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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.   )

 

Filed by the Registrant

Filed by a party other than the Registrant

 

Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under § 240.14a-12

TARGET CORPORATION

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

No fee required

Fee paid previously with preliminary materials

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11


 

 

 


 


 

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.

     
  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

     
  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

Place

Record Date

Wednesday, June 14, 2023

9:00 a.m. Central Daylight Time

Hotel ZaZa Austin

400 Lavaca Street

Austin, Texas 78701

 

April 17, 2023

 

Items of business

Item

Board’s Recommendation

Election of 12 directors (page 19)

FOR each Director Nominee

Ratification of Ernst & Young LLP as our independent registered public accounting firm (page 66)

FOR

Advisory approval of executive compensation (Say on Pay) (page 68)

FOR

Advisory approval of the frequency of our Say on Pay votes (Say on Pay Vote Frequency) (page 69)

1 YEAR

Shareholder proposals, if properly presented at the meeting (page 70)

AGAINST each proposal

In addition, at the 2023 Annual Meeting we will conduct any other business that may properly come before the meeting. See Question11 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.

     
  TARGET CORPORATION  2023 Proxy Statement 5

 

Advance voting

If voting in advance of the 2023 Annual Meeting, you may do so as follows:

Method(1)

Instruction

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.

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.

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.

Deadline

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.

(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.

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,

Don H. Liu

Corporate Secretary

Approximate Date of Mailing of Proxy Materials or

Internet Availability Notice:

 

May 1, 2023

 

 

Your vote is important. Thank you for voting.

     
  TARGET CORPORATION  2023 Proxy Statement 6

 

Table of contents

     
  TARGET CORPORATION  2023 Proxy Statement 7
     

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.

Practice

Description

Page(s)

Accountability to shareholders

 

Board evaluations and refreshment

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.

19-23

Annual elections

All directors are elected annually, which reinforces our Board’s accountability to shareholders.

19

Majority voting standard

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.

19

Director resignation
policy

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.

19

Proxy access

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.

79

No poison pill

We do not have a poison pill.

 

10% special meeting
threshold

Shareholders owning 10% or more of Target’s outstanding stock have the right to call a special meeting of shareholders.

 

Shareholder voting rights are proportionate to economic interests

 

Single voting class

Target common stock is the only class of voting shares outstanding.

73

One share, one vote

Each share of Target common stock is entitled to one vote.

73

Responsiveness to shareholders

 

Responses to shareholder proposals

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.

70

Understanding opposition to management proposals

As part of its shareholder engagement process, the Board seeks to understand the reasons for, and respond to, significant shareholder opposition to management proposals.

18

Availability of independent directors

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.

10, 18

Strong, independent leadership

 

Independence

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.

12, 17

Lead Independent

Director

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.

10

Annual Elections for
Lead Independent
Director and Chair

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.

10

Committee membership
and leadership rotations

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.

10-11

     
  TARGET CORPORATION  2023 Proxy Statement 8
     

Back to Contents

Practice

Description

Page(s)

Structures and practices enhance Board effectiveness

 

Diversity

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.

19, 21-23

Director tenure policies

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.

21

Director maximum outside boards policy

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).

 

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.

13-15

Management development
and succession planning

Our Board regularly reviews senior management development and succession planning, with more in-depth reviews regularly conducted by the Compensation & Human Capital Management Committee.

15

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.

15-16

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.

16-17

Capital allocation

We disclose our capital allocation policies and priorities and how they are overseen by the Board and its Committees.

17

Executive compensation incentive structures are aligned with long-term strategy

 

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.

39-40

Communicating executive compensation to shareholders

The CD&A explains how performance goals drive our executive compensation plans and connect to Target’s long-term strategy.

36-52

Follow leading compensation practices

See “Target’s executive compensation practices.”

49

 

 

 

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

Age

Director

since

Current or notable prior company

Title

Independent

Public boards

(including

Target)

David P. Abney

67

2021

United Parcel Service, Inc.

Former Chairman & CEO

Yes

3

Douglas M. Baker, Jr.

64

2013

E2SG Partners, LP /

Ecolab Inc.

Founding Partner /

Former Chairman & CEO

Yes

2

George S. Barrett

68

2018

The Overtone Group L.L.C. /
Cardinal Health, Inc.

Founder /
Former Chairman & CEO

Yes

1

Gail K. Boudreaux

62

2021

Elevance Health, Inc. (fka Anthem, Inc.)

President & CEO

Yes

2

Brian C. Cornell

64

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.

     
  TARGET CORPORATION  2023 Proxy Statement 9
     

Back to Contents

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.

     
  TARGET CORPORATION  2023 Proxy Statement 10
     

Back to Contents

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

 

 

 

 

C = Chair

= Member

 

 

 

 

 

   

 

(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.

     
  TARGET CORPORATION  2023 Proxy Statement 11
     

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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.

     
  TARGET CORPORATION  2023 Proxy Statement 12
     

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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.

     
  TARGET CORPORATION  2023 Proxy Statement 13
     

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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.

     
  TARGET CORPORATION  2023 Proxy Statement 14
     

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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)

Reputation management

Crisis management and response

Organizational team health

Audit & Risk Committee                

Compliance and ethics

Supply chain ESG matters, including vendor human capital and responsible sourcing practices

Cybersecurity and information security

Privacy

Product and food safety

     
  TARGET CORPORATION  2023 Proxy Statement 15
     

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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

DE&I

Culture and Team Member engagement

Pay equity

Broad-based compensation and benefits

Growth and development

Purpose and values

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

     
  TARGET CORPORATION  2023 Proxy Statement 16
     

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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

     
  TARGET CORPORATION  2023 Proxy Statement 17
     

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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.

     
  TARGET CORPORATION  2023 Proxy Statement 18
     

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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.

     
  TARGET CORPORATION  2023 Proxy Statement 19

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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.

     
  TARGET CORPORATION  2023 Proxy Statement 20

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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.

     
  TARGET CORPORATION  2023 Proxy Statement 21

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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.

     
  TARGET CORPORATION  2023 Proxy Statement 22

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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

 

 

 

 

 

 

 

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

 

ESG

 

Self-identified gender

 

 

 

 

 

 

 

 

 

 

 

Female

 

 

 

 

 

 

 

Male

 

 

 

 

Self-identified race / ethnicity

 

 

 

 

 

 

 

 

 

 

 

White

 

 

 

 

Black / African American

 

 

 

 

 

 

 

 

 

Hispanic / Latino

 

 

 

 

 

 

 

 

 

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

Audit & Risk

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 24

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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

Audit & Risk

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

None

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

Audit & Risk (Chair)

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 CORPORATION  2023 Proxy Statement 26

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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 27

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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

Audit & Risk

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

Audit & Risk

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 28

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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

Audit & Risk

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 29

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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

RSUs only.

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.

     
  TARGET CORPORATION  2023 Proxy Statement 32
     

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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 January31, 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.

     
  TARGET CORPORATION  2023 Proxy Statement 37
     

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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.

     
  TARGET CORPORATION  2023 Proxy Statement 38
     

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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.

     
  TARGET CORPORATION  2023 Proxy Statement 39
     

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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.

     
  TARGET CORPORATION  2023 Proxy Statement 40
     

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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%

(1)

In millions.

(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.

     
  TARGET CORPORATION  2023 Proxy Statement 41
     

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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:

Sales

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:

Adjusted Sales growth

EPS growth

ROIC

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.

     
  TARGET CORPORATION  2023 Proxy Statement 42
     

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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%

(1)

Dollars in millions.

(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.

     
  TARGET CORPORATION  2023 Proxy Statement 43
     

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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.

     
  TARGET CORPORATION  2023 Proxy Statement 44
     

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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.