Business Context and Reporting Period
This Form 8-K Current Report was filed by Target Corporation on January 11, 2006. The filing details corporate governance actions taken by the Board of Directors regarding executive compensation, specifically the approval of performance criteria for long-term incentive awards, a base salary increase for the CEO, and amendments to the executive deferred compensation plan.
Key Financial Metrics and Compensation Details
The filing does not report operational financial metrics such as revenue, profit, cash flow, or debt levels. Instead, it discloses specific compensation adjustments:
- CEO Salary Increase: Robert J. Ulrich's base salary increased by $100,000 (6.67%) to $1.6 million annually, effective February 1, 2006.
- Deferred Compensation Credits: Specific lump-sum credits were awarded to named executive officers in exchange for the elimination of the executive survivor benefit:
- Robert J. Ulrich: $676,314
- Gregg W. Steinhafel: $713,913
- Douglas A. Scovanner: $298,544
Material Changes and Performance Criteria
The Board approved new performance criteria for performance share units granted on January 11, 2006, under the Long-Term Incentive Plan. The performance period ends with the 2008 fiscal year, using fiscal 2005 as the baseline. The metrics are split as follows:
- 50% based on compound annual revenue growth.
- 50% based on compound annual earnings per share (EPS) growth.
Additionally, the Compensation Committee eliminated the executive survivor benefit (a 100% joint and survivor annuity) for certain executive officers. This benefit had previously been converted to a deferred compensation credit in 2002. The elimination was exchanged for a fully vested credit equal to the excess of the estimated actuarial present value over previous credits.
Outlook, Risks, and Contingencies
The filing does not provide forward-looking guidance, risk factors, or contingency disclosures beyond the specific compensation changes. The text of the amendment to the SMG Executive Deferred Compensation Plan is scheduled to be filed with the Form 10-K for the year ended January 28, 2006.
Key Facts for Investor Verification
- Verify the impact of the new performance share unit criteria (revenue and EPS growth) on future executive equity grants.
- Confirm the total cost of the deferred compensation credits awarded to executives in the upcoming 10-K filing.
- Note that the CEO's base salary has remained unchanged since 2003 prior to this 6.67% increase.
- Review the full text of the SMG Executive Deferred Compensation Plan amendment in the subsequent Form 10-K.