Failed CEO compensation is off-target.
Last week the Target Corporation announced it would be closing all 133 stores in Canada, laying off 17,600 employees in the process.
Many thought the expansion was too much, too fast:
But problems cropped up almost immediately when it opened more than 100 stores in the first year of its Canadian expansion. Shoppers complained of shortages of basic goods and complained that prices were too high. They also didn't find the brands that they'd seen and liked in U.S. stores. As a result, Target racked up losses as high as a billion dollars a year.
"We missed the mark from the beginning by taking on too much too fast," Cornell said on the Target blog.
As a result of the failed Canadian experiment and a massive data breach, then CEO Gregg Steinhafel was fired.
Now we learn the compensation package for the 17,600 laid off employees is roughly equal to the golden parachute package given to failed CEO Gregg Steinhafel. This is everything wrong with corporate America today:
Target’s "employee trust" package for its Canadian workers, announced last week, amounts to $70 million ($56 million US). It’s designed to provide each worker with 16 weeks of pay.
Depending on who’s doing the calculation, the golden handshake handed to ex-CEO Gregg Steinhafel last May is in roughly in the same ballpark.
Fortune Magazine put the value of his total "walk-away" package, including stock options and other benefits, at $61 million US, including severance of $15.9 million.
When we talk about income inequality, this should be a textbook example.