Gregg Steinhafel will receive about $15.9 million in severance and other benefits following his dismissal as chief executive officer of Target Corp.
The company said in a series of filings with the Securities and Exchange Commission Monday that Steinhafel will remain at Target until as late as Aug. 23 to assist in the transition in management. John Mulligan, chief financial officer, has been named interim president and ceo and Roxanne Austin, a director, has been appointed interim chair.
According to Target’s definitive proxy, Steinhafel, upon signing an agreement that includes a nonsolicitation clause and a release of claims, will be eligible for $7.2 million in severance payments, plus $10 million in a deferred compensation plan and, based on Target’s closing stock price as of May 5, restricted stock units with a grant date fair value of $4.1 million.
Subtracted from that total of $21.3 million are $5.4 million in supplemental pension plan payments forfeited in exchange for his severance.
The proxy showed Steinhafel’s compensation for 2013 dropped 37.3 percent to $13 million from $20.6 million for 2012. The cash portion dropped 65.8 percent to $2 million from $4.4 million as his salary was unchanged at $1.5 million while his performance-based cash bonus dropped to zero from $2.9 million.
The sum of his stock and option awards fell 2.9 percent to $10.2 million from $10.5 million but were solely in the form of stock options whereas the stock and option components were essentially equal in 2012.
Other payments were down 90 percent, to $509,000 from $5.1 million, with the principal difference the loss of $4.6 million in supplemental pension plan credits due to his dismissal.
Steinhafel stepped down as chairman, president and ceo of Target on May 5 following the discounter’s holiday data breach and its troublesome entrance into Canada, which contributed to a 34.3 percent drop in last year’s net income to $1.97 billion. Fourth-quarter revenues slid 5.3 percent, to $21.52 billion, as same-store sales were off 2.5 percent.
With his elevation to interim president and ceo, Mulligan’s salary has been raised to $1 million a year from $700,000 and his short-term incentive opportunity to 90 percent of his base salary from the previous level of 80 percent. He was also granted $1 million in restricted stock units that will vest in one-third increments on the anniversary of the grant date.
Target will hold its annual meeting at Union Station in Dallas at 1:30 p.m. Central time on June 11, the proxy said.