructions on the website.
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•
Call the toll-free number identified on the enclosed proxy card or
VIF or, after viewing the proxy materials on the website provided
in your Internet Availability Notice, call the toll-free number for
telephone voting identified on the website.
•
Enter control number on the proxy card, VIF, or Internet
Availability Notice.
•
Follow the recorded instructions.
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•
Mark your selections on the enclosed proxy card or VIF.
•
Date and sign your name exactly as it appears on the proxy card or
VIF.
•
Promptly return the proxy card or VIF in the enclosed postage-paid
envelope so the proxy card or VIF is received before the
deadline.
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Deadline
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•
Registered Shareholders or Beneficial
Owners — 11:59 p.m. Eastern Daylight Time on June 13,
2023.
•
Participants in the Target
401(k) Plan — 6:00 a.m. Eastern Daylight Time on
June 12, 2023.
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(1)
Internet and Telephone voting is available 24 hours a day, seven
days a week up to the applicable deadline. If you are a Beneficial
Owner holding shares outside of the Target 401(k) Plan, you may
only vote by Internet and Telephone if your broker, trustee, bank,
or nominee makes those methods available to you. If you did not
receive a proxy card or VIF and would like to vote by mail, you
must request a physical copy of the proxy materials, which will
include a proxy card or VIF, by visiting www.proxyvote.com, dialing
1-800-579-1639, or emailing sendmaterial@proxyvote.com. If
requesting a physical copy of the proxy materials, please be
prepared to provide your control number, which can be found in your
Internet Availability Notice.
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Voting at the 2023 Annual
Meeting
If you do not vote in advance and instead plan to vote during the
2023 Annual Meeting, you may only do so if you follow the
instructions provided in Question 14 of the “Questions and answers
about the 2023 Annual Meeting” beginning on page 76 and you are
either a:
•
Registered Shareholder, or
•
Beneficial Owner and have obtained a legal proxy from your broker,
trustee, bank, or nominee.
Please note if you are a Beneficial Owner and request a legal
proxy, any previously executed proxy will be revoked, and your vote
will not be counted unless you appear at the 2023 Annual Meeting
and vote in person or legally appoint another proxy to vote on your
behalf. Shares held within the Target 401(k) Plan may only be voted
by the trustee pursuant to voting instructions received in advance
of the 2023 Annual Meeting, and may not be voted by a participant
at the 2023 Annual Meeting.
Questions and
answers about the 2023 Annual Meeting
We encourage you to review the “Questions and answers about the
2023 Annual Meeting” beginning on page 73 for answers to common
questions about the meeting, proxy materials, voting, and other
related topics.
Thank you for your continued support.
Sincerely,
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Don H. Liu
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Corporate Secretary
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Approximate Date of Mailing of Proxy Materials or
Internet Availability Notice:
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May 1, 2023
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Your vote is important. Thank you for voting.
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TARGET
CORPORATION 2023 Proxy Statement |
6 |
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Table of contents
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TARGET
CORPORATION 2023 Proxy Statement |
7 |
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Back to
Contents
General information about corporate
governance and the Board
Corporate governance
highlights
Our core corporate governance practices are listed in the following
table. In addition, we regularly evaluate our practices against
prevailing best practices and emerging and evolving topics
identified through shareholder outreach, current literature, and
corporate governance organizations.
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Practice
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Description
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Page(s)
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Accountability to shareholders
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Board evaluations and refreshment
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The Board regularly evaluates its performance in a variety of ways.
Those evaluations, changes in business strategy and operations, and
anticipated director retirements are considered by the Governance
& Sustainability Committee in determining desired skills for
future Board members to supplement the general Board membership
criteria in our Corporate Governance Guidelines.
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19-23
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Annual elections
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All directors are elected annually, which reinforces our Board’s
accountability to shareholders.
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19
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Majority voting standard
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Our Articles of Incorporation require a “majority voting” standard
in uncontested director elections—each director must receive more
votes “For” their election than votes “Against” in order to be
elected.
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19
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Director resignation
policy
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An incumbent director that does not meet the majority voting
standard must promptly offer to resign. The Governance &
Sustainability Committee will make a recommendation and the Board
must act on the offer within 90 days and publicly disclose its
decision and rationale.
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19
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Proxy access
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Any shareholder or group of up to 20 shareholders owning 3% or more
of Target common stock continuously for at least the previous three
years may nominate and include in our proxy materials director
nominees totaling up to the greater of 20% of the Board or at least
two directors.
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79
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No poison pill
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We do not have a poison pill.
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10% special meeting
threshold
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Shareholders owning 10% or more of Target’s outstanding stock have
the right to call a special meeting of shareholders.
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Shareholder voting rights are proportionate to economic
interests
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Single voting class
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Target common stock is the only class of voting shares
outstanding.
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73
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One share, one vote
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Each share of Target common stock is entitled to one vote.
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73
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Responsiveness to shareholders
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Responses to shareholder proposals
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The Board responds to shareholder proposals that receive
significant support by either making the proposed changes or
explaining why the actions were not taken through the shareholder
engagement process, proxy statement disclosure, or other means.
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70
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Understanding opposition to management proposals
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As part of its shareholder engagement process, the Board seeks to
understand the reasons for, and respond to, significant shareholder
opposition to management proposals.
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18
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Availability of independent directors
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Target’s Lead Independent Director is expected to communicate with
major shareholders, as appropriate, and Target also makes other
independent directors available, as appropriate, for shareholder
engagement.
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10, 18
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Strong, independent leadership
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Independence
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A majority of our directors must be independent. Currently, all of
our directors other than our CEO are independent, and all of our
Committees consist exclusively of independent directors.
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12, 17
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Lead Independent
Director
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Whenever our CEO is also the Chair of the Board, our Bylaws and
Corporate Governance Guidelines require a Lead Independent Director
position with robust responsibilities to provide independent
oversight of our CEO and Leadership Team.
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10
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Annual Elections for
Lead Independent
Director and Chair
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Both the Lead Independent Director and the Chair of the Board are
elected annually by the independent directors, which ensures that
the leadership structure is reviewed at least annually.
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10
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Committee membership
and leadership rotations
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The Governance & Sustainability Committee reviews and
recommends Committee membership. The Board appoints members of its
Committees annually, rotates Committee assignments periodically,
and seeks to rotate the Lead Independent Director position and
Committee Chair assignments every four to six years.
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10-11
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TARGET
CORPORATION 2023 Proxy
Statement |
8 |
| |
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Back to
Contents
|
Practice
|
Description
|
Page(s)
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Structures and practices enhance Board effectiveness
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Diversity
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The composition of our Board represents broad perspectives,
experiences, and knowledge relevant to our business while
maintaining a balanced approach to gender and ethnic diversity. In
addition, the Board’s policy is to include candidates that identify
as members of historically underrepresented groups in the pool of
potential director candidates to be considered by the Governance
& Sustainability Committee.
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19,
21-23
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Director tenure policies
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Our director tenure policies include mandatory retirement at age 75
and a maximum term limit of 20 years. These policies encourage
Board refreshment and provide additional opportunities to maintain
a balanced mix of perspectives and experiences.
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21
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Director maximum outside boards policy
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Any director serving as a CEO of a public company is expected to
serve on no more than two public company boards (including our
Board), and other directors are expected to serve on no more than
four public company boards (including our Board).
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Strategy and risk oversight
|
We disclose how strategy and risk oversight is exercised at the
Board level and how risk oversight responsibilities are allocated
among the Board and its Committees.
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13-15
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Management development
and succession planning
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Our Board regularly reviews senior management development and
succession planning, with more in-depth reviews regularly conducted
by the Compensation & Human Capital Management Committee.
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15
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Sustainability & ESG
|
We disclose how oversight responsibility for sustainability and ESG
matters is allocated among the Board and its Committees and how our
Leadership Team integrates those priorities in our business. We
also report about sustainability and ESG matters under the most
widely used reporting standards and frameworks.
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15-16
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Information security, cybersecurity, and data privacy
|
We disclose how oversight responsibilities related to information
security, cybersecurity, and data privacy are allocated among the
Board and its Committees, and provide information about our program
and practices.
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16-17
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Capital allocation
|
We disclose our capital allocation policies and priorities and how
they are overseen by the Board and its Committees.
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17
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Executive compensation incentive structures are aligned with
long-term strategy
|
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Performance linked to long-term strategy drives incentive
awards
|
The Compensation & Human Capital Management Committee has
identified short- and long-term performance goals that align with
Target’s strategy and has incorporated those goals into executive
compensation plans to serve as drivers of incentive awards.
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39-40
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Communicating executive compensation to shareholders
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The CD&A explains how performance goals drive our executive
compensation plans and connect to Target’s long-term strategy.
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36-52
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Follow leading compensation practices
|
See “Target’s executive compensation practices.”
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49
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For your convenience, we organized the corporate governance
highlights in the table above to show how our corporate governance
practices compare favorably with the corporate governance
principles developed by ISG, which reflect common corporate
governance beliefs featured in the proxy voting guidelines of the
largest institutional investors and global asset managers who are
part of ISG.
Our directors
|
Name
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Age
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Director
since
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Current or notable prior company
|
Title
|
Independent
|
Public boards
(including
Target)
|
|
David P. Abney
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67
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2021
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United Parcel Service, Inc.
|
Former Chairman & CEO
|
Yes
|
3
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|
Douglas M. Baker, Jr.
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64
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2013
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E2SG Partners, LP /
Ecolab Inc.
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Founding Partner /
Former Chairman & CEO
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Yes
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2
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|
George S. Barrett
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68
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2018
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The Overtone Group L.L.C. /
Cardinal Health, Inc.
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Founder /
Former Chairman & CEO
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Yes
|
1
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|
Gail K. Boudreaux
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62
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2021
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Elevance Health, Inc. (fka Anthem, Inc.)
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President & CEO
|
Yes
|
2
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|
Brian C. Cornell
|
64
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2014
|
Target Corporation
|
Chair & CEO
|
No
|
2
|
|
Robert L. Edwards
|
67
|
2015
|
Safeway Inc.
|
Former President & CEO
|
Yes
|
1
|
|
Melanie L. Healey(1)
|
62
|
2015
|
The Procter & Gamble Company
|
Former Group President, North America
|
Yes
|
4
|
|
Donald R. Knauss
|
72
|
2015
|
The Clorox Company
|
Former Chairman & CEO
|
Yes
|
3
|
|
Christine A. Leahy
|
58
|
2021
|
CDW Corporation
|
Chair, President & CEO
|
Yes
|
2
|
|
Monica C. Lozano
|
66
|
2016
|
ImpreMedia, LLC
|
Former Chair & CEO
|
Yes
|
3
|
|
Grace Puma
|
60
|
2022
|
PepsiCo, Inc.
|
Former Executive Vice President,
Chief Operations Officer
|
Yes
|
2
|
|
Derica W. Rice
|
58
|
2020(2)
|
CVS Health Corporation /
CVS Caremark
|
Former Executive Vice President /
Former President
|
Yes
|
4
|
|
Dmitri L. Stockton
|
59
|
2018
|
General Electric Company
|
Former Senior Vice President & Special Advisor to the
Chairman
|
Yes
|
4
|
(1)
Ms. Healey will not seek re-election and will leave the Board when
her current term ends at the 2023 Annual Meeting.
(2)
Mr. Rice previously served on our Board from September 2007 to
January 2018.
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TARGET
CORPORATION 2023 Proxy Statement |
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Board leadership
structure
We do not have an express policy on whether the roles of Chair of
the Board and CEO should be combined or separated. Instead, the
Board prefers to maintain the flexibility to determine which
leadership structure best serves the interests of Target and our
shareholders based on evolving needs. We currently have a combined
Chair of the Board and CEO leadership structure.
Whenever the Chair of the Board and CEO roles are combined as they
are currently, our Bylaws and Corporate Governance Guidelines
require that we have a Lead Independent Director position to
complement the Chair of the Board’s role and to serve as the
principal liaison between the independent directors and the CEO.
Our Corporate Governance Guidelines require that both the Chair of
the Board and Lead Independent Director be elected annually by the
independent directors.
The Board reevaluates our Board leadership structure at least
annually as part of the Board evaluation process described under
“Board and Committee evaluations” on page 20. As a result of its
most recent evaluation, the Board decided to continue its current
Board leadership structure with Mr. Cornell serving as both Chair
and CEO and Ms. Lozano serving as a Lead Independent Director. In
particular, this structure facilitates effective coordination,
development, articulation, and execution of a unified strategy at
the Board and management levels, while providing effective,
independent leadership of our Board through the Lead Independent
Director’s clearly defined and robust set of roles and
responsibilities. The Board is committed to continuing to seek
shareholder feedback on its approach as part of its ongoing
shareholder outreach efforts and will continue to reassess its
Board leadership structure on a regular basis.
|
|
Robust
responsibilities:
•
Convene meetings. Has the authority to convene
meetings of the Board and executive sessions consisting solely of
independent directors at every meeting.
•
Preside at certain meetings. Presides
at all meetings of the Board at which the Chair of the Board is not
present, including executive sessions of independent directors.
•
CEO performance review. Consults with the
Compensation & Human Capital Management Committee as it
conducts the annual performance review of the CEO, with input from
the other independent directors.
•
Director liaison. Serves as the primary liaison
between the CEO and the independent directors.
•
Meeting schedules, agendas, and
information. Approves meeting schedules, agendas, and the
information furnished to the Board to ensure that the Board has
adequate time and information for discussion.
|
•
Shareholder engagement. Is expected to engage in
consultation and direct communication with major shareholders, as
appropriate.
•
Independent director expectations. Coordinates
with the CEO to establish expectations for independent directors to
consistently monitor Target’s operations and those of our
competitors.
•
Composition and director succession
planning. Consults with the Governance & Sustainability
Committee regarding Board and Committee composition, Committee
Chair selection, the annual performance review of the Board and its
Committees, and director succession planning.
|
Annual
election:
Elected annually by the independent directors.
Service
length:
As a guideline, the Lead Independent Director should serve in that
capacity for no more than four to six years.
|
Monica C.
Lozano
|
|
Lead Independent
Director
(Since 2021)
|
Board and shareholder meeting
attendance
The Board met seven times during Fiscal 2022. All directors
attended at least 80% of the aggregate total of meetings of the
Board and Committees on which the director served during the last
fiscal year.
All of our then-serving directors attended our 2022 Annual Meeting.
The Board has a policy requiring all directors to attend all annual
meetings of shareholders, absent extraordinary circumstances.
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TARGET
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Committees
Membership
|
|
|
Name
|
|
Audit &
Risk
|
Compensation &
Human Capital
Management
|
Governance &
Sustainability
|
Infrastructure &
Finance
|
|
|
|
|
|
David P. Abney
|
|
•
|
|
|
•
|
|
|
|
|
|
Douglas M. Baker, Jr.(1)
|
|
|
•
|
C
|
|
|
|
|
|
|
George S. Barrett(1)
|
|
|
•
|
•
|
|
|
|
|
|
|
Gail K. Boudreaux
|
|
•
|
|
|
•
|
|
|
|
|
|
Robert L. Edwards
|
|
C
|
|
|
•
|
|
|
|
|
|
Melanie L. Healey(2)
|
|
|
•
|
•
|
|
|
|
|
|
|
Donald R. Knauss
|
|
|
•
|
|
C
|
|
|
|
|
|
Christine A. Leahy
|
|
|
•
|
•
|
|
|
|
|
|
|
Monica C. Lozano
|
|
|
C
|
•
|
|
|
|
|
|
|
Grace Puma
|
|
•
|
|
|
•
|
|
|
|
|
|
Derica W. Rice
|
|
•
|
|
|
•
|
|
|
|
|
|
Dmitri L. Stockton
|
|
•
|
|
•
|
|
|
|
|
|
|
Meetings held in Fiscal 2022
|
|
8
|
5
|
5
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
(1)
Mr. Barrett was chosen to succeed Mr. Baker as Chair of the
Governance & Sustainability Committee, effective June 2023. At
that time, Mr. Baker will continue serving as a member of the
Governance & Sustainability Committee.
(2)
Ms. Healey will leave the Compensation & Human Capital
Management Committee and Governance & Sustainability Committee
when her current Board terms ends at the 2023 Annual Meeting.
|
|
|
Determining composition and
leadership
The Governance & Sustainability Committee is responsible for
reviewing and recommending Committee membership. The Board appoints
members of its Committees annually and rotates Committee
assignments periodically. The following considerations provide the
framework for determining Committee composition and leadership:
•
The guideline for rotating Committee Chair assignments is four to
six years of service.
•
The Board seeks to have each director serve on two Committees.
•
The Board considers a number of factors in deciding Committee
composition, including individual director experience and
qualifications, prior Committee experience, and increased time
commitments for directors serving as a Committee Chair or Lead
Independent Director.
•
The Corporate Governance Guidelines provide that if we have
designated a Lead Independent Director that person also serves as a
member of the Governance & Sustainability Committee.
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TARGET
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Information about our
Committees
All members of each Committee are independent directors. Each
Committee operates under a written charter, a current copy of which
is available on Target’s website, as described in Question 16 “How
may I access or receive the proxy materials, other periodic
filings, key corporate governance documents, and other
information?” on page 78. In fulfilling the oversight and other
responsibilities delegated by the Board, each Committee:
•
provides the Board with regular reports of its activities;
•
has the sole authority to retain or terminate its consultants and
other advisors;
•
receives appropriate funding to pay for necessary resources and
administrative expenses; and
•
annually evaluates its performance.
|
|
Oversight and other responsibilities
|
|
Committee members
Mr. Edwards
(Chair)
Mr. Abney
Ms. Boudreaux
Ms. Puma
Mr. Rice
Mr. Stockton
Number of meetings during Fiscal
2022
8
|
 |
•
Accounting and financial reporting.
Accounting and financial reporting process, including the integrity
of our financial statements and internal controls.
•
Independent auditor. Independent auditor engagement,
qualifications, and independence.
•
Internal audit. Internal audit’s function, results,
and assessment of our risk management processes.
•
Tax matters. Positions with respect to income and
other tax obligations.
•
Committee report. “Report of the Audit & Risk
Committee” on page 67, describing the Audit & Risk Committee’s
duties and activities.
•
Policy oversight. Policies and procedures related to
oversight areas (including auditor independence matters, accounting
and auditing complaints, and related party transactions).
|
•
Compliance and ethics. Compliance and ethics
programs, monitoring, investigations and remediation efforts,
including reports of potential misconduct.
•
Enterprise risk management. Enterprise risk
management programs, principal business and operational risks
(including vendor risk management, cybersecurity and information
security, privacy, product and food safety, and business continuity
and disaster recovery), and coordination of risk oversight with the
Board and other Committees.
•
Supply chain ESG matters. Management’s
efforts to instill responsible and ethical practices within
Target’s supply chain, including vendor human capital and
responsible sourcing practices.
|
|
Audit & Risk
Committee
|
|
The Board has determined that all members of the Audit & Risk
Committee satisfy the applicable audit committee independence
requirements of the NYSE and the SEC. The Board has also determined
that Mr. Edwards, Mr. Abney, Ms. Boudreaux, Mr. Rice, and Mr.
Stockton have acquired the attributes necessary to qualify them as
“audit committee financial experts” as defined by applicable SEC
rules. The determination for each of Mr. Edwards, Mr. Abney, Ms.
Boudreaux, and Mr. Rice was based on experience as a principal
financial officer, principal accounting officer, controller, public
accountant or auditor, or actively supervising a person holding one
of those positions. For Mr. Stockton, the determination was based
on his financial oversight experiences with General Electric
Company. The Board also determined that Mr. Rice’s simultaneous
service on the audit committees of four public companies will not
impair his ability to effectively serve on the Audit & Risk
Committee.
|
|
|
Oversight and other responsibilities
|
|
Committee members
Ms. Lozano (Chair)
Mr. Baker
Mr. Barrett
Ms. Healey
Mr. Knauss
Ms. Leahy
Number of meetings during
Fiscal 2022
5
|
 |
•
Executive compensation program. Compensation
philosophy, plans, selection, and relative weightings of different
compensation elements to balance risk, reward, and retention
objectives, and the alignment of incentive compensation performance
measures with our strategy.
•
CEO compensation. Goals, objectives, elements, and
value for the CEO’s compensation, in consultation with independent
members of the Board.
•
Other Leadership Team compensation.
Compensation elements and value for all other members of our
Leadership Team, including our Non-CEO NEOs.
•
Management development and succession
planning. Senior management development, evaluation, and succession
planning, including CEO succession planning.
|
•
Board compensation. Compensation provided to
non-employee members of the Board.
•
Committee report. “Compensation & Human Capital
Management Committee Report” on page 36.
•
Compensation risk management. Risks associated
with our compensation policies, practices, and incentives, and
whether those policies and practices create material risks to
Target.
•
Human capital management. Human capital
matters with respect to our workforce, including DE&I, culture
and Team Member engagement, pay equity, broad-based compensation
and benefits, growth and development, and purpose and values.
|
|
Compensation &
Human Capital Management Committee
|
|
The Board has determined that all members of the Compensation &
Human Capital Management Committee satisfy the applicable
compensation committee independence requirements of the NYSE and
the SEC.
|
| |
|
|
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TARGET
CORPORATION 2023 Proxy Statement |
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|
Oversight and other responsibilities
|
|
Committee
members
Mr. Baker (Chair)(1)
Mr. Barrett(1)
Ms. Healey
Ms. Leahy
Ms. Lozano
Mr. Stockton
Number of meetings during Fiscal
2022
5
|
 |
•
Corporate governance. Corporate governance structure
and practices.
•
Director succession planning. Director
succession planning reviews and identification, screening, and
recruitment of individuals qualified to become Board members.
•
Board and Committee composition
and leadership. Recommendations, in consultation with
the Lead Independent Director, on overall composition of the Board
and its Committees, and the selection of the Committee Chairs and
the Lead Independent Director.
|
•
Board and Committee evaluations. Annual
performance review of the Board and its Committees in consultation
with the Lead Independent Director.
•
Sustainability & ESG matters.
Overall approach to significant sustainability and ESG matters
(including strategy, prioritization, monitoring, and external
reporting), environmental stewardship practices, social and
political issues and risks not allocated to other Committees, and
philanthropy and community engagement.
•
Public policy advocacy and
political activities. Our policies and practices
regarding public policy advocacy and political activities.
|
|
Governance & Sustainability Committee
|
(1)
Mr. Barrett was chosen to succeed Mr. Baker as Chair of the
Governance & Sustainability Committee, effective June 2023. At
that time, Mr. Baker will continue serving as a member of the
Governance & Sustainability Committee.
|
|
Oversight and other responsibilities
|
|
Committee members
Mr. Knauss (Chair)
Mr. Abney
Ms. Boudreaux
Mr. Edwards
Ms. Puma
Mr. Rice
Number of meetings during Fiscal
2022
5
|
 |
•
Investment activity. Investment activity, including
aligning investments with our strategy, and evaluating the
effectiveness of investment decisions.
•
Infrastructure resources. Management’s resource
allocation plans regarding infrastructure requirements.
•
Significant transactions. Management’s plans and
strategies for significant transactions within the strategic
framework reviewed by the Board, including level of investment,
sources of financing, expected returns, and post-acquisition
integration and performance of acquired businesses.
|
•
Financial matters. Financial policies and financial
condition, including our liquidity position, funding requirements,
ability to access the capital markets, interest rate exposures, and
policies regarding return of cash to shareholders.
•
Financial risk management. Financial risk
assessment process, management activities and strategies, and use
of third party insurance and self-insurance strategies.
|
|
Infrastructure
& Finance Committee
|
Core functions of the
Board
The Board is responsible for overseeing Target’s business and
affairs, which covers a wide range of activities that supports
Target’s purpose to help all families discover the joy of everyday
life. To provide you with a better understanding of how our Board
meets that responsibility, this section discusses some core
functions our Board performs and how those functions oversee,
support, and relate to management’s roles and responsibilities.
Strategy oversight
Our team, technology, and operations enable us to serve guests,
fulfill our purpose, and drive business results through a durable,
growth-focused enterprise strategy that differentiates Target in
the marketplace. The six pillars of our strategy are:
•
Differentiating from our competition with our assortment of unique
owned brands and curated leading national brands;
•
Investing to create an engaging, convenient, safe, and
differentiated shopping experience for our guests;
•
Leveraging our stores as fulfillment hubs to efficiently meet our
guests’ needs, whether they purchase online or in-store;
•
Engaging with our guests through programs like Target Circle and
RedCard to maintain and enhance our relevancy;
•
Delivering affordability to our guests; and
•
Leveraging our size and scale to benefit people, the planet, and
our business, primarily through Target Forward, our enterprise
sustainability strategy, discussed in more detail in
“Sustainability & ESG” beginning on page 15.
The Board has an important role in overseeing the development,
periodic review, and ongoing monitoring of our strategy. With a
strong overall strategy in place, the Board and its Committees are
focused on overseeing strategy execution by:
•
Ensuring that Target has a high-performing Leadership Team and
appropriate resources to carry out the strategy, and
•
Confirming that the primary risks to successfully executing our
strategy are appropriately identified and managed.
To support its strategy oversight role, at each regular meeting the
Board receives updates about our financial and strategic
performance. In addition, it receives regular updates on the major
events, activities and challenges affecting our business, and
ongoing strategy.
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TARGET
CORPORATION 2023 Proxy Statement |
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Risk oversight
Oversight of the various risks we face in implementing our strategy
is an integral and continuous part of the Board’s oversight of our
business. The Board, each Committee, and management have specific
roles and responsibilities with respect to those risks.
The Board and its Committees
The Board provides oversight of overall risks and seeks to ensure
that our Leadership Team has processes in place to appropriately
manage risk. Strategic risks are emphasized within that overall
risk oversight responsibility because they are an integral and
ongoing part of the Board’s oversight of our business. For example,
our principal strategic risks are reviewed as part of the Board’s
regular discussion and consideration of our strategy, including the
development and monitoring of specific initiatives and their
overall alignment with our strategy. Similarly, at every meeting
the Board reviews the principal factors influencing our operating
results, including the competitive environment, and discusses with
our Leadership Team the major events, activities, and challenges
affecting Target.
The Audit & Risk Committee oversees our enterprise risk
management program and periodically reviews our approach to risk
identification, assessment, and mitigation strategies with the
Board to facilitate coordination with the activities of the Board
and other Committees. The Chief Legal & Risk Officer provides
the Audit & Risk Committee with regular updates on the
enterprise risk management program and the status of key risks
facing the business. The Audit & Risk Committee also regularly
receives updates on key risk areas from other members of our
Leadership Team (and certain members of their teams with primary
responsibility for managing those risk areas), and regularly
reviews legal and regulatory risk, compliance, and ethics
matters.
Under our existing Board leadership structure, the Lead Independent
Director plays an important role in supporting the Board’s
oversight of risks by approving meeting schedules, agendas, and the
information furnished to the Board. The Committee Chairs do the
same for their respective Committees. The general risk oversight
functions among the Board and its Committees is as follows. For
more detail on the specific oversight and responsibilities of each
Committee, see pages 12-13.
(1)
As part of its overall oversight role, the Board addresses certain
aspects of matters that are primarily overseen by its
Committees.
(2)
The Board oversees sustainability and ESG risks through its
evaluation of business strategy risks and as part of its
consideration of top enterprise risks.
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CORPORATION 2023 Proxy Statement |
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Management
The primary responsibility for the identification, assessment, and
management of the various risks that we face belongs with our
Leadership Team and certain members of its teams.
Our Chief Legal & Risk Officer provides centralized oversight
of Target’s enterprise risk management program. Our Chair & CEO
and his direct reports meet regularly with the Chief Legal &
Risk Officer and the enterprise risk management team to identify,
assess, and manage risks facing the business. In addition, the
Chief Legal & Risk Officer and other enterprise risk management
team regularly meet with leaders of business areas to inform,
coordinate, and manage the enterprise risk management program.
Our risk management capabilities are intended to increase the
likelihood of desired business outcomes. The different risk-related
roles and responsibilities, which are aligned and coordinated using
a common framework, including tools, technology, and defined
routines, are fulfilled by different business functions as
follows:
•
Business teams. Define business objectives and
desired outcomes. Execute, oversee, and monitor day-to-day business
activities and risks, leveraging the risk and compliance function’s
tools and support as appropriate.
•
Risk and compliance teams. Partner with
business teams to identify, assess, prioritize, treat, and monitor
top enterprise risks. Develop, help implement, monitor and evaluate
processes, as appropriate, to enable business teams’ oversight and
day-to-day risk management.
•
Internal audit. Provide independent assurance and
risk insights to instill confidence in and evaluate whether
Target’s programs and processes will sustainably achieve intended
outcomes.
Management development and
succession planning
One of the primary responsibilities of the Board is to ensure that
Target has a high-performing Leadership Team. To meet that goal,
the Board, the Compensation & Human Capital Management
Committee, and management share responsibility for management
development and succession planning:
|
Responsible party
|
Oversight area for management development and succession
planning
|
|
Board
|
Oversight of these topics as part of its overall oversight role,
including regular reviews of management development and succession
planning to maximize the pool of internal candidates who can assume
top management positions without undue interruption
|
|
Compensation & Human Capital Management
Committee
|
Primary responsibilities for organizational talent and development
and management succession planning, including regular reviews of
executive performance, diverse representation, potential, and
succession planning with a deeper focus than the full Board review,
emphasizing career development for high-potential members of
management
|
|
Management
|
The Chief Human Resources Officer, who is a member of our
Leadership Team, and senior Human Resources leaders work with
functional leaders across Target in developing and implementing
programs to attract, assess, and develop management-level talent
for possible future senior leadership positions, including those on
our Leadership Team
|
Sustainability &
ESG
We engage with a diverse group of stakeholders around the world,
including the people who manufacture the products we sell, the Team
Members who welcome our guests, the communities where we work, the
nonprofits that work with us, and the investors who make our work
possible. Their perspectives are one of a variety of factors we
consider as we analyze which ESG matters to prioritize in
determining and evaluating our sustainability strategy.
Target Forward, our enterprise sustainability strategy, reflects
those prioritized ESG matters integrated into our strategy and
purpose. Target Forward builds on our legacy of corporate
responsibility and seeks to leverage our size and scale to benefit
people, the planet, and our business. It incorporates specific,
time-bound goals that support our ambitions to design and elevate
sustainable brands, innovate to eliminate waste, and accelerate
opportunity and equity with Team Members, guests, partners, and
communities. More information about Target Forward and our goals
can be found on our website at
corporate.target.com/sustainability-ESG.
Given the breadth of ESG matters for a company of our size and
scale, oversight of those issues is allocated throughout the Board
and its Committees:
|
Responsible party
|
Oversight areas for ESG matters
|
|
Board
|
•
Sustainability and ESG strategy (through oversight of our business
strategy and annual strategic priorities)
•
Sustainability and ESG risks (through oversight of our business
strategy and top enterprise risks)
•
Crisis management and response
•
Organizational team health
|
|
Audit & Risk Committee
|
•
Supply chain ESG matters, including vendor human capital and
responsible sourcing practices
•
Cybersecurity and information security
•
Product and food safety
|
| |
|
|
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CORPORATION 2023 Proxy Statement |
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|
Responsible party
|
Oversight areas for ESG matters
|
|
Governance & Sustainability Committee
|
•
Overall approach to significant sustainability and ESG matters
(including strategy, prioritization, monitoring, and external
reporting)
•
Environmental stewardship practices (including climate and energy,
waste, natural resources, and chemicals)
•
Social and political issues and risks not allocated to other
Committees
•
Philanthropy and community engagement
•
Policies and practices regarding public policy advocacy and
political activities
|
|
Compensation & Human Capital Management
Committee
|
•
Culture and Team Member engagement
•
Broad-based compensation and benefits
|
At the management level, our ESG matters are led and coordinated by
our Senior Vice President, Corporate Responsibility, who reports to
a member of our Leadership Team and regularly engages with the
Governance & Sustainability Committee and the full Board. The
Senior Vice President, Corporate Responsibility is responsible
for:
•
conducting regular priority assessments to determine the topics of
most significance to our stakeholders;
•
collaborating with our Leadership Team to instill ESG-related
priorities into our business operations, including product design
and development, sourcing and supply chain operations, human
capital management, and our new store development; and
•
developing ESG-related goals and managing our ESG data,
measurement, and reporting.
In our annual ESG Report we provide extensive information on
different ESG matters and include appendices that organize and
report the information according to the most widely used reporting
standards and frameworks. Our most recent report is available on
our website at
corporate.target.com/sustainability-ESG/governance-and-reporting/reporting-progress.
Information security,
cybersecurity, and data privacy
Securing company systems, business information, and personal
information of our guests, Team Members, vendors, and other third
parties is important to us. We have systems in place to:
•
safely receive, protect, and store that information;
•
collect, use, and share that information appropriately; and
•
detect, contain, and respond to data security incidents.
While everyone at Target plays a part in information security,
cybersecurity, and data privacy, oversight responsibility is shared
by the Board, its Committees, and management:
|
Responsible party
|
Oversight area for information security, cybersecurity, and data
privacy
|
|
Board
|
Oversight of these topics within Target’s overall risks
|
|
Audit & Risk Committee
|
Primary oversight responsibility for information security,
cybersecurity, and data privacy, including internal controls
designed to mitigate risks related to these topics
|
|
Management
|
Our Chief Information Officer, Chief Information Security Officer,
Chief Legal & Risk Officer, Senior Vice President of Compliance
and Ethics, and other senior members of our cybersecurity and
compliance and ethics teams are responsible for identifying and
managing risks related to these topics, and reporting to the Audit
& Risk Committee and/or the full Board
|
Our program and practices for these areas include the
following:
•
Frequent Board and Committee
updates. To inform and educate the Board and Audit &
Risk Committee in their oversight responsibilities, throughout the
year management provides regular updates on these topics. For
example, the Chief Information Security Officer provides
information security risk and controls, cyber threats, and other
program updates, and the Senior Vice President of Compliance and
Ethics, provides privacy program updates.
•
Systems and processes. We use a combination of
industry-leading tools and in-house technologies to protect Target
and our guests, operate a proactive threat intelligence program to
identify and assess risk, and run a 24×7 Cyber Fusion Center to
investigate and respond to threats. Our program is based on
recognized industry security standards and control frameworks,
which we validate through internal and independent assessments. Our
cybersecurity team regularly tests our controls through penetration
testing, vulnerability scanning, and attack simulation. In
addition, we have an incident response program to address potential
security and privacy incidents.
•
Understanding evolving threats in
the industry and with our
suppliers. Our Cyber Threat Intelligence and data privacy
teams work to understand evolving threats, developing issues, and
industry trends, and our Vendor teams monitor and assess risks with
our suppliers.
•
Collaboration with organizations across
different industries. We share threat intelligence
and collaborate with organizations across different industries to
share best practices, fight cybercrime, enhance privacy, discuss
new technologies, better understand the evolving regulatory
environment, and advance capabilities in these areas.
•
Investment, training, and development
of our cybersecurity and data
privacy teams. We invest in building and developing
cybersecurity talent and engineering expertise in-house rather than
relying solely on third-party providers. We also offer in-house
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training and educational courses through our Cyber Plus Institute,
which is a security training curriculum leveraging internal subject
matter expertise along with curated resources. Our data privacy
team has industry certifications, works to understand changing
technologies that impact consumer privacy, and regularly
participates in training and conferences.
•
Regular training and compliance
activities for our Team Members.
Our Team Members receive annual training on information security,
cybersecurity, and data privacy topics to understand the behaviors
and technical requirements necessary to protect company and guest
information, and appropriately collect, use, and share personal
information. We also offer ongoing practice and education for Team
Members to recognize and report suspicious activity.
•
Use of third parties. Beyond our
in-house capabilities we engage with leading security and
technology vendors to assess our information security and
cybersecurity program and test our technical capabilities.
•
Insurance coverage. We maintain insurance coverage to
limit our exposure to certain network security and privacy
matters.
Capital allocation
Our disciplined and balanced approach to capital allocation is
based on the following priorities, ranked in order of
importance:
|
Priority
|
Description
|
|
1. Investing in our business
|
Fully invest in opportunities to profitably grow our business,
create sustainable long-term value, and maintain our current
operations and assets
|
|
2. Annual dividend
|
Maintain a competitive quarterly dividend and seek to grow it
annually
|
|
3. Share repurchase
|
Return excess cash to shareholders by repurchasing shares within
the limits of our credit rating goals
|
We have flexibility to adjust the level of share repurchase
activity to respond to changes in our operating performance,
investment opportunities, and the external environment, and use
share repurchase to balance the levels of debt and equity on our
balance sheet to support our credit rating goals.
Our Leadership Team is responsible for developing and executing our
capital allocation policy with oversight by the Board and its
Committees. The Infrastructure & Finance Committee is
responsible for reviewing the execution of our capital allocation
policy and making recommendations to the Board on the amount of
dividends and share repurchase levels, while the Compensation &
Human Capital Management Committee oversees the compensation
effects of capital allocation priorities on plan design,
goal-setting process, performance updates, and payouts.
Director
independence
The Board believes that a majority of its members should be
independent directors. The Board annually reviews all relationships
that directors have with Target to affirmatively determine whether
the directors are independent. If a director has a material
relationship with Target, that director is not independent. The
listing standards of the NYSE also detail certain relationships
that, if present, preclude a finding of independence. The Board
affirmatively determined that all non-employee directors are
independent. Mr. Cornell is the only director employed by
Target and is not independent.
In making its independence determination, the Board specifically
considered the following transactions during the past three years
and concluded that none of them impaired any director’s
independence:
•
Ms. Boudreaux serves as President & Chief Executive Officer of
Elevance Health, Inc. (fka Anthem, Inc.), from which we obtained
the wellness services that comprise our Team Member life resources
program.
•
Ms. Leahy serves as President & Chief Executive Officer of CDW
Corporation, from which we purchased supplies, merchandise,
equipment, software, servicing, repairs, and maintenance.
Each of the transactions listed in this “Director independence”
section involved amounts that represented an immaterial percentage
of our, and the other entity’s, revenues, and were well below the
amounts that would preclude a finding of independence under the
NYSE listing standards. In addition, none of the transactions
listed in this “Director independence” section are related-party
transactions because none of the directors have a direct or
indirect material interest in the listed transactions.
Policy on transactions with related
persons
The Board has adopted a written policy requiring that any
transaction: (a) involving Target, (b) in which one of our
directors, nominees for director, executive officers, or greater
than five percent shareholders, or their immediate family members,
have a direct or indirect material interest, and (c) where the
amount involved exceeds $120,000 in any fiscal year, be approved by
a majority of independent directors of the full Board or by a
designated Committee. The Board has designated the Audit & Risk
Committee as having responsibility for reviewing and approving all
such transactions except those dealing with compensation of
executive
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officers and directors, or their immediate family members, in which
case it will be reviewed and approved by the Compensation &
Human Capital Management Committee.
In determining whether to approve any such transaction, the
independent directors or relevant Committee must consider, in
addition to other factors deemed appropriate, the material facts of
the transaction and whether the transaction is on terms no less
favorable to Target than those involving unrelated parties. The
Audit & Risk Committee must prohibit any transaction it
determines to be inconsistent with the interests of Target and its
shareholders. No director may participate in any review or approval
of any transaction if the director, or the director’s immediate
family member, is a party to the transaction.
The Audit & Risk Committee approved one related party
transaction in accordance with this policy during Fiscal 2022.
Donald Knauss, a non-employee director, has a son who is employed
as a sales representative by a supplier from which Target purchases
wholesale merchandise. Mr. Knauss’s son represented the
supplier in its relationship with Target Corporation during Fiscal
2022. We purchased approximately $12 million of merchandise from
the supplier in Fiscal 2022, which represented less than 0.02% of
our annual revenues. Target’s decisions regarding purchases of
merchandise from its suppliers are made by Team Members in the
merchandising departments and no member of the Board has any input
or involvement in such decisions. The transaction involving Mr.
Knauss’s son did not affect Mr. Knauss’s independence and the Board
affirmatively determined that Mr. Knauss is independent.
Business ethics and
conduct
We are committed to conducting business ethically and lawfully. All
of our directors and executive officers, like all Target Team
Members, are required to act with honesty and integrity.
Our Code of Ethics, which applies to all Target Team Members,
including our executive officers and Chief Accounting Officer &
Controller, establishes expectations to guide ethical
decision-making, including putting ethics into action, working
together, maintaining trust, conducting business fairly,
safeguarding what’s ours, and caring for our world. Included within
those topics is how we address conflicts of interest, fair dealing,
required information disclosures and compliance with laws, rules
and regulations, and prompt reporting. Our Code of Ethics also
describes the means by which any Team Member can provide an
anonymous report of an actual or apparent violation of our Code of
Ethics.
Similarly, our directors are subject to a separate Code of Ethics
contained within our Corporate Governance Guidelines, which is
tailored to the unique role fulfilled by members of the Board and
addresses conflicts of interest, corporate opportunities,
maintaining confidentiality, compliance with laws, fair dealing,
and compliance procedures.
Our Code of Ethics applicable to all Target Team Members and our
Corporate Governance Guidelines containing the Code of Ethics
applicable to members of the Board are available on Target’s
website, as described in Question 16 “How may I access or receive
the proxy materials, other periodic filings, key corporate
governance documents, and other information?” on page 78. Any
amendments to, or waivers of, any provision of the applicable Code
of Ethics involving our directors, executive officers, Chief
Accounting Officer & Controller, or other persons performing
similar functions are disclosed on our website at
corporate.target.com/sustainability-ESG/governance-and-reporting/corporate-governance.
Shareholder
engagement
We regularly engage with our shareholders, both large and small,
relating to our business, compensation practices, and ESG matters.
We involve one or more independent directors in these
conversations, as appropriate. The principal topics of engagement
since our 2022 Annual Meeting included:
•
Board composition, including skills and qualifications,
evaluations, diversity, refreshment, tenure, onboarding, and
continuing education;
•
Board leadership structure and our policies and practices that
facilitate effective, independent leadership;
•
Board and Committee oversight roles and responsibilities, including
for oversight of business strategy, risks, and ESG matters;
•
our sustainability strategy, Target Forward, including how it
relates to our purpose and business strategy, the goals supporting
the sustainability strategy, and our progress towards achieving
those goals;
•
human capital management, including our investments in our team,
our philosophy and approach to human capital management metrics and
DE&I, and management development and succession planning;
•
our executive compensation program, pay for performance philosophy,
and evolving practices;
•
sustainability and ESG matters within our supply chain, including
our responsible sourcing practices;
•
environmental topics, such as the circular economy, packaging, net
zero goals, and carbon emissions; and
•
our proxy access bylaws and how we considered the voting results
for proposal to amend the proxy access bylaw to remove the
shareholder group limit at the 2022 Annual Meeting.
While we benefit from an ongoing dialogue with many of our
shareholders, we recognize that we have not communicated directly
with all of our shareholders. If you would like to engage with us,
please send correspondence to Target Corporation, Attn: Investor
Relations, 1000 Nicollet Mall, TPN-0841, Minneapolis, Minnesota
55403 or email investorrelations@target.com.
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Item one Election
of directors
|
Item of business
|
|
Board recommendation
|
|
Voting approval standard
|
|
Election of 12 director
nominees named in the
2023 Proxy Statement.
|
|
The Board recommends that
shareholders vote FOR
each
director nominee.
|
|
More votes “For” than “Against.”
Abstentions and broker
non-votes have no effect in
calculating the required vote.
|
For additional details about the Board recommendation and voting
standards, please see Question 10 “What items are being voted upon,
how does the Board recommend that I vote, and what are the
standards for determining whether any item has been approved?” on
page 75.
Election and nomination
process
Governance principles
Our election process is backed by sound corporate governance
principles:
•
All directors are elected annually.
•
Directors are elected under a “majority voting” standard—each
director in an uncontested election must receive more votes “For”
his or her election than votes “Against” in order to be
elected.
•
An incumbent director who is not re-elected under the majority
voting standard must promptly offer to resign. The Governance &
Sustainability Committee will make a recommendation on the offer to
the full Board, and the Board must accept or reject the offer
within 90 days and publicly disclose its decision and
rationale.
Board
membership criteria and identifying candidates
Our Corporate Governance Guidelines provide the following general
Board membership criteria:
•
Directors are to have broad perspectives, experience, knowledge,
and independent judgment, and a high degree of interest and
involvement.
•
The Board as a whole should consist predominantly of persons with
strong business backgrounds that span multiple industries who can
bring different sets of experiences and perspectives to the
Board.
•
DE&I is recognized as highly desirable and, accordingly, the
Board seeks directors who can bring different sets of experiences
and perspectives to the Board. It is the policy of the Board to
include, and to instruct search firms and others who assist in
identifying director candidates to include, candidates that
identify as members of historically underrepresented groups in the
pool of potential director candidates to be considered by the
Governance & Sustainability Committee.
The Governance & Sustainability Committee is responsible for
recommending to the Board any additional criteria for selecting
director candidates; identifying, screening, and recruiting
candidates; and making director nomination recommendations to the
full Board. To determine desired skills and qualifications to
supplement the general Board membership criteria, the Governance
& Sustainability Committee considers:
•
Changes in our business strategy or operating environment and the
future needs of the Board in light of anticipated director
retirements under our Board tenure policies.
•
Input from the Board and Leadership Team and feedback from our
shareholders to identify the backgrounds and skill sets that are
desired.
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The table on page 22 provides the current key characteristics of
our business and desired skills for director candidates for
overseeing those business characteristics.
Our internal talent acquisition team and, occasionally, a
third-party search firm assist the Governance & Sustainability
Committee to identify candidates using the general Board membership
criteria and current desired skills described this section. In
addition, the Governance & Sustainability Committee considers
candidates who are recommended by shareholders, other Board
members, the CEO, and our Leadership Team against those same
general Board membership criteria and desired skills.
Any shareholder who wants to recommend a candidate for the
Governance & Sustainability Committee to consider nominating
for the 2024 Annual Meeting should submit a written request and
related information to our Corporate Secretary no later than
December 31, 2023 in order to allow for sufficient time to consider
the recommendation. Shareholders may also nominate director
candidates directly if they comply with our Bylaws, which are
described in more detail in Question 19 “How do I submit a proposal
or nominate a director candidate for the 2024 Annual Meeting?” on
page 79.
Board and Committee
evaluations
Overview
The Governance & Sustainability Committee, in consultation with
the Lead Independent Director, annually leads an evaluation
reviewing the performance of the Board and its Committees. The
evaluation process seeks to obtain each director’s assessment of
the effectiveness of the Board, the Committees and their
leadership, Board and Committee composition, and Board/management
dynamics. In addition, as part of the process the Board evaluates
individual director performance through questions in the survey
focused on obtaining candid feedback on individual directors and
during the one-on-one conversations between the Lead Independent
Director and each director regarding their survey responses. This
annual evaluation has occasionally been conducted by a third-party
consultant, as appropriate. Our Corporate Secretary’s Office
administered the recent evaluation. This annual review process is
supplemented by regular one-on-one conversations between the Lead
Independent Director and each director to obtain informal feedback
throughout the year.
Annual review process
Actions
Over the past few years, the evaluation process has contributed to
different enhancements to the Board and its Committees,
including:
•
Reallocating Committee responsibilities and renaming the Committees
to reflect their revised scope.
•
Clarifying the roles of the Board and its Committees with respect
to oversight of ESG matters.
•
Managing Board composition and refreshment to provide a wealth of
relevant expertise, diverse mix of skills, gender and racial/ethnic
diversity, and balanced tenure.
•
Adopting a formal Board diversity policy to include, and to
instruct search firms and others who assist in identifying director
candidates to include candidates that identify as members of
historically underrepresented groups in the pool of potential
director candidates to be considered by the Governance &
Sustainability Committee.
•
Revising the mandatory retirement age policy to increase the age to
align with the prevailing practice of other S&P 500
companies.
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Board refreshment and
composition
Tenure policies
The Board maintains tenure policies (contained in our Corporate
Governance Guidelines) to encourage regular refreshment and provide
additional opportunities to add to the Board’s balanced mix of
perspectives and experiences. In January 2023, after considering
the results of the Board’s annual review process, the Board
increased the mandatory retirement age to 75 from 72. The change
aligns with the prevailing practice of other S&P 500 companies
with mandatory retirement age policies and provides more
flexibility for retaining directors who are still contributing to
the Board’s effectiveness.
Tenure and age of independent directors
Our current Board’s composition represents a balanced approach to
tenure for our independent directors, allowing the Board to benefit
from the experience of longer-serving directors combined with fresh
perspectives from newer directors:
(1)
Mr. Rice previously served on our Board from September 2007 to
January 2018. We include his prior service in determining his total
tenure with the Board for purposes of our tenure policies.
Board diversity
The Board values DE&I and the composition of the Board’s
current membership is consistent with the strong history of gender
and racial/ethnic diversity on the Board.
(1)
Our racially or ethnically diverse directors are Ms. Healey, Ms.
Lozano, Ms. Puma, Mr. Rice, and Mr. Stockton.
Information about new directors
On August 10, 2022, the Board elected Grace Puma to fill a vacancy
on the Board. Ms. Puma was identified as a candidate by our
internal talent acquisition team as part of its role in supporting
the Governance & Sustainability Committee’s ongoing director
succession planning responsibilities, which include identifying,
screening, and recruiting individuals qualified to become Board
members. After Ms. Puma was identified, members of our Leadership
Team reviewed her qualifications and the Governance &
Sustainability Committee evaluated those qualifications against our
general Board membership criteria and desired skills before
recommending her election to the full Board.
Ms. Puma provides the Board with significant knowledge and
experience in operations, global procurement, supply chain
logistics, and risk management. You can view biographical
information about Ms. Puma on page 28.
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Independent director skills and diversity matrix
The Board believes that the combination of backgrounds, skills, and
experiences collectively possessed by it makes the Board
well-qualified to exercise oversight responsibilities on behalf of
Target’s shareholders and other stakeholders. The following tables
describe key characteristics of our business, desired skills for
overseeing those business characteristics, director qualifications
for possessing those skills, and the self-identified skills and
individual diversity attributes for each independent member of our
Board nominated for election at the 2023 Annual Meeting. As
described on pages 19-20 we use the general Board membership
criteria listed in our Corporate Governance Guidelines, along with
the desired skills and qualifications listed in the following
table, to identify, screen, and recruit director candidates and
make director nomination recommendations to the full Board.
|
Target’s business characteristics
|
Desired skill
|
Director qualifications for possessing the skill
|
|
Target is a large retailer that offers everyday essentials and
fashionable, differentiated merchandise at discounted prices in
stores and through digital channels.
|
Retail industry experience
|
Executive
officer level experience or service on the board of directors at a large retail or consumer products company.
|
|
Target’s scale and complexity requires strong leadership to align
our team, technology, and operations across many areas, including
marketing, merchandising, supply chain, fulfillment, real estate,
finance, sustainability, and corporate responsibility.
|
Senior leadership
|
Experience
in an executive officer level role or senior government leadership role.
|
|
Our brand is the cornerstone of our strategy to offer a preferred
shopping experience for our guests that differentiates us in the
marketplace.
|
Marketing
/ Brands
|
Executive
officer level experience in marketing or managing well-known brands or the types of consumer products we sell, or service on the board of directors of a marketing or consumer products company.
|
|
We have a large and global workforce, which represents one of our
key resources, as well as one of our largest operating
expenses.
|
Human capital management
|
Executive
officer level experience managing a large or global workforce or DE&I strategy, or experience on a board of directors overseeing those functions.
|
|
Leveraging our stores-as-hubs to efficiently provide an engaging,
convenient, safe, and differentiated shopping experience for
guests, whether they purchase online or physically in-store,
requires significant capital deployment, a large network of
facilities and real estate, and effective resource allocation to
support our business and infrastructure needs at scale.
|
Capital deployment
|
Experience
with capital deployment for business operations, real estate transactions or property management, or mergers and acquisitions; actively supervising someone performing similar functions; or on a board of directors overseeing those functions.
|
|
Our business involves sourcing merchandise domestically and
internationally from numerous vendors and distributing it through
our fulfillment network.
|
Global supply chain
|
Executive
officer level experience on the board of directors of a company with global supply chain operations.
|
|
Maintaining and enhancing our relevancy to deepen our engagement
with guests and requires a variety of digital tools and data
analytics to support many aspects of our operations, including
loyalty programs, merchandising, and fulfillment.
|
Digital tools / Data analytics
|
Experience
in digital platforms, digital media, customer loyalty programs, or data analytics; actively supervising someone performing similar functions; or service on the board of directors of a digital platforms, digital media, or data analytics company.
|
|
Securing and appropriately handling the information we receive and
store about our guests, Team Members, vendors, and other third
parties is important to us.
|
Information
security / Data privacy
|
Experience
in information security, cybersecurity, or data privacy; actively supervising someone performing similar functions; or on a board of directors overseeing those functions.
|
|
We are a large public company with a disciplined approach to
financial management and accurate disclosure.
|
Financial
management
|
Qualification
as an “audit committee financial expert” under applicable SEC rules; executive officer level experience in financial management, reporting, or planning and analysis; or experience on a board of directors overseeing any of those finance functions.
|
|
We are subject to a variety of risks and seek to identify, assess,
and manage those risks for the long-term success of our business
and to meet our legal and regulatory obligations.
|
Risk management
|
Executive
officer level experience in enterprise risk management; actively supervising someone performing similar functions; or on a board of directors overseeing those functions.
|
|
To be successful, we must preserve, grow, and leverage the value of
our reputation with our guests, Team Members, vendors, the
communities in which we operate, and our shareholders and
appropriately respond to crisis events affecting those
stakeholders.
|
Reputation
management
|
Experience
in community relations, public service, government affairs, corporate governance, or crisis response; actively supervising someone performing similar functions; or on a board of directors overseeing any of those functions.
|
|
As we leverage our size and scale to benefit people, the planet,
and our business, we seek to identify, assess, and prioritize the
ESG matters affected by our business.
|
ESG
|
Experience
in strategies supporting sustainable long-term value creation or any matters included in our ESG priorities; actively supervising someone performing similar functions; or on a board of directors overseeing any matters included in our ESG priorities.
|
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|
Desired skill
|
Mr.
Abney
|
Mr.
Baker
|
Mr.
Barrett
|
Ms.
Boudreaux
|
Mr.
Edwards
|
Mr.
Knauss
|
Ms.
Leahy
|
Ms.
Lozano
|
Ms.
Puma
|
Mr.
Rice
|
Mr.
Stockton
|
|
Retail industry experience
|
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•
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•
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•
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•
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Senior leadership
|
•
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•
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•
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•
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•
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•
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•
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•
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•
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•
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•
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Marketing / Brands
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•
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•
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•
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•
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•
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Human capital management
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•
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•
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•
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•
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•
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•
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•
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•
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•
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•
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•
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Capital deployment
|
•
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•
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•
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•
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•
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•
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•
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•
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•
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Global supply chain
|
•
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•
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•
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•
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•
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•
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•
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•
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Digital tools / Data
analytics
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•
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•
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Information security / Data
privacy
|
•
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•
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•
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•
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•
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•
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•
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Financial management
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•
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•
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•
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•
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•
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•
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•
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•
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•
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•
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Risk management
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•
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•
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•
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•
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•
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•
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•
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•
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•
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•
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Reputation management
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•
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•
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•
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•
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•
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•
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•
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•
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•
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•
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ESG
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•
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•
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•
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•
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•
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•
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•
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•
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•
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•
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Self-identified gender
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Female
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•
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•
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•
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•
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Male
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•
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•
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•
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•
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•
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•
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•
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Self-identified race / ethnicity
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White
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•
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•
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•
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•
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•
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•
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•
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Black / African American
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•
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•
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Hispanic / Latino
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•
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•
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2023 nominees for director
After considering the recommendations of the Governance &
Sustainability Committee, the Board has set the number of directors
at 12 and nominated all current directors to stand for re-election,
except for Mel Healey who will depart the Board at the end of her
current term. The Board believes that each of these nominees is
qualified to serve as a director of Target and, in addition to the
skills listed in the table on page 22, the specific qualifications
of each nominee that were considered by the Board follow each
nominee’s biographical description.
We believe that all nominees will be able and willing to serve if
elected. However, if any nominee should become unable or unwilling
to serve for any reason, proxies may be voted for another person
nominated as a substitute by the Board, or the Board may reduce the
number of directors.
 |
Former
Chairman & CEO, United Parcel Service, Inc.
Background
David P. Abney is the former Chairman of the Board & Chief
Executive Officer of United Parcel Service, Inc., a well-known
multinational package delivery and supply chain management company,
serving as Executive Chairman from June 2020 to September 2020,
Chairman of the Board from February 2016 to June 2020, and Chief
Executive Officer from September 2014 to June 2020. He previously
held various other leadership positions within UPS, including Chief
Operating Officer, President of United Parcel Service Airlines, and
President of United Parcel Service International.
Skills and
qualifications
Mr. Abney provides the Board with senior leadership, marketing /
brands, human capital management, capital deployment, global supply
chain, information security / data privacy, financial management,
risk management, reputation management, and ESG skills developed
over his more than 40 years of service with UPS in senior
leadership positions with escalating levels of responsibility and
as CEO where he was responsible for many of the functions requiring
those skills. In addition, his service on other public company
boards, including experience as a board chair, has enhanced those
skills and strengthens the Board’s collective oversight capability.
He also has experience with the roles and responsibilities of
different board committees through current or prior service on the
audit, nominating and governance, compensation, finance, and/or
policy committees of other public company boards.
Other public company
boards
|
|
David P.
Abney
|
|
Age 67
Director since 2021
Independent
|
|
Committees
•
Infrastructure & Finance
|
|
Current
Freeport-McMoRan Inc.
Northrop Grumman Corporation
|
Within past
five years
Macy’s, Inc.
Johnson Controls International plc
United Parcel Service, Inc.
|
Other past
boards
Allied Waste Industries, Inc.
|
|
|
|
|
|
| |
|
|
| |
TARGET
CORPORATION 2023 Proxy Statement |
23 |
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 |
Founding
Partner, E2SG Partners, LP /
Former Chairman & CEO, Ecolab Inc.
Background
Douglas M. Baker, Jr. is a Founding Partner of E2SG Partners, LP, a
company that invests in new green technologies. He has served in
this role since July 2022. Mr. Baker previously served as Executive
Chairman of Ecolab Inc., a provider of water and hygiene services
and technologies for the food, hospitality, industrial, and energy
markets, from January 2021 through May 2022 and as Chairman of the
Board & Chief Executive Officer from May 2006 to December 2020.
He previously held various other leadership positions within
Ecolab, including President and Chief Operating Officer.
Skills and
qualifications
Mr. Baker provides the Board with senior leadership, marketing /
brands, human capital management, capital deployment, global supply
chain, information security / data privacy, financial management,
risk management, reputation management, and ESG skills. Those
skills were developed over his more than 30 years of service with
Ecolab in a variety of positions, including as CEO where he was
responsible for many of the functions requiring those skills, and
in brand management roles at The Procter & Gamble Company. With
respect to ESG, Mr. Baker made environmental stewardship one of
Ecolab’s core values during his CEO tenure and has continued that
work with E2SG Partners focusing on environmentally conscious and
sustainable solutions. In addition, his prior tenure as Target’s
Lead Independent Director and service on other public company
boards, including experience as a board chair, has enhanced his
skills and strengthens the Board’s collective oversight capability.
He also has experience with the roles and responsibilities of
different board committees through current or prior service on
audit, compensation, nominating and governance, risk management,
executive, community reinvestment and public policy, and/or safety,
health, and environmental committees of other public company
boards.
Other public company
boards
|
|
Douglas M.
Baker, Jr.
|
|
Age 64
Director since 2013
Independent
|
|
Committees
•
Governance & Sustainability (Chair)(1)
•
Compensation & Human Capital Management
|
|
Current
Merck & Co., Inc.
|
Within past
five years
Ecolab Inc.
U.S. Bancorp
|
Other past
boards
None
|
|
|
|
|
|
 |
Founder, The
Overtone Group, L.L.C. /
Former Chairman & CEO, Cardinal Health, Inc.
Background
George S. Barrett is the Founder of The Overtone Group, L.L.C., an
advisory firm focused on providing strategic and operational
guidance to profit and non-profit organizations, and on the
development of C-suite and emerging leaders. He previously served
as Chairman & Chief Executive Officer of Cardinal Health, Inc.,
a global integrated healthcare services and products company from
August 2009 until the end of 2017, when he became Executive
Chairman, a position he held until November 2018. Mr. Barrett
previously held a number of executive positions with global
pharmaceutical manufacturer Teva Pharmaceutical Industries Ltd.,
including Chief Executive Officer of its North American business
and Executive Vice President for global pharmaceuticals.
Skills and
qualifications
Mr. Barrett provides the Board with senior leadership, human
capital management, capital deployment, global supply chain,
financial management, risk management, reputation management, and
ESG skills developed over his more than 30 years of service in the
healthcare industry with Cardinal Health, Teva, and Alpharma Inc.
During that time, he held executive leadership positions with
escalating levels of responsibility, culminating in his role as
Chairman and CEO of Cardinal Health where he was responsible for
many of the functions requiring those skills. Mr. Barrett also
teaches leadership at both Columbia University Mailman School of
Public Health and at NYU Stern School of Business and serves as a
Co-Chair of the National Academy of Medicine Action Collaborative
on Decarbonizing the U.S. Health Sector. In addition, his service
on other public company boards, including experience as a board
chair, has enhanced his skills and strengthens the Board’s
collective oversight capability. He also has experience with the
roles and responsibilities of different board committees through
current or prior service on the audit, compensation, and finance
committees of other public company boards.
Other public company
boards
|
|
George S.
Barrett
|
|
Age 68
Director since 2018
Independent
|
|
Committees
•
Compensation & Human Capital Management
•
Governance & Sustainability(1)
|
|
Current
None
|
Within past
five years
Montes Archimedes Acquisition Corp.
|
Other past
boards
Cardinal Health, Inc.
Eaton Corporation plc
|
|
|
|
|
|
(1)
Mr. Barrett was chosen to succeed Mr. Baker as Chair of the
Governance & Sustainability Committee, effective June 2023. At
that time, Mr. Baker will continue serving as a member of the
Governance & Sustainability Committee.
| |
|
|
| |
TARGET
CORPORATION 2023 Proxy Statement |
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 |
President
& CEO, Elevance Health, Inc. (fka Anthem, Inc.)
Background
Gail K. Boudreaux has served as the President & Chief Executive
Officer of Elevance Health, Inc., a leading health benefits
provider, since November 2017. Ms. Boudreaux previously served as
Chief Executive Officer of GKB Global Health, LLC, a healthcare
consulting company, and held executive level leadership positions
at UnitedHealth Group, Inc. (and its subsidiary, UnitedHealthcare),
Health Care Services Corporation, and Aetna, Inc.
Skills and
qualifications
Ms. Boudreaux provides the Board with senior leadership, human
capital management, capital deployment, digital tools / data
analytics, information security / data privacy, financial
management, risk management, reputation management, and ESG skills
developed over her more than 30 years of experience in the
healthcare and insurance industry with Elevance Health,
UnitedHealth Group, Health Care Services Corporation, and Aetna.
During that time, she has held executive leadership positions with
escalating levels of responsibility, and in her current role as CEO
of Elevance Health she is responsible for many of the functions
requiring those skills and led the transformation of Elevance
Health into a digital-first healthcare company. In addition, her
service on other public company boards has enhanced those skills
and strengthens the Board’s collective oversight capability. She
also has experience with the roles and responsibilities of
different board committees through current or prior service on the
audit, compensation, nominating and governance, risk management,
and/or operations, nuclear, environmental, and safety committees of
other public company boards.
Other public company
boards
|
|
Gail K.
Boudreaux
|
|
Age 62
Director since 2021
Independent
|
|
Committees
•
Infrastructure & Finance
|
|
Current
Elevance Health, Inc.
|
Within past
five years
Zimmer Biomet Holdings, Inc.
|
Other past
boards
Genzyme Corporation
Novavax, Inc.
Xcel Energy, Inc.
|
|
|
|
|
|
 |
Chair &
CEO, Target Corporation
Background
Brian C. Cornell has served as Chair & Chief Executive Officer
of Target Corporation since August 2014. Mr. Cornell previously
served as Chief Executive Officer of PepsiCo Americas Foods, a
division of PepsiCo, Inc.
Skills and
qualifications
Mr. Cornell provides the Board with significant retail knowledge
that support his leadership of Target, its business needs, and the
different skills required to meet those needs, including retail
industry experience, senior leadership, marketing / brands, human
capital management, capital deployment, global supply chain,
digital tools / data analytics, information security / data
privacy, financial management, risk management, reputation
management, and ESG. Those skills were developed through his more
than 30 years in escalating leadership positions at leading retail
and global consumer product companies, including three CEO roles
and more than two decades doing business in North America, Asia,
Europe, and Latin America. His experience, which includes roles
with PepsiCo, Sam’s Club, Wal-Mart Stores, Safeway Inc., and
Michaels Stores, Inc. provides important perspectives, having
served both as a vendor partner and a competitor to Target. He
currently serves on the National Retail Federation’s executive
committee and on The Business Council and previously served as
chairman of the Retail Industry Leadership Association. In
addition, his service on other public company boards, including
experience as a non-executive board chair, has enhanced his skills
and strengthens the Board’s collective oversight capability. He
also has experience with the roles and responsibilities of
different board committees through current or prior service on the
audit, compensation, nominating and governance, executive and
finance, infrastructure, and technology committees of other public
company boards.
Other public company
boards
|
|
Brian C.
Cornell
|
|
Age 64
Director since 2014
Chair of the Board since 2014
|
|
Committees
|
|
Current
Yum! Brands, Inc.
|
Within past
five years
None
|
Other past
boards
The Home Depot, Inc.
OfficeMax Inc.
Polaris Industries Inc.
|
|
|
|
|
|
| |
|
|
| |
TARGET
CORPORATION 2023 Proxy Statement |
25 |
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 |
Former
President & CEO, Safeway Inc.
Background
Robert L. Edwards is the former President & Chief Executive
Officer of Safeway Inc., a United States food and drug retail
company. He also served as President & Chief Executive Officer
of AB Acquisition LLC, a North American food and drug retail
company due to Albertsons’ acquisition of Safeway Inc. Mr. Edwards
previously held several other executive level positions with
Safeway Inc., including President & Chief Financial Officer and
Executive Vice President & Chief Financial Officer. He also
held executive positions at Maxtor Corporation and Imation
Corporation.
Skills and
qualifications
Mr. Edwards provides the Board with retail industry experience,
senior leadership, human capital management, capital deployment,
global supply chain, information security / data privacy, financial
management, risk management, and reputation management skills
developed over his more than 40 years of service, including as CEO
of Safeway where he was responsible for many of the functions
requiring those skills, as CFO of Safeway, Maxtor, and Imation, and
in positions of increasing responsibility in the areas of finance,
administration, and corporate development at Santa Fe Industries.
In addition, his service on other public company boards, including
experience as a vice chair, has enhanced those skills and
strengthens the Board’s collective oversight capability. He also
has experience with the roles and responsibilities of different
board committees through current or prior service on the audit,
compensation, nominating and governance, and finance committees of
other public company boards.
Other public company
boards
|
|
Robert L.
Edwards
|
|
Age 67
Director since 2015
Independent
|
|
Committees
•
Infrastructure & Finance
|
|
Current
None
|
Within past
five years
Blackhawk Network Holdings, Inc.
|
Other past
boards
Flextronics International Ltd.
KKR Financial Holdings LLC
Safeway Inc.
Spansion Inc.
|
|
|
|
|
|
 |
Former
Chairman & CEO, The Clorox Company
Background
Donald R. Knauss is the former Chairman & Chief Executive
Officer of The Clorox Company, a leading multinational manufacturer
and marketer of consumer and professional products. He also served
as Executive Chairman of The Clorox Company. Mr. Knauss previously
served as Executive Vice President and Chief Operating Officer of
Coca-Cola North America and in various other senior management
roles for its subsidiary businesses, and held various marketing and
sales positions with PepsiCo, Inc. and The Procter & Gamble
Company. Mr. Knauss also served as an Officer in the United States
Marine Corps.
Skills and
qualifications
Mr. Knauss provides the Board with retail industry experience,
senior leadership, marketing / brands, human capital management,
capital deployment, global supply chain, financial management, risk
management, reputation management, and ESG skills developed over
his more than 40 years of service in the consumer products
business. During that time, he held positions of increasing
responsibility across several well-known companies, including
Clorox, Coca-Cola, PepsiCo, and Procter & Gamble, culminating
in his role as CEO of Clorox where he was responsible for many of
the functions requiring those skills. With respect to ESG, Mr.
Knauss provides an understanding of environmental matters based on
raw materials used in Clorox’s business and the focus on
sustainable packaging at Coca-Cola. In addition, his service on
other public company boards, including experience as an executive
chair, non-executive chair, and lead independent director, has
enhanced those skills and strengthens the Board’s collective
oversight capability. He also has experience with the roles and
responsibilities of different board committees through current or
prior service on the audit, compensation, nominating and
governance, executive, finance, manufacturing, consumer, and
shopper marketing, and/or board affairs committees of other public
company boards.
Other public company
boards
|
|
Donald R.
Knauss
|
|
Age 72
Director since 2015
Independent
|
|
Committees
•
Infrastructure & Finance (Chair)
•
Compensation & Human Capital Management
|
|
Current
Kellogg Company
McKesson Corporation
|
Within past
five years
None
|
Other past
boards
The Clorox Company
URS Corporation
|
|
|
|
|
|
| |
|
|
| |
TARGET
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 |
Chair,
President & CEO, CDW Corporation
Background
Christine A. Leahy is the Chair, President & Chief Executive
Officer of CDW Corporation, a multi-brand technology solutions
provider to business, government, education, and healthcare
customers. She has served as Chair of the board of CDW since
January 2023 and as President & Chief Executive Officer since
January 2019, and served as Chief Revenue Officer from July 2017 to
December 2018. She also previously served CDW as Senior Vice
President–International and Chief Legal Officer/General Counsel and
Corporate Secretary. Before joining CDW Corporation, she was a
corporate law partner in the Chicago office of Sidley Austin LLP,
an international business law firm.
Skills and
qualifications
Ms. Leahy provides the Board with senior leadership, human capital
management, global supply chain, information security / data
privacy, financial management, risk management, reputation
management, and ESG skills developed over her more than 20 years of
service with CDW in executive leadership positions with escalating
levels of responsibility across multiple functions and in her
corporate law career at Sidley Austin. In her current role as
Chair, President & CEO of CDW she is responsible for many of
the functions requiring those skills. In addition, her service on
CDW’s board of directors has enhanced those skills and strengthens
the Board’s collective oversight capability. She also has
experience with the roles and responsibilities of different board
committees through her prior role as Chief Legal Officer/General
Counsel and Corporate Secretary of CDW and in advising clients as a
corporate law partner at Sidley Austin.
Other public company
boards
|
|
Christine A.
Leahy
|
|
Age 58
Director since 2021
Independent
|
|
Committees
•
Compensation & Human Capital Management
•
Governance & Sustainability
|
|
Current
CDW Corporation
|
Within past
five years
None
|
Other past
boards
None
|
|
|
|
|
|
|
|
Former Chair
& CEO, ImpreMedia, LLC
Background
Monica C. Lozano is the former President and Chief Executive
Officer of The College Futures Foundation. She held that position
from December 2017 until July 2022. She also co-founded The Aspen
Institute Latinos and Society Program and served as Chair of its
Advisory Board from January 2015 to October 2019. Ms. Lozano
previously served as Chairman of U.S. Hispanic Media, Inc., a
leading Hispanic news and information company. Ms. Lozano
previously served in the roles of Chair and Chief Executive Officer
of ImpreMedia, LLC, a leading Hispanic news and information company
and wholly owned subsidiary of U.S. Hispanic Media, Inc. Ms. Lozano
also served as Chief Executive Officer and Publisher of La Opinión,
a subsidiary of ImpreMedia, LLC, and in several management-level
roles with the company. Ms. Lozano also serves on the board of the
Weingart Foundation, a private grantmaking foundation advancing
racial, social, and economic justice in Southern California, and
previously served as a trustee of both the University of California
and the University of Southern California.
Skills and
qualifications
Ms. Lozano provides the Board with senior leadership, marketing /
brands, human capital management, digital tools / data analytics, financial
management, risk management, reputation management, and ESG skills
developed over her more than 40 years of service in the news,
information, and media industry and with a variety of non-profit
boards and advisory groups. Notably, while CEO of ImpreMedia, she
developed digital tools / data analytics skills while
leading the company as an early adopter of digital platforms, and
has continued to increase those skills as a member of the board of
directors of Apple Inc. Her role as Target’s Lead Independent
Director and service on other public company boards has enhanced
her skills and strengthens the Board’s collective oversight
capability. She also has experience with the roles and
responsibilities of different board committees through current or
prior service on the audit, compensation, nominating and
governance, enterprise risk, credit, asset quality, executive,
and/or ethics, quality, and compliance committees of other public
company boards.
Other public company
boards
|
|
Monica C.
Lozano
|
|
Age 66
Director since 2016
Lead Independent Director since 2021
|
|
Committees
•
Compensation & Human Capital Management (Chair)
•
Governance & Sustainability
|
|
Current
Apple Inc.
Bank of America Corporation
|
Within past
five years
None
|
Other past
boards
The Walt Disney Company
Tenet Healthcare Corporation
|
|
|
|
|
|
| |
|
|
| |
TARGET
CORPORATION 2023 Proxy Statement |
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 |
Former
Executive Vice President, Chief Operations Officer, PepsiCo,
Inc.
Background
Grace Puma is the former Executive Vice President, Chief Operations
Officer at PepsiCo, Inc., a multinational food, snack, and beverage
corporation. She held that position from 2017 until April 2022.
Previously, Ms. Puma served PepsiCo, Inc. as Senior Vice President,
Chief Supply Officer and Senior Vice President, Global Chief
Procurement Officer. She also served as Senior Vice President,
Global Chief Procurement Officer at United Airlines Holdings, Inc.
and held a variety of positions at Kraft Foods, Inc. and Motorola,
Inc.
Skills and
qualifications
Ms. Puma provides the Board with retail industry experience, senior
leadership, human capital management, capital deployment, global
supply chain, financial management, risk management, and ESG skills
developed over her more than 30 years of service with escalating
levels of responsibility across multiple functions at a variety of
well-known companies, including over a decade with PepsiCo. As
Chief Operations Officer at PepsiCo she was responsible for many of
the functions requiring those skills. With respect to ESG, Ms. Puma
was a member of the PepsiCo executive steering team that evaluated
ESG strategy and program recommendations. In addition, her service
on other public company boards has enhanced her skills and
strengthens the Board’s collective oversight capability. She also
has experience with the roles and responsibilities of different
board committees through current or prior service on the audit and
finance and talent committees of other public company boards.
Other public company
boards
|
|
Grace Puma
|
|
Age 60
Director since 2022
Independent
|
|
Committees
•
Infrastructure & Finance
|
|
Current
Organon & Co.
|
Within past
five years
Williams-Sonoma, Inc.
|
Other past
boards
None
|
|
|
|
|
|
 |
Former
Executive Vice President, CVS Health Corporation /
Former President, CVS Caremark
Background
Derica W. Rice is the former Executive Vice President of CVS Health
Corporation, a provider of health services and plans in the United
States, and former President of CVS Caremark, the pharmacy benefits
management business of CVS Health Corporation. He served in those
positions from March 2018 to February 2020. Mr. Rice previously
held several other executive level positions over nearly three
decades with Eli Lilly and Company, a pharmaceutical company,
including Chief Financial Officer and Executive Vice President,
Global Services.
Skills and
qualifications
Mr. Rice provides the Board with retail industry experience, senior
leadership, human capital management, capital deployment, global
supply chain, information security / data privacy, financial
management, risk management, reputation management, and ESG skills
developed over his more than 30 years of service with escalating
levels of responsibility across finance and operations at Eli Lily
and CVS. As Executive Vice President of CVS Health Corporation and
President of CVS Caremark he was responsible for many of the
functions requiring those skills. In addition, his service on other
public company boards has enhanced those skills and strengthens the
Board’s collective oversight capability. He also has experience
with the roles and responsibilities of different board committees
through current or prior service on the audit, compensation, and
nominating and governance committees of other public company
boards.
Other public company
boards
|
|
Derica W.
Rice
|
|
Age 58
Director since 2020
Independent
|
|
Committees
•
Infrastructure & Finance
|
|
Current
Bristol-Myers Squibb Company
The Carlyle Group Inc.
The Walt Disney Company
|
Within past
five years
None
|
Other past
boards
Target Corporation(1)
|
|
|
|
|
|
(1)
Mr. Rice previously served on our Board from September 2007 to
January 2018.
| |
|
|
| |
TARGET
CORPORATION 2023 Proxy Statement |
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 |
Former
Senior Vice President & Special Advisor to the Chairman,
General Electric Company
Background
Dmitri L. Stockton is the former Senior Vice President &
Special Advisor to the Chairman of General Electric Company, a
global infrastructure and technology conglomerate. Mr. Stockton
previously held several other executive level positions with
General Electric Company, including Chairman, President, &
Chief Executive Officer of GE Asset Management Incorporated,
President & Chief Executive Officer of GE Capital Global
Banking, Senior Vice President of General Electric Company based in
London, President & Chief Executive Officer of GE Consumer
Finance, Central & Eastern Europe, and Vice President of
General Electric Company.
Skills and
qualifications
Mr. Stockton provides the Board with senior leadership, marketing /
brands, human capital management, capital deployment, information
security / data privacy, financial management, risk management,
reputation management, and ESG skills developed over his more than
30 years of service with General Electric Company in senior
leadership positions with escalating levels of responsibility,
including different CEO roles where he was responsible for many of
the functions requiring those skills. In addition, his service on
other public company boards has enhanced those skills and
strengthens the Board’s collective oversight capability. He also
has experience with the roles and responsibilities of different
board committees through current or prior service on the audit,
compensation, finance, and/or executive committees of other public
company boards.
Other public company
boards
|
|
Dmitri L.
Stockton
|
|
Age 59
Director since 2018
Independent
|
|
Committees
•
Governance & Sustainability
|
|
Current
Deere & Company
Ryder System, Inc.
WestRock Company
|
Within past
five years
Stanley Black & Decker, Inc.
|
Other past
boards
Synchrony Financial
|
|
|
|
|
|
|
|
The Board recommends that shareholders vote For each of the nominees named above for
election to our Board.
|
| |
|
|
| |
TARGET
CORPORATION 2023 Proxy Statement |
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Director compensation
Our philosophy with respect to non-employee director compensation
is to align the interests of non-employee directors with the
interests of our shareholders and to provide market competitive
compensation commensurate with the work required to serve on
Target’s Board. In developing compensation recommendations for
directors, our external compensation consultant, Semler Brossy,
relies on its understanding of Target’s business and compensation
programs, as well as retail and general industry peer group
benchmarking. Peer group comparisons are determined by use of
compensation data obtained by our internal executive compensation
team from publicly available proxy statements and analyzed by
Semler Brossy. The companies comprising those peer groups can be
found on page 51. We do not pay any Team Member who also serves on
Target’s Board any additional compensation for serving on Target’s
Board. Currently, Brian C. Cornell, our Chair & CEO, is the
only director who is a Team Member. For information about Mr.
Cornell’s compensation, please see the CD&A beginning on page
36 and the Compensation tables beginning on page 53.
In November of each year, Semler Brossy provides an independent
recommendation for non-employee director compensation for the
following year to the Compensation & Human Capital Management
Committee for approval.
Beginning in Fiscal 2022, the Compensation & Human Capital
Management Committee approved an increase in the annual director
compensation amount from $295,000 to $310,000 to position our pay
to remain competitive with our retail and industry peer group.
Beginning in Fiscal 2022, to position the additional compensation
for directors serving as the Lead Independent Director or a
Committee Chair near the median of our combined retail and general
industry peer groups, the Compensation & Human Capital
Management Committee approved:
•
An increase from $30,000 to $35,000 for the Lead Independent
Director.
•
$25,000 as the amount for all Committee Chairs.
Compared to Fiscal 2021, the change in additional compensation for
serving as a Committee Chair was:
•
A decrease for the Audit & Risk Chair from $30,000.
•
An increase for the Compensation & Human Capital Management
Chair from $20,000.
•
An increase for the Governance & Sustainability Chair and the
Infrastructure & Finance Chair from $17,500.
General description of non-employee director
compensation
Our non-employee director compensation program allows directors to
choose one of two forms of annual compensation:
•
a combination of cash and RSUs, or
Each form under the compensation program is intended to provide
$310,000 in value to non-employee directors as follows:
|
|
|
Cash
|
|
RSUs
|
|
Combination (Cash and RSUs)
|
$
|
120,000
|
$
|
190,000
|
|
RSUs Only
|
$
|
0
|
$
|
310,000
|
The forms of annual compensation have the following terms:
•
The cash retainer is paid pro-rata in quarterly installments.
Directors may defer receipt of all or a portion of any cash
retainer into the DDCP. Deferrals earn market returns based on the
investment alternatives chosen by them from the funds offered by
the Target 401(k) Plan, except that the DDCP alternatives also
include a Target common stock fund.
•
RSUs are granted in March each year and vest quarterly over a
one-year period. Vested RSUs are converted to shares of Target
common stock immediately following a director’s departure from the
Board. Dividend equivalents are accrued on RSUs in the form of
additional RSUs, subject to the same conditions as the underlying
RSUs, and converted to shares if and after the underlying RSUs are
converted to shares.
New directors also receive a one-time grant of RSUs with a $50,000
grant date fair value upon joining the Board, as well as a
pro-rated portion of the annual compensation based on the date they
joined the Board using the “Combination (Cash and RSUs)” described
in the table at the beginning of this section.
The Lead Independent Director and Committee Chairs receive
additional compensation for those roles, which is paid: (a) in cash
if the director elects a combination of cash and RSUs, or (b) in
RSUs if the director elects all RSUs. The compensation for the Lead
Independent Director and Committee Chairs is as follows:
|
Role
|
|
Amount
|
|
Lead Independent Director
|
$
|
35,000
|
|
Audit & Risk Chair
|
$
|
25,000
|
|
Compensation & Human Capital Management Chair
|
$
|
25,000
|
|
Governance & Sustainability Chair
|
$
|
25,000
|
|
Infrastructure & Finance Chair
|
$
|
25,000
|
| |
|
|
| |
TARGET
CORPORATION 2023 Proxy Statement |
30 |
| |
|
|
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Director compensation table
|
Name
|
Fees earned or
paid in cash
|
Stock
awards(1)(2)
|
Total(3)
|
|
David P. Abney
|
$
|
120,000
|
$
|
190,113
|
$
|
310,113
|
|
Douglas M. Baker, Jr.(4)
|
$
|
145,000
|
$
|
190,113
|
$
|
335,113
|
|
George S. Barrett
|
$
|
0
|
$
|
310,071
|
$
|
310,071
|
|
Gail K. Boudreaux
|
$
|
0
|
$
|
310,071
|
$
|
310,071
|
|
Robert L. Edwards(4)
|
$
|
145,000
|
$
|
190,113
|
$
|
335,113
|
|
Melanie L. Healey
|
$
|
120,000
|
$
|
190,113
|
$
|
310,113
|
|
Donald R. Knauss(4)
|
$
|
136,667
|
$
|
190,113
|
$
|
326,780
|
|
Christine A. Leahy
|
$
|
0
|
$
|
310,071
|
$
|
310,071
|
|
Monica C. Lozano(4)
|
$
|
180,000
|
$
|
190,113
|
$
|
370,113
|
|
Mary E. Minnick(4)(5)
|
$
|
0
|
$
|
335,188
|
$
|
335,188
|
|
Grace Puma
|
$
|
60,000
|
$
|
145,162
|
$
|
205,162
|
|
Derica W. Rice
|
$
|
0
|
$
|
310,071
|
$
|
310,071
|
|
Dmitri L. Stockton
|
$
|
0
|
$
|
310,071
|
$
|
310,071
|
(1)
Amounts represent the aggregate grant date fair value of awards
that were granted in Fiscal 2022, as computed in accordance with
FASB ASC Topic 718, Stock Compensation. See Note 21, Share-Based
Compensation, in the 2022 Annual Report for a description of our
accounting and the assumptions used. Details on the stock awards
granted during Fiscal 2022, all of which are RSUs, are as
follows:
|
|
|
Stock awards
|
|
|
Name
|
|
#
of units
|
|
Grant date
fair value
|
|
|
Mr. Abney
|
|
878
|
$
|
190,113
|
|
|
Mr. Baker
|
|
878
|
$
|
190,113
|
|
|
Mr. Barrett
|
|
1,432
|
$
|
310,071
|
|
|
Ms. Boudreaux
|
|
1,432
|
$
|
310,071
|
|
|
Mr. Edwards
|
|
878
|
$
|
190,113
|
|
|
Ms. Healey
|
|
878
|
$
|
190,113
|
|
|
Mr. Knauss
|
|
878
|
$
|
190,113
|
|
|
Ms. Leahy
|
|
1,432
|
$
|
310,071
|
|
|
Ms. Lozano
|
|
878
|
$
|
190,113
|
|
|
Ms. Minnick
|
|
1,548
|
$
|
335,188
|
|
|
Ms. Puma
|
|
849
|
$
|
145,162
|
|
|
Mr. Rice
|
|
1,432
|
$
|
310,071
|
|
|
Mr. Stockton
|
|
1,432
|
$
|
310,071
|
(2)
At fiscal year-end none of the directors held any outstanding
unvested RSUs or any stock options.
(3)
In addition to the amounts reported, all directors also receive a
10% discount on merchandise purchased at Target stores and
Target.com, both during active service and following retirement.
Non-employee directors are also provided with $100,000 of
accidental death life insurance.
(4)
The following directors received additional compensation in Fiscal
2022 for their roles as Committee Chairs and, in the case of Ms.
Lozano, as Lead Independent Director. The additional compensation
is reflected in “Fees earned or paid in cash” and/or “Stock awards”
based on the form of annual compensation selected by the director
as described under the heading “General description of director
compensation.”
|
|
|
Name
|
Role(s) during Fiscal 2022
|
|
|
|
Mr. Baker
|
Governance & Sustainability Chair
|
|
|
|
Mr. Edwards
|
Audit & Risk Chair
|
|
|
|
Mr. Knauss
|
Infrastructure & Finance Chair (since June 2022)
|
|
|
|
Ms. Lozano
|
Lead Independent Director
Compensation & Human Capital Management Chair
|
|
|
|
Ms. Minnick
|
Infrastructure & Finance Chair (until June 2022)
|
|
(5)
Ms. Minnick did not seek re-election and left the Board when her
term ended at the 2022 Annual Meeting. In accordance with our
director compensation program, any unvested awards as of the
departure date were forfeited.
|
|
| |
|
|
| |
TARGET
CORPORATION 2023 Proxy Statement |
31 |
| |
|
|
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Stock ownership
information
Stock
ownership guidelines
Stock ownership that must be disclosed in the 2023 Proxy Statement
includes shares directly or indirectly owned and shares issuable or
options exercisable that the person has the right to acquire within
60 days. Our stock ownership guidelines vary from the SEC’s
required ownership disclosure in that they do not include any
options, but do include share equivalents held under deferred
compensation arrangements as well as unvested RSUs and PBRSUs at
the minimum share payout. Further, our stock ownership guidelines
do not include shares that are subject to a mandatory post-exercise
holding period (while the shares are subject to that holding
period). We believe our stock ownership guidelines for our
directors and members of our Leadership Team are aligned with
shareholders’ interests because the guidelines reflect equity that
has economic exposure to both upside and downside risk.
|
|
Ownership guidelines by position
|
|
Directors
5x annual cash retainer
|
|
CEO
7x base salary
|
|
Other Leadership Team
3x base salary
|
|
|
Equity used to meet stock ownership guidelines
|
|
Yes
|
•
Outstanding shares that the person beneficially owns or is deemed
to beneficially own, directly or indirectly, under the federal
securities laws.
•
PBRSUs (at their minimum share payout, which is 75% of the at-goal
payout level) and RSUs, whether vested or unvested.
•
Deferred compensation amounts that are indexed to Target common
stock, but ultimately paid in cash.
|
|
No
|
•
Options, regardless of when they are exercisable.
•
PSUs because their minimum share payout is 0% of the at-goal payout
level.
•
Shares that are subject to a mandatory post-exercise holding period
(while the shares are subject to that holding period).
|
All directors and members of our Leadership Team are expected to
achieve the required levels of ownership under our stock ownership
guidelines before the end of the fifth full fiscal year occurring
after their election or appointment. If a director or member of our
Leadership Team has not satisfied the ownership guideline amounts
on the Compliance Date, they must retain all shares acquired on the
vesting of equity awards or the exercise of stock options
(in all cases net of exercise costs and taxes) until the
required level of ownership is achieved. In addition, if a member
of our Leadership Team is below the ownership guideline amounts
before the Compliance Date, they must retain at least 50% of all
shares acquired on the vesting of equity awards or the exercise of
stock options (in all cases net of exercise costs and taxes) until
the required level of ownership is achieved.
| |
|
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TARGET
CORPORATION 2023 Proxy Statement |
32 |
| |
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|
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The following table shows the holdings of our current directors and
our NEOs recognized for purposes of our stock ownership guidelines
as of April 5, 2023 and the respective ownership guidelines
calculations.
|
|
|
RSUs &
PBRSUs
|
|
Share
equivalents
|
|
Other
shares
held(1)
|
Total stock
ownership for
guidelines
(# of shares)(1)
|
Stock
ownership
guidelines
calculation
|
|
Directors
|
|
|
|
|
|
|
|
|
Multiple of
annual cash
retainer(2)
|
|
David P. Abney(3)
|
|
2,630
|
|
0
|
|
0
|
|
2,630
|
|
3.6
|
|
Douglas M. Baker, Jr.
|
|
31,840
|
|
0
|
|
3,895
|
|
35,735
|
|
49.2
|
|
George S. Barrett
|
|
13,308
|
|
0
|
|
0
|
|
13,308
|
|
18.3
|
|
Gail K. Boudreaux
|
|
3,911
|
|
0
|
|
0
|
|
3,911
|
|
5.4
|
|
Robert L. Edwards
|
|
18,006
|
|
0
|
|
10,000
|
|
28,006
|
|
38.6
|
|
Melanie L. Healey
|
|
17,377
|
|
0
|
|
0
|
|
17,377
|
|
23.9
|
|
Donald R. Knauss
|
|
18,006
|
|
0
|
|
11,688
|
|
29,694
|
|
40.9
|
|
Christine A. Leahy
|
|
4,820
|
|
0
|
|
0
|
|
4,820
|
|
6.6
|
|
Monica C. Lozano
|
|
16,065
|
|
0
|
|
0
|
|
16,065
|
|
22.1
|
|
Grace Puma(4)
|
|
2,772
|
|
0
|
|
315
|
|
3,087
|
|
4.3
|
|
Derica W. Rice
|
|
6,077
|
|
0
|
|
0
|
|
6,077
|
|
8.4
|
|
Dmitri L. Stockton
|
|
14,047
|
|
0
|
|
0
|
|
14,047
|
|
19.3
|
|
NEOs
|
|
|
|
|
|
|
|
|
Multiple of base
salary(2)
|
|
Brian C. Cornell
|
|
68,856
|
|
9,878
|
|
430,114
|
|
508,848
|
|
60.1
|
|
Michael J. Fiddelke
|
|
13,899
|
|
0
|
|
46,867
|
|
60,766
|
|
13.4
|
|
John J. Mulligan
|
|
26,662
|
|
0
|
|
108,644
|
|
135,306
|
|
22.4
|
|
Don H. Liu
|
|
13,172
|
|
0
|
|
51,478
|
|
64,650
|
|
16.4
|
|
A. Christina Hennington
|
|
10,545
|
|
3,561
|
|
32,148
|
|
46,254
|
|
10.5
|
(1)
The “Total stock ownership for guidelines” calculation, like the
required disclosure of “Total shares beneficially owned” on page
34, includes “Other shares held” but differs by (a) excluding (i)
all options, regardless of whether they can be converted into
common stock on or before June 4, 2023 and (ii) shares that are
subject to a mandatory post-exercise holding period (while the
shares are subject to that holding period) and (b) including (i)
share equivalents that are held under deferred compensation
arrangements and (ii) RSUs and PBRSUs (at their minimum share
payout, which is 75% of the at-goal payout level), whether vested
or unvested, even if they will be converted into common stock more
than 60 days from April 5, 2023.
(2)
Based on closing stock price of $165.24 as of April 5, 2023 and the
annual cash retainer or base salary, as applicable, in effect as of
the end of Fiscal 2022.
(3)
Mr. Abney joined the Board on August 11, 2021, and currently
complies with our stock ownership guidelines because he has five
years from the start of Fiscal 2022 to meet the required stock
ownership level of 5x annual cash retainer.
(4)
Ms. Puma joined the Board on August 10, 2022, and currently
complies with our stock ownership guidelines because she has five
years from the start of Fiscal 2023 to meet the required stock
ownership level of 5x annual cash retainer.
|
| |
|
|
| |
TARGET
CORPORATION 2023 Proxy Statement |
33 |
| |
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Beneficial ownership of directors and
executive officers
The following table includes information about the shares of Target
common stock (our only outstanding class of equity securities)
which are beneficially owned on April 5, 2023 or which the person
has the right to acquire within 60 days of that date for each
director, NEO in the “Summary compensation table” on page 53, and
all current Target directors and executive officers as a group.
|
Directors
|
|
Shares
issuable
within
60 days(1)
|
|
Stock options
exercisable
within
60 days
|
|
Other
shares held
|
|
Total shares
beneficially
owned(2)
|
|
David P. Abney
|
|
1,756
|
|
0
|
|
0
|
|
1,756
|
|
Douglas M. Baker, Jr.
|
|
30,298
|
|
0
|
|
3,895
|
|
34,193
|
|
George S. Barrett
|
|
11,882
|
|
0
|
|
0
|
|
11,882
|
|
Gail K. Boudreaux
|
|
2,485
|
|
0
|
|
0
|
|
2,485
|
|
Robert L. Edwards
|
|
17,132
|
|
0
|
|
10,000
|
|
27,132
|
|
Melanie L. Healey
|
|
16,503
|
|
0
|
|
0
|
|
16,503
|
|
Donald R. Knauss
|
|
17,132
|
|
0
|
|
11,688
|
|
28,820
|
|
Christine A. Leahy
|
|
3,394
|
|
0
|
|
0
|
|
3,394
|
|
Monica C. Lozano
|
|
15,191
|
|
0
|
|
0
|
|
15,191
|
|
Grace Puma
|
|
1,346
|
|
0
|
|
315
|
|
1,661
|
|
Derica W. Rice
|
|
4,651
|
|
0
|
|
0
|
|
4,651
|
|
Dmitri L. Stockton
|
|
12,621
|
|
0
|
|
0
|
|
12,621
|
|
NEOs
|
|
|
|
|
|
|
|
|
|
Brian C. Cornell
|
|
0
|
|
0
|
|
430,114
|
|
430,114
|
|
Michael J. Fiddelke
|
|
0
|
|
0
|
|
46,867
|
|
46,867
|
|
John J. Mulligan
|
|
0
|
|
0
|
|
108,644
|
|
108,644
|
|
Don H. Liu
|
|
0
|
|
0
|
|
51,478
|
|
51,478
|
|
A. Christina Hennington
|
|
0
|
|
0
|
|
32,148
|
|
32,148
|
|
All current directors and executive officers
|
|
|
|
|
|
|
|
|
|
As a group (21 persons)
|
|
134,391
|
|
36,819
|
|
873,066(3)
|
|
1,044,276
|
(1)
Includes shares of common stock that the named individuals may
acquire on or before June 4, 2023 pursuant to the conversion of
vested RSUs into common stock.
(2)
All directors and executive officers as a group own less than 1% of
Target’s outstanding common stock. The persons listed have sole
voting and investment power with respect to the shares listed.
(3)
Includes shares of common stock owned by executive officers in the
Target 401(k) Plan as of April 5, 2023.
|
| |
|
|
| |
TARGET
CORPORATION 2023 Proxy Statement |
34 |
| |
|
|
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Beneficial ownership of Target’s
largest shareholders
The following table includes certain information about each person
or entity known to us to be the beneficial owner of more than five
percent of our common stock:
|
Name and address of >5% beneficial owner
|
Number of
common shares
beneficially owned
|
Percent of
class(1)
|
|
The Vanguard Group
100 Vanguard Boulevard
Malvern, Pennsylvania 19355
|
42,782,234(2)
|
9.3%
|
|
BlackRock, Inc.
55 East 52nd Street
New York, New York 10055
|
34,281,026(3)
|
7.4%
|
|
State Street Corporation
State Street Financial Center
One Lincoln Street
Boston, Massachusetts 02111
|
33,123,664(4)
|
7.2%
|
|
Capital World Investors
333 South Hope Street
55th Floor
Los Angeles, California 90071
|
31,778,911(5)
|
6.9%
|
(1)
Based on shares outstanding on April 5, 2023.
(2)
The Vanguard Group (Vanguard), as an investment adviser, reported
its direct and indirect beneficial ownership on a Schedule 13G/A
filed with the SEC on February 9, 2023. The filing indicates that
as of December 30, 2022, Vanguard had sole voting power for 0
shares, shared voting power for 666,024 shares, sole dispositive
power for 40,869,258 shares, and shared dispositive power for
1,912,976 shares.
(3)
BlackRock, Inc. (BlackRock), as a parent holding company, reported
its direct and indirect beneficial ownership on a Schedule 13G/A
filed with the SEC on January 31, 2023. The filing indicates
that as of December 31, 2022, BlackRock had sole voting power for
30,160,776 shares, shared voting power for 0 shares, sole
dispositive power for 34,281,026 shares, and shared dispositive
power for 0 shares.
(4)
State Street Corporation (State Street), as a parent holding
company, reported its direct and indirect beneficial ownership in
various fiduciary capacities (including as trustee under the Target
401(k) Plan) on a Schedule 13G/A filed with the SEC on February 10,
2023. The filing indicates that as of December 31, 2022, State
Street had sole voting power for 0 shares, shared voting power for
30,191,233 shares, sole dispositive power for 0 shares, and shared
dispositive power for 33,040,753 shares, and that State Street
Global Advisors Trust Company (SSgA Trust), a subsidiary of State
Street, had sole voting power for 0 shares, shared voting power for
10,182,506, sole dispositive power for 0 shares, shared dispositive
power for 23,984,384 shares, and aggregate beneficial ownership of
23,985,284 shares. Based on that information, SSgA Trust is also a
beneficial owner of more than five percent of our common stock,
holding 5.2% of Target’s outstanding common shares.
(5)
Capital World Investors (CWI), as an investment adviser, reported
its direct and indirect beneficial ownership on a Schedule 13G
filed with the SEC on February 13, 2023. The filing indicates that
as of December 30, 2022, CWI had sole voting power for 31,742,632
shares, shared voting power for 0 shares, sole dispositive power
for 31,778,911 shares, and shared dispositive power for 0
shares.
|
Delinquent Section 16(a)
reports
SEC rules require us to disclose whether any of our directors,
officers, and beneficial owners of more than 10% of our common
stock did not timely file reports required by Section 16(a) of the
Exchange Act during the most recent fiscal year. Two of Target’s
officers, John Mulligan and Laysha Ward, each had one Form 4 filing
reporting three transactions that were not technically reported on
a timely basis during Fiscal 2022. Although both of those Form 4
filings were transmitted by our third-party filing system before
the submission deadline, the filings were not accepted by the SEC
until after the submission deadline.
| |
|
|
| |
TARGET
CORPORATION 2023 Proxy Statement |
35 |
| |
|
|
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Compensation & Human Capital
Management Committee Report
The Compensation & Human Capital Management Committee has
reviewed and discussed the following CD&A with management.
Based on this review and discussion, the Compensation & Human
Capital Management Committee recommended to the Board that the
CD&A be included in the 2022 Annual Report and the 2023 Proxy
Statement.
Compensation & Human Capital
Management Committee
Monica C. Lozano, Chair
Douglas M. Baker, Jr.
George S. Barrett
Melanie L. Healey
Donald R. Knauss
Christine A. Leahy
Compensation Discussion and Analysis
Introduction
This CD&A focuses on how our NEOs were compensated for Fiscal
2022 and how their Fiscal 2022 compensation aligned with our pay
for performance philosophy.
For Fiscal 2022 our NEOs were:
|
Name and
principal position
|
|
Brian C. Cornell
|
Chair & Chief Executive Officer
|
|
|
|
Michael J. Fiddelke
|
Executive Vice President & Chief Financial Officer
|
|
|
|
John J. Mulligan
|
Executive Vice President & Chief Operating Officer
|
|
|
|
Don H. Liu
|
Executive Vice President and Chief Legal & Risk Officer
|
|
|
|
A. Christina Hennington
|
Executive Vice President & Chief Growth Officer
|
|
| |
|
|
| |
TARGET
CORPORATION 2023 Proxy Statement |
36 |
| |
|
|
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Executive
summary
Target’s long-term growth strategy and the investments made in
taking care of our team continued to deliver top-line growth
throughout Fiscal 2022. In a year marked by extraordinary
inflationary pressures and rapidly changing consumer purchasing
habits, our team was steadfast in our dedication to maintaining
momentum and relevance with our guests, driving traffic growth of
2.1% and revenue growth of 2.9% on top of record growth in 2020 and
2021. Same-day services (Drive Up, Order Pickup, and Shipt)
continued to resonate with our guests, growing 7% in 2022. Beyond
our fulfillment options, our balanced multi-category assortment
continued to satisfy our guests’ ever-changing needs.
Our bottom-line performance was well below expectations for Fiscal
2022, driven in part by decisive inventory actions we undertook due
to rapidly changing guest buying patterns, allowing us to offer
fresh inventory and an uncluttered shopping experience.
Industry-wide cost inflation, supply chain disruption, shortage
trends, and higher-than-expected promotional levels also pressured
profitability.
We continually keep our team at the heart of our strategy. We
foster a culture in which we care for each other, invest in the
growth of our people, and win together as a team. Caring for our
team helps us attract, retain, and develop a diverse workforce, and
create equitable and inclusive workplaces that accelerate
opportunity. In the last year, notable impacts from our total
rewards offerings included:
•
Setting a starting wage range of $15 to $24 per hour to
competitively position Target in every market in which we
operate.
•
Reducing the waiting period to enroll in our comprehensive health
care benefits package. We also lowered the working hours
requirement to enroll in Target’s benefits, including medical and
well-being benefits, and the Target 401(k) Plan. With these
changes, about 20% of our team became newly eligible for these
benefits.
•
Providing access to tuition-free undergraduate and associates
degrees through Dream to Be, our industry-leading education
assistance benefit for all Team Members. This is a part of our
ongoing commitment to promote equitable access to education and to
create inclusive career development opportunities and pathways for
our workforce.
These investments in our team demonstrate our commitment to
delivering on our Target Forward strategy, which aims in part to
create opportunity and equity for our team, partners, and guests.
Additional information about Target Forward is provided on page
15.
Despite ongoing challenges in the external environment, the
flexibility of our business model and the resilience of our team
delivered top-line growth while continuing to invest in our
business and communities, as illustrated in the “Financial
performance highlights for Fiscal 2022” on the following page.
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Financial performance highlights for Fiscal 2022
|
|
Comparable Sales growth
|
|
Sales fulfilled by stores
|
|
Change in Adjusted EPS(1)
|
|
|
|
2.2 %
|
|
96.7 %
|
|
(55.7) %
|
|
|
|
After-tax ROIC (2)
|
|
5% of profits given to communities (3)
|
|
Capital invested in the business
|
|
|
|
12.6%
|
|
$328M
|
|
$5.5B
|
|
(1)
Adjusted EPS, a non-GAAP metric, excludes the impact of certain
items. See page 24 of the 2022 Annual Report for a reconciliation
of Adjusted EPS to GAAP diluted EPS and page 20 of the 2022 Annual
Report for the calculation of the “Change in Adjusted EPS” provided
above.
(2)
ROIC is a ratio based on GAAP information, with the exception of
the add-back of operating lease interest to Operating Income. The
calculation of the number provided above is disclosed on page 26 of
the 2022 Annual Report.
(3)
Calculated based on the average of the prior three years of pre-tax
profits. Includes cash and in-kind donations from Target and the
Target Foundation.
The pay programs described throughout our CD&A align with our
pay for performance philosophy and are structured based on
financial and operational performance and shareholder outcomes.
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Shareholder support for our 2022 advisory vote on executive
compensation and shareholder outreach program
At the 2022 Annual Meeting, shareholders approved our Say on Pay
proposal in support of our executive compensation program by a vote
of 92.7%, in line with the 2021 vote of 92.9% and 2020 vote of
93.6%. We believe it is important to consider shareholder feedback
as we design and evaluate our executive compensation program.
As described on page 18, we regularly communicate with our
shareholders regarding a variety of topics and involve independent
directors in these conversations, as appropriate. We welcome
continued engagement on compensation matters and other issues
relevant to our business.
Executive compensation guiding principles
We believe executive compensation should be directly linked to
performance and long-term value creation for our shareholders. With
that in mind, three principles guide our compensation program:
•
Deliver on our pay for performance philosophy in support of our
strategy.
•
Provide a framework that encourages outstanding financial results
and shareholder returns over the long-term.
•
Attract, retain, and motivate a premier management team to sustain
our distinctive brand and its competitive advantage in the
marketplace.
A significant portion of our executive compensation is at risk, so
the actual compensation realized by our NEOs may vary from targeted
compensation based upon the level of achievement of specified
performance objectives and stock price performance.
Pay for performance
We have a long-standing belief that our executive compensation
should directly reflect our organization’s performance with
substantial emphasis on creating long-term value for our
shareholders. We do that by providing our NEOs a mix of base
salary, short-term, and long-term incentives with compensation
opportunities measured by a variety of time horizons to balance our
near-term and long-term strategic goals.
Annual TDC is the summed at-goal value of each pay component and is
used by the Compensation & Human Capital Management Committee
as the measure of the intended total value of pay at the time the
pay decision is made, understanding that the actual amount earned
will be higher or lower based on actual performance.
Consistent with our guiding principles, 92% of CEO Annual TDC and
84% of other NEO Annual TDC is performance-based. In addition, 100%
of our annual LTI awards feature relative performance-based
metrics.
Importantly, the financial metrics we use for our pay programs are
either based directly on GAAP financial measures, or in the
specific circumstances in which they are not, we explain how and
why they differ from GAAP.
(1)
Annual TDC differs from the “Total” for Fiscal 2022 in the “Summary
compensation table” on page 53 because it (a) includes STIP
opportunity at-goal as approved, rather than the actual payout that
was earned, (b) includes the annual PSU and PBRSU awards based on
the dollar value used by the Compensation & Human Capital
Management Committee in determining the number of shares granted,
rather than the aggregate grant date fair value of awards, as
computed in accordance with FASB ASC Topic 718, and (c) excludes
the items shown under the “Change in pension value and nonqualified
deferred compensation earnings” and “All other compensation”
columns.
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How annual CEO pay is tied to performance
|
|
The following pay elements are performance-based and represent a
significant percentage of Annual TDC.
•
STIP — Payouts range
from 0% to 200% of goal depending on Sales, Incentive Operating
Income, and the assessment of the team scorecard.
•
PSUs — Payouts range
from 0% to 200% of goal depending on Adjusted Sales growth, EPS
growth, and ROIC performance relative to our retail peer group.
Payout value is also tied to stock price performance.
•
PBRSUs — Payouts range
from 75% to 125% of goal depending on TSR performance relative to
our retail peer group. Payout value is also tied to stock price
performance.
|
Performance highlights
The following graphs highlight our historical performance on key
metrics that we used in our executive compensation programs over
each of the last three years. The metrics used in our compensation
program are described in more detail in the CD&A narratives for
each compensation element, as well as in the footnotes on this
page.
(1)
Sales is as reported on page 37 of the 2022 Annual Report. For our
STIP compensation element, we use Sales as reported above. For our
PSU compensation element, we use Adjusted Sales which is calculated
using Sales as reported above and the reported sales results of our
retail peer group with adjustments, if any, as described on pages
45-46.
(2)
Operating Income is as reported on page 37 of the 2022 Annual
Report and provides the basis for Incentive Operating Income, which
is one of the metrics we use in our STIP compensation element.
Incentive Operating Income, a non-GAAP metric, represents Operating
Income on a pre-short-term incentive compensation basis and is
calculated by excluding short-term incentive expense from our
Operating Income.
(3)
EPS is as reported on page 37 of our 2022 Annual Report. For PSUs,
we use EPS as reported above, except that for Fiscal 2021 we
excluded the impact of the one-time gain on sale of the Dermstore
business, which decreased the amount by $0.55 per share to
$13.55.
(4)
ROIC is a ratio based on GAAP information, with the exception of
the add-back of operating lease interest to Operating Income. For
Fiscal 2022 and Fiscal 2021 it is as reported on page 26 of the
2022 Annual Report and, for Fiscal 2020, page 26 of our 2021 Annual
Report. For PSUs, we use ROIC as reported above, except that for
Fiscal 2021 we excluded the impact of the one-time gain on sale of
the Dermstore business from net operating profit after tax and
excluded net assets of Dermstore from average invested capital in
the ROIC calculation, which decreased the amount by 1.2 percentage
points.
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Incentive measures and actual performance
Actual payouts vary based on performance against goals approved by
the Compensation & Human Capital Management Committee at the
beginning of the performance period. Our ongoing incentive programs
have a proven track record of variable payouts based on performance
over time.
•
Our STIP is based on a combination of absolute financial goals and
progress made toward key strategic priorities.
•
100% of our ongoing LTI program features performance-based metrics
and is tied to relative performance versus our retail peers over a
three-year time period.
|
|
Component
|
Weight
|
Metric
|
|
Goal(1)
|
|
Actual(1)
|
Actual
performance
as a percentage
of goal
|
Payout as a
percentage
of goal
|
|
Overall weighted
payout as a
percentage of goal
|
|
2022 STIP Performance
|
Financial
|
67%
|
Sales
|
$
|
111,094
|
$
|
107,588
|
96.8%
|
24%
|
|
16%
|
|
Incentive Operating Income(2)
|
$
|
9,632
|
$
|
4,067
|
42.2%
|
|
Team scorecard
|
33%
|
|
|
|
|
|
N/A
|
75%
|
|
25%
|
|
Total payout as a percentage
of goal
|
41%
|
|
|
Award type
|
|
Metric
|
|
Performance
rank relative to
peers
|
Actual payout as a
percentage of goal
|
Overall payout as a
percentage of goal
|
|
2020-2022 LTI Performance
|
PSUs
|
Adjusted Sales CAGR
|
5 of 19
|
184%
|
140.7%
|
|
EPS CAGR
|
11 of 19
|
78%
|
|
ROIC
|
5 of 19
|
159%
|
|
|
|
|
|
Performance
rank relative to
peers(3)
|
TSR(4)
|
Overall payout as a
percentage of goal
|
|
PBRSUs
|
TSR
|
|
9 of 18
|
38%
|
100%
|
(2)
See the “Performance highlights” tables and footnotes on page 40
for a description of how Incentive Operating Income is calculated
from our financial statements.
(3)
The retail peers for PBRSUs excludes Publix. For more information,
see “PBRSUs” on page 48.
(4)
TSR is calculated based on the stock price of each company on the
first and last day of the performance period using the average of
each company’s stock price for the 90 calendar days immediately
preceding the two measurement dates.
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Our
framework for executive compensation
Elements of annual TDC(1)
|
|
Element
|
Key
characteristics
|
Link to
shareholder
value
|
How we
determine
amount
|
|
Fixed
|
Base salary
|
Fixed compensation component payable in cash, representing less
than 20% of Annual TDC for our NEOs. Reviewed annually and adjusted
when appropriate.
|
A means to attract and retain talented executives capable of
driving superior performance.
|
Based on individual contributions to business outcomes, the scope
and complexity of each role, future potential, market data, and
internal pay equity.
|
|
|
|
|
|
|
|
Performance-based
|
Short-term
incentives
|
Variable compensation component payable in cash based on Target’s
performance against financial goals and progress made toward key
strategic priorities.
|
Financial goals are tied to achievement of key financial
measures.
NEOs are also evaluated against identified strategic initiatives
important to driving sustainable, durable, and profitable Sales
growth.
|
Financial component is based on:
•
Incentive Operating Income
Team scorecard is based on the Compensation & Human Capital
Management Committee’s assessment of our NEOs’ progress toward
strategic priorities.
|
|
Performance
share units
|
PSUs cliff vest at the end of the performance period and payouts
are based on relative performance during the performance period
versus our retail peer group.
|
PSUs recognize our NEOs for achieving superior long-term relative
performance on three key metrics:
|
Based on individual contributions to business outcomes, potential
future contributions, historical grant amounts, retention
considerations, and market data.
|
|
Performance-based
restricted
stock units
|
PBRSUs cliff vest at the end of the performance period with payouts
based on relative TSR performance during the performance period
versus our retail peer group.
|
Fosters a culture of ownership, aligns the long-term interests of
our NEOs with our shareholders, and rewards or penalizes based on
relative TSR performance.
|
Based on individual contributions to business outcomes, potential
future contributions, historical grant amounts, retention
considerations, and market data.
|
(1)
See page 39 for a description of how the Compensation & Human
Capital Management Committee uses Annual TDC and how it differs
from the “Total” in the “Summary compensation table” on page
53.
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Base salary
We provide base salary as a means to deliver a stable amount of
cash compensation to our NEOs. To align with our pay for
performance philosophy, this non-variable element of our executive
compensation represents the smallest portion of Annual TDC.
In March 2022, the Compensation and Human Capital Management
Committee approved a Fiscal 2022 base salary increase of $25,000
for Mr. Fiddelke in consideration of his performance as well as
market positioning relative to our retail and general industry
peers.
Short-term incentives
All NEOs are eligible to earn cash awards under our STIP program,
which is designed to motivate and reward executives for performance
on key annual measures. The financial component of our STIP program
is based on two financial metrics: Sales (50%) and Incentive
Operating Income (50%). See the “Performance highlights” tables and
footnotes on page 40 for a description of how Sales are reported
and how Incentive Operating Income is calculated from our financial
statements.
As disclosed in our 2022 Proxy Statement, we made one-time changes
to our Fiscal 2021 STIP design based on expected volatility in the
economy and consumer sentiment caused by the pandemic. In Fiscal
2022, we reverted to our annual financial performance goals.
The following table shows financial and team scorecard payouts
expressed as a percentage of goal. The at-goal pay opportunity is
200% of base salary for our CEO and 100% of base salary for our
other NEOs.
|
|
Fiscal 2022 (payout as a percentage of goal)
|
|
Component
|
Weight
|
Threshold
|
Goal
|
Maximum
|
|
Financial component
(Sales 50%, Incentive Operating
Income 50%)
|
67%
|
13%
|
67%
|
134%
|
|
Team scorecard
|
33%
|
7%
|
33%
|
66%
|
|
Total
|
|
20%
|
100%
|
200%
|
|
|
Fiscal 2022 financial STIP design, performance goals, and how
we performed in comparison to these goals
The Fiscal 2022 goals and actual performance were:
|
Metric
|
|
Goal
($)(1)(2)
|
|
Actual
($)(1)
|
Actual performance
as a percentage
of goal
|
|
Payout as a
percentage of goal
for each metric
|
Financial component
payout as a
percentage of goal
|
|
Sales
|
$
|
111,094
|
$
|
107,588
|
96.8%
|
|
49%
|
24%
|
|
Incentive Operating Income(3)
|
$
|
9,632
|
$
|
4,067
|
42.2%
|
|
0%
|
(2)
Threshold and maximum financial performance amounts are -/+5% of
the Sales goal and -/+15% of the Incentive Operating Income
goal.
(3)
See the “Performance highlights” tables and footnotes on page 40
for a description of how Incentive Operating Income is calculated
from our financial statements.
|
When approving the incentive design and goals in March 2022, the
Board took into account consumer environment and confidence, the
economic environment (including rising inflation), and enterprise
strategy and investments. The goals set at the beginning of the
year required growth versus the prior year as follows:
•
Our Sales goal represented a 6.2% increase over the prior year, and
a 20.2% increase over 2020.
•
Our Incentive Operating Income goal represented a 1.5% increase
over the prior year and a 34.2% increase over 2020. This
represented a 3.0% Operating Income growth over 2021 and 40.9%
growth over 2020.
The environment continued to be volatile in Fiscal 2022, and while
we maintained top-line growth, we saw significant headwinds to our
profitability:
•
Sales increased 2.8% over the prior year, driven by store Sales
growth of 3.2% (on top of 11.9% last year). The store Sales growth
was driven primarily by traffic growth as guests increasingly chose
Target as a convenient, reliable one-stop shop.
•
Incentive Operating Income decreased 57.1% from the prior year due
in part to the actions we took to address inventory challenges. In
addition, industry-wide cost inflation, supply chain disruption,
shortage trends, and unexpectedly high promotional levels also
pressured profitability.
The Compensation & Human Capital Management Committee approved
a collective STIP financial outcome of 24% of goal payout, as
generated under the plan and illustrated in the table provided
above.
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Fiscal 2022 team scorecard assessment
The team scorecard provides a general structure for discussing and
measuring performance of our NEOs as a group. The team scorecard
component of the STIP in Fiscal 2022 emphasized the business
outcomes we expect from the execution of our strategic priorities,
and represents indicators that demonstrate the health of Target’s
business and team.
For Fiscal 2022, the specific team scorecard progress indicators
included: gain market share at the enterprise level and evaluate
category level market share, advance progress on our new three-year
enterprise DE&I goals, maintain strong team engagement,
maintain utilization of same-day fulfillment services, and meet or
exceed sales plans for new and remodeled stores.
Performance against these key indicators contributed to the overall
team scorecard results:
•
Overall decrease in enterprise market share in 2022; however, all
of our core merchandise categories delivered unit share growth.
•
Positive progress on three-year enterprise DE&I goals.
•
Team member survey results show that our team continues to be
engaged in their work, with results representing a modest decrease
over the prior year.
•
Growth in same-day services, represented by 7% growth in Drive Up,
Order Pickup, and Shipt (on top of 45% growth last year), driven by
the continued investments made in our supply chain and store
operations.
•
Completed new store and remodels met or exceeded sales plans for
Fiscal 2022.
Taking into consideration the outcomes described above, the
Compensation & Human Capital Management Committee approved a
75% team scorecard payout.
Total Fiscal 2022 STIP payout
The following table shows the resulting overall weighted payout as
a percentage of goal, based on actual financial performance and
progress made on key team scorecard indicators as described
above.
|
Component
|
Weight
|
Payout as a percentage of goal
|
Overall weighted payout
as a percentage of goal(1)
|
|
Financial component
|
67%
|
24%
|
16%
|
|
Team scorecard
|
33%
|
75%
|
25%
|
|
|
|
Total payout as a percentage of goal
|
41%
|
(1)
Since the at-goal pay opportunity is 200% of base salary for our
CEO and 100% of base salary for our other NEOs, the actual payout
is 82% of base salary for our CEO and 41% of base salary for our
other NEOs.
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Long-term incentives
To align our NEOs pay outcomes with long-term performance, 100% of
our annual LTI awards feature relative performance-based metrics.
Annual LTI grants comprise the majority of each NEO’s total
compensation.
Value of LTI awarded at grant
In determining the amount of individual LTI awards, the
Compensation & Human Capital Management Committee considered
each NEO’s individual contributions to business outcomes during the
fiscal year, potential future contributions, historical annual
grant amounts, and retention considerations, as well as market data
for comparable executives from our retail and general industry peer
groups. The annual LTI awards are granted in March of each year to
ensure the full-year financial results for the most recently
completed fiscal year may be considered prior to granting the
awards. Once the total annual LTI award amount for a NEO is
determined, 60% of that is granted in the form of PSUs and 40% in
PBRSUs. Under this approach, strong long-term performance relative
to peers becomes the key driver of compensation realized by our
NEOs.
The Compensation & Human Capital Management Committee increased
Mr. Cornell’s annual LTI award by $700,000, reflective of Mr.
Cornell’s decisions that have positioned Target for long-term,
durable success over his tenure. This increase resulted in
positioning his overall TDC at the 75th percentile of the combined
peer group, which aligns with our pay for performance philosophy.
In addition, Mr. Fiddelke, Mr. Mulligan, and Mr. Liu received
annual LTI award increases of $750,000, $500,000, and $200,000,
respectively, in recognition of their contributions to business
outcomes and their demonstrated leadership.
PSUs
In March 2022, the Committee granted the 2022-2024 PSU awards. As
disclosed in the 2022 Proxy Statement, the Fiscal 2021 PSU grant
included one time design changes due to the pandemic. Target has
reverted to a performance period of three years with a maximum
payout opportunity capped at 200%.
The design of our fully relative PSU program supports the critical
drivers of our success while incenting our performance relative to
competing retailers. Our metrics reflect how we envision success in
the execution of our strategy: to grow the top-line relative to the
retail sector, to grow it profitably, and to prudently deploy
capital to drive the business.
Our PSUs have a three-year performance period with the number of
shares based on the following three equally weighted relative
metrics versus our retail peer group:
•
Adjusted Sales growth. The compound annual
growth rate in Adjusted Sales over the performance period, relative
to our retail peer group, including adjustments to our reported
results or those of our peer group, as described on the following
page.