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Where the Money Is

Retail industry executives ranked by the values of their annual compensation packages in 2006.

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Tougher disclosure rules on executive compensation required by the Securities and Exchange Commission haven’t exactly made things clearer for investors and shareholders: Sometimes the amount of detail can be almost too much. In addition, the new rules mean comparisons with prior years aren’t valid. As a result, the WWDList looked at total value of executive compensation packages for 2006, which can include stock option awards from previous years and a not-always-explained “other” classification. One thing is clear, though: Executives at retailers that performed well in 2006 were certainly well paid. Below, a look at the biggest packages. All figures have been rounded to the nearest tenth of a million.

1. ROBERT J. ULRICH, 63, CHAIRMAN AND CHIEF EXECUTIVE OFFICER, TARGET CORP.
Total value of 2006 compensation package: $36.4 million
Base salary: $1.7 million; Bonus: $3 million; Stock and option awards: $25.2 million; Other: $6.6 million
What better executive to rank number one than Chief Executive magazine’s “CEO of the Year”? J.P. Donlon, the magazine’s editor in chief, said in a statement, “Over the past 20 years, Bob and his team reinvented the norms of the discount retail industry through breakaway creativity and design and an unparalleled dedication to customers.” Shares of Target have been heavily traded lately following disclosure that Pershing Square Capital Management might take a stake in the discount chain, possibly to get the retailer to sell its profitable credit card business. In 2006, Ulrich took home a base salary of $1.7 million, a 10.7 percent change from last year, and the highest of the top 20 retail executive salaries.

2. H. LEE SCOTT JR., 58, PRESIDENT, CEO, WAL-MART STORES INC.
Total value: $29.7 million
Base salary: $1.3 million; Bonus: $0; Stock and option awards: $23.4 million; Other: $5 million
Scott has some serious work ahead of him: At the annual shareholders’ meeting in June, Wal-Mart said it is cutting back to 190 to 200 new Supercenters in 2007, versus the planned 265 to 270, in an effort to boost profits from existing stores. It will open about 170 in each of the next three years. Scott, whose base salary rose by 8.4 percent in 2006, reiterated the store’s mantra of “EDLP,” or everyday low prices, will remain the core strategy, WWD reported. “Our customer knows Wal-Mart is the price leader and Wal-Mart will stay the price leader. Period,” Scott stated. The Bentonville, Ark.-based discounter has stumbled recently in apparel sales, as it struggles to find a more stylish image.

3. MICHAEL S. JEFFRIES, 62, CHAIRMAN AND CEO, ABERCROMBIE & FITCH CO.
Total value: $26.2 million
Base salary: $1.5 million; Bonus: NA; Stock and options awards: $14.1 million; Other: $10.6 million
Abercrombie & Fitch remains on the upswing: The New Albany, Ohio-based retailer’s stock has risen 34.6 percent over the past year. Jeffries’ base salary has risen as well, by 25 percent. The company has been expanding abroad recently to countries such as Canada and the U.K., and it will move into Tokyo in fall 2008. Jeffries, who has been with A&F for 15 years, appears to have plenty of ideas up his sleeve: WWD reported that while his company has been tight-lipped about its next concept, analysts have been betting it will be the launch of an accessories or intimates brand. Abercrombie has enjoyed recent success with its teen line, Hollister.

4. PAUL MARCIANO, 55, CEO AND VICE CHAIRMAN, GUESS INC.
Total value: $17.1 million
Base salary: $1 million; Bonus: $0; Stock and options awards: $603,532; Other: $15.5 million
Guess is on a roll. “After 25 years, we feel that we have a brand new life that has started again,” Marciano, whose base salary rose 11 percent, told WWD in June. He said product extensions and overseas initiatives are fueling the company. “Europe has been incredible for the last three years….Now, the company is more international than U.S.-based, as far as [our] earnings are concerned,” Marciano said. The company, based in Los Angeles, opened 21 stores featuring its new accessories-focused concept, G by Guess, in the previous four months.

5. MARGARET C. WHITMAN, 50, PRESIDENT AND CEO, EBAY INC.
Total value: $15.7 million
Base salary: $995,016; Bonus: $221,008; Stock and option awards: $12.6 million; Other: $1.9 million
The only woman to crack the top 10, Whitman has been the president and ceo of the online marketplace since March 1998. As she approaches her 10-year anniversary, rumors have swirled that Whitman will move on, but a company spokeswoman told Forbes in April, “As she has stated in the past, [Whitman] has no plans to leave eBay. She actually plans on staying at eBay for the long term.” In addition to its online auction site services, the company runs Rent.com, Shopping.com, Skype, PayPal and several online classified ad Web sites.

6. TERRY LUNDGREN, 55, CHAIRMAN, PRESIDENT, CEO, MACY’S INC.
Total value: $15.65 million
Base salary: $1.4 million; Bonus: $0; Stock and options awards: $10.1 million; Other: $4.1 million
Regarding Macy’s fate, WWD reported Monday, “Vendors are watching anxiously as private equity firm Kohlberg Kravis & Roberts seeks to buy Macy’s Inc. for $24 billion and take it private.” Earlier this month, WWD acknowledged that should a deal happen, it is believed KKR would keep current Macy’s management in place, including chairman and ceo Lundgren, “the architect of the current configuration of the department store giant.” Lundgren, who has been the company’s ceo since 2003 and its president since May 1997, saw his base salary rise by 8.6 percent in 2006.

7. ALAN J. LACY, 53, FORMER VICE CHAIRMAN, SEARS HOLDINGS CORP.
Total value: $15.58 million
Base salary: $499,417; Bonus: $0; Stock and options awards: $7.4 million; Other: $7.6 million
Lacy resigned from Sears on July 29, 2006 — he also resigned from the boards of Sears Holdings and Sears Canada, but he’d been at the retailer since 1994, long before it was acquired by Edward Lampert’s ESL Investments hedge fund. Lacy had been vice chairman since September 2005, after serving as ceo of Sears Holdings. Last week, WWD reported Lacy has joined Oak Hill Capital Partners, a private equity firm based in New York, as a senior adviser with the firm’s consumer and retail group.

8. JAMES V. O’DONNELL, 66, PRINCIPAL EXECUTIVE OFFICER, AMERICAN EAGLE OUTFITTERS INC.
Total value: $15.3 million
Base salary: $1 million; Bonus: NA; Stock and options awards: $10.5 million; Other: $3.8 million
O’Donnell was named ceo of American Eagle Outfitters Inc. on Nov. 4, 2003 — he’d been serving as the retailer’s chief operating officer and a member of the company’s board of directors since December 2000. Prior to his tenure at American Eagle, O’Donnell served in various senior executive positions with Gap Inc. from 1980 to 1992, including executive vice president, chief operating officer and as a member of Gap’s board. O’Donnell’s salary at AEO rose by 5.3 percent in 2006.

9. STEPHEN I. SADOVE, 55, PRINCIPAL EXECUTIVE OFFICER, SAKS INC.
Total value: $14.1 million
Base salary: $1 million; Bonus: $0; Stock and options awards: $11.8 million; Other: $1.3 million
The former senior vice president of Bristol-Myers Squibb joined Saks Inc. in January 2002, originally as vice chairman and then as chief operating officer and ceo. Sadove was appointed Saks chairman this past spring, effective with R. Brad Martin’s retirement on May 4. And Sadove has been overseeing a turnaround at Saks Fifth Avenue. While WWD reported in May that the company witnessed a fall in net profits for its first quarter ended May 5, it was due to big gains a year ago from department store sell-offs and severance costs as a result of downsizings. Operating income grew to $32.6 million in the quarter and total sales rose 15.9 percent to $792.7 million versus $684.1 million in last year’s quarter.

10. R. BRAD MARTIN, 55, CHAIRMAN, SAKS INC.
Total value: $12.9 million
Base salary: $1 million; Bonus: $0; Stock and options awards: $9 million; Other: $2.8 million
Martin built Saks Inc. into a department store group with multiple divisions, then gradually dismantled most of it to focus on the core Saks Fifth Avenue. He retired as chairman in May. He served as chairman and ceo from 1989 to 2006, when he was named chairman. Prior to 1989, Martin was the principal investor in a group that acquired Proffitt’s Inc. (which became Saks Inc. after it bought Saks Fifth Avenue) in October 1984. In June 1989, Martin joined the management of Proffitt’s as chairman, president and general merchandise manager of what was then a $75 million company.

11. JOHN B. MENZER, 56, VICE CHAIRMAN, CHIEF ADMINISTRATIVE OFFICER, WAL-MART STORES CORP.
Total value: $12.7 million
Base salary: $1 million; Bonus: $0; Stock and options: $9 million; Other: $2.8 million
Prior to his tenure with the Bentonville, Ark.-based retailer, Menzer served as president of Ben Franklin Retail Stores. He signed on with Wal-Mart in 1995 as executive vice president and chief financial officer. In 1999, he became president and ceo of Wal-Mart International and oversaw all of the company’s international operations in 15 countries outside the U.S. Now, as vice chairman and chief administrative officer, Menzer’s responsibilities include information systems, benefits and sustainability, logistics, real estate, financial services, compliance, global procurement and corporate strategic planning. Menzer’s salary increased by just over 6 percent in 2006.

12. GREGG W. STEINHAFEL, 52, PRESIDENT, TARGET CORP.
Total value: $12 million
Base salary: $1.1 million; Bonus: $389,411; Stock and options: $9 million; Other: $1.4 million
Steinhafel has been with Target Corp. for almost 30 years — he joined the company in 1979. He has held several key executive positions, including executive vice president of merchandising for Target Stores and president of Target Stores. He also currently serves as a member of the board of The Retail Industry Leaders Association His base salary increased by 9 percent in 2006.

13. KAY KRILL, 51, PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR, ANNTAYLOR STORES CORP.
Total value: $11.7 million
Base salary: $1 million; Bonus: $0; Stock and options: $9 million; Other: $1.6 million
Krill has served as ceo of Ann Taylor since October 2005 and president since Nov. 8, 2004. She currently oversees all three of the company’s concepts, which include Ann Taylor Stores, Ann Taylor Loft and Ann Taylor Factory Stores. Krill enjoyed a 3.6 percent increase in her base salary in 2006. In March, WWD reported the group’s net sales for fiscal 2006 rose 13 percent to $2.3 billion, largely due to a strong first half and good inventory management. Two growth initiatives include developing an exclusive beauty business and the launch of Loft maternity at select stores and online.

14. MAURICE MARCIANO, 58, CHAIRMAN, GUESS INC.
Total value: $11.3 million
Base salary: $900,000; Bonus: $0; Stock and options: $798,861; Other: $9.6 million
Guess Inc. was founded 25 years ago by Marciano and his brother Georges (brothers Paul and Armand joined the company soon thereafter). Maurice Marciano has overseen the company’s design direction since 1982. The company states his responsibilities include product development and coordinating the design department. He is also in charge of quality control, from raw materials to the final product. Marciano’s base salary was $900,000 — he received the same amount in 2005.

15. MYRON E. ULLMAN 3RD, 60, CHAIRMAN AND CHIEF EXECUTIVE OFFICER, J.C. PENNEY CO. INC.
Total value: $10.4 million
Base salary: $1.5 million; Bonus: $0; Stock and options: $5.3 million; Other: $3.6 million
Before joining Penney’s in 2002, Ullman spent three years as directeur general, group managing director of LVMH Möet Hennessy Louis Vuitton. The Plano, Tex.-based retailer has grand ambitions for its future: It is heavily anticipating next year’s opening of its first Manhattan store — a 150,000-square-foot unit at Manhattan Mall, right near Macy’s. In addition, there will be a continuing rollout of Sephora in-store beauty boutiques, and the company has plans to open at least 250 units nationwide over the next five years. Ullman received the American Jewish Committee’s National Human Relations Award in June.

16. CATHERINE G. WEST, 47, FORMER EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING OFFICER, J.C. PENNEY CO. INC.
Total value: $10.2 million
Base salary: $315,476; Bonus: $0; Stock and options: $7.4 million; Other: $2.2 million
West accepted the job in August 2006 from Capital One Financial Corp., but was fired the following December. The company didn’t explain why, except to say West had a severance agreement with J.C. Penney, and the retailer intended to honor its terms. During her time with the mass retailer, her responsibilities included logistics and supply chain operations, along with property development initiatives, which involved the planning of store openings. At Capital One, West served most recently as president of one of its largest divisions, the U.S. Card business. She ranked number 46 on Fortune’s 2006 list of “50 Most Powerful Women.”

17. LESLIE H. WEXNER, 69, CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER, LIMITED BRANDS INC.
Total value: $9.4 million
Base salary: $1.8 million; Bonus: $0; Stock and options: $2.4 million; Other: $5.1 million

Limited Brands’ founder has been busy as of late: Wexner announced the sale of a 75 percent stake in the firm’s namesake Limited Stores, and the group closed an agreement to sell a majority interest in its Express nameplate, both to focus on globally expanding the Victoria’s Secret and Bath & Body Works divisions. WWD reported that Limited’s apparel brands now represent less than 20 percent of Limited Brands’ revenues of $10.7 billion a year. Limited had sales last year of $493 million, and Express had revenues of $1.7 billion, according to the company. Victoria’s Secret and BBW now account for the bulk of sales.” Wexner founded the Columbus, Ohio-based company in 1963. His base salary rose by 7.2 percent in 2006.

18. PAUL S. PRESSLER, 50, FORMER PRESIDENT AND CHIEF EXECUTIVE OFFICER, GAP INC.
Total value: $8.9 million
Base salary: $1.5 million; Bonus: $0; Stock and options: $3.2 million; Other: $4.1 million

On Jan. 22, Pressler stepped down from his post as president and ceo following several years of poor performance at the specialty store giant. He will remain a nonexecutive employee for two years, as outlined in his 2002 employment agreement. “The departure of Mr. Pressler in January 2007, along with the company’s business performance and external market speculation regarding corporate structure changes, created substantial uncertainty and distraction among key executives,” said the company’s proxy filing, released in April.

19. DORRIT J. BERN, 57, CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, CHARMING SHOPPES INC.
Total value: $8.3 million
Base salary: $1.3 million; Bonus: $0; Stock and options: $4 million; Other: $3 million
In August 1995, Bern joined Charming Shoppes as ceo and president. She also served as vice chairman from Aug. 23, 1995, until Jan. 30, 1997, when she was elected chairman. Prior to this, Bern was Sears’ group vice president of women’s apparel and home fashions. Charming Shoppes, based in Bensalem, Pa., owns retail brands such as Lane Bryant, Fashion Bug and Catherines, a classic yet stylish plus-sized apparel retailer. The company also owns Petite Sophisticate and Crosstown Traders Inc., a direct marketer of women’s apparel. Bern’s salary rose by 4 percent in 2006.

20. MICHAEL BALMUTH, 56, VICE CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, ROSS STORES
Total value: $8.2 million
Base salary: $993,791; Bonus: $0; Stock and options: $5.9 million; Other: $1.3 million
The chain is best known for its low prices on its fashion offerings. Based in Pleasanton, Calif., the company operates approximately 771 Ross Dress for Less stores in 27 states and Guam and 26 dd’s Discount locations in California. Balmuth has served as vice chairman and ceo since September 1996. His salary rose by almost 2 percent in 2006.

21. CAROL MEYROWITZ, 52, PRESIDENT, TJX COS. INC.
Total value: $7.59 million
Base salary: $1 million; Bonus: $0; Stock and options: $4.2 million; Other: $2.3 million

22. HEYWOOD WILANSKY, 57, PRESIDENT AND CEO, RETAIL VENTURES INC.
Total value: $7.58 million
Base salary: $1 million; Bonus: $0; Stock and options: $5.9 million; Other: $600,013

23. ROGER S. MARKFIELD, 65, VICE CHAIRMAN, AMERICAN EAGLE OUTFITTERS INC.
Total value: $6.9 million
Base salary: $580,962; Bonus: $0; Stock and options: $4.4 million; Other: $1.8 million

24. LEONARD A. SCHLESINGER, 54, VICE CHAIRMAN, CHIEF OPERATING OFFICER, LIMITED BRANDS INC.
Total value: $6.6 million
Base salary: $1.2 million; Bonus: $0; Stock and options: $3.1 million; Other: $2.3 million

25. JULIAN R. GEIGER, CHAIRMAN AND CEO, AEROPOSTALE INC.
Total value: $6.4 million
Base salary: $945,389; Bonus: $0; Stock and options: $1.7 million; Other: $3.8 million

26. MELISSA PAYNER, 48, PRESIDENT AND CEO, BLUEFLY INC.
Total value: $6.2 million
Base salary: $500,000; Bonus: $944,686; Stock and options: $4.7 million; Other: $48,655

27. RAJIV DUTTA, 45, PRESIDENT, PAYPAL
Total value: $6.1 million
Base salary: $524,231; Bonus: $86,295; Stock and options: $4.9 million; Other: $588,323

28. R. TYSOE, 54, FORMER VICE CHAIR, MACY’S INC.
Total value: $6 million
Base salary: $830,000; Bonus: $0; Stock and options: $3.8 million; Other: $1.4 million

29. ARNOLD B. ZETCHER, 66, CHAIRMAN, PRESIDENT AND CEO, TALBOTS INC.
Total value: $5 million
Base: $1.2 million; Bonus: $0; Stock and options: $3 million; Other: $754,733

30. SCOTT A. EDMONDS, 49, PRESIDENT AND CEO, CHICO’S FAS INC.
Total value: $4.9 million
Base salary: $1 million; Bonus: $0; Stock and options: $3.4 million; Other: $4.6 million

SOURCE: SECURITIES AND EXCHANGE COMMISSION FILINGS AS OF JULY 2007 FOR THE RETAILERS TRACKED BY FAIRCHILD PUBLICATIONS’ FINANCIAL NEWS SERVICE; *PACKAGE VALUES INCLUDE BASE SALARY, BONUS AND STOCK, OPTIONS AND OTHER AWARDS; NA: NOT APPLICABLE.

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