In 2014 Brian Cornell was appointed CEO of Target Corporation (NYSE:TGT). This analysis aims first to contrast CEO compensation with other large companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Brian Cornell’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Target Corporation has a market cap of US$40b, and is paying total annual CEO compensation of US$8.4m. (This is based on the year to February 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.3m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$11m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
That means Brian Cornell receives fairly typical remuneration for the CEO of a large company. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Target, below.
Is Target Corporation Growing?
Over the last three years Target Corporation has grown its earnings per share (EPS) by an average of 3.6% per year (using a line of best fit). In the last year, its revenue is up 3.7%.
I would argue that the improvement in revenue isn’t particularly impressive, but I’m happy with the modest EPS growth. Considering these factors I’d say performance has been pretty decent, though not amazing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Target Corporation Been A Good Investment?
With a total shareholder return of 6.3% over three years, Target Corporation has done okay by shareholders. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Remuneration for Brian Cornell is close enough to the median pay for a CEO of a large company .
We see room for improved growth, as well as fairly unremarkable returns over the last three years. While there is room for improvement, we haven’t seen evidence to suggest the pay is too generous. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Target (free visualization of insider trades).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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