A couple of weeks after Target Corporation announced the resignation of Chairman and CEO Gregg Steinhafel, the Minneapolis-based retailer disclosed in a regulatory filing that its former leader's severance package is worth about $16 million.
Twin Cities Business, citing evidence from earlier regulatory filings, recently reported that Steinhafel’s so-called “golden parachute” would be worth millions of dollars, with the value depending in part on whether Steinhafel’s departure was characterized as “involuntary.”
In a Monday filing with the U.S. Securities and Exchange Commission (SEC), the company described Steinhafel’s exit as an “involuntary termination for reasons other than for cause.”
Target disclosed that Steinhafel’s exit package includes $7.2 million in severance payments and nearly $10 million to be paid through an “officer deferred compensation plan,” a program that was closed to new participants in 1996 but applies to Steinhafel, who joined Target in 1979 and was appointed CEO in 2008.
The package also includes more than $4 million worth of stock awards, based on the company’s current stock price. Together, those items bring the value of Steinhafel’s severance package to about $21 million—but he’s required to pay back about $5.4 million worth of other “early retirement benefits,” bringing the total value to about $16 million.
The exact value will hinge on interest rates and on Target's stock price on the last day of Steinhafel's employment; he's currently in an advisory role but will depart that role no later than August 23, the company said. While working as an advisor, he'll continue to receive the same base salary he earned as CEO.
The regulatory filing indicates that Steinhafel received more than $12.9 million in compensation in Target's most recently completed fiscal year, down from $20.6 million the previous year. His salary totaled $1.5 million; the bulk of last year’s compensation came in the form of stock awards.
The Wall Street Journal pointed out that Target didn’t award any short-term bonuses linked to last year's financial performance to any of its top leaders, including Steinhafel. And Target is freezing base salaries for all top officers with the exception of interim CEO John Mulligan, whose base salary climbed from $700,000 to $1 million.
View Target’s complete annual proxy statement, which includes additional details about the compensation of its leaders, here.