Retail Execs Prosper
James Mammarella -- Home Textiles Today, October 29, 2007
New York —The leading retailers of home textiles had a fairly respectable year in 2006 — while the top retail executives had a marvelous time indeed.
In 2005, 35 of the retailer executives in the HTT Executive Compensation Report took home cash and stock options exercised equivalent to $1 million or more. In 2006, there were 49 execs who took home $1 million or more.
In the thin-air range, 11 retailer execs took home $5 million or more in 2005, while in 2006 there were 19 who reached that pinnacle.
Of course, it wasn't all upside. Target chairman and ceo Bob Ulrich took home just $33.87 million — not measly, but rather modest compared to his $42.97 million payday for the year prior.
And while the 2005 second-place payday went to a Sears Holdings exec — vice chairman Alan Lacey, with $23.22 million — he has since departed, dropping Sears to the middling ranks of the 2006 payscale table, with president and ceo Aylwin Lewis taking home $1.90 million in total cash compensation.
There were other changes at the top.
The $10 million club among retailers featured six top executives in both 2005 and 2006, but some of the faces have changed — and a woman exec entered this heady mix, even if it was only for a brief sojourn.
There were three $10 million repeaters: Ulrich, along with Kohl's ceo Lawrence Montgomery and the now-departed Home Depot chairman, president and ceo Robert Nardelli (who left the company on Jan. 2, 2007).
The three new faces: Arlene Meier ($15.77 million total cash compensation), who was coo at Kohl's until her retirement on Sept. 1, 2006; James Sinegal ($13.14 million, including no bonus and his usual $350,000 in salary), president and ceo of Costco; and Jeffrey Brotman ($12.37 million), chairman of Costco.
Some perspective is gained by taking a three-year look.
Aggregate sales for the industry (as gauged by the HTT Top 50 Retailing Giants, which account for 90% of the market) climbed 5.1% to $24.7 billion in 2006, up from $24.2 billion in 2005, which was 2.5% above the $23.6 billion generated at retail in 2004. Thus in the three-year period 2004-2006 sales grew about 4.7%.
Now contrast that 4.7% overall retail company sales increase with the three-year gains of dozens of retail executives whose compensation boomed and zoomed by anywhere from double-digits to such levels as the merely stratospheric 112.9% by Michael Balmuth (Ross Stores vice chairman, president and ceo), to the convincingly orbital 248.1% by Aylwin Lewis (Sears Holdings president and ceo), to the utterly outer-space 535.7% by Mike Ullman (JCPenney chairman and ceo).
Of course, the net income gain over three years was top-of-class impressive at each of these retailers — Ross: 42.2%, Sears: 68.6%, JCPenney: 125.2%.
And the 2006 take-home of those three execs in dollars was not exactly jaw-dropping: Balmuth scored a hearty $7.02 million, Lewis a relatively modest $1.90 million, and Ullman had a seemingly mid-level payday of $4.17 million.
Interestingly, income at Target actually dropped 12.9% over the three-year period (from $3.19 billion for 2004 to $2.79 billion for 2006) — while chairman and ceo Ulrich's income rose 18.5% over that period, and that of his colleague, Target president Gregg Steinhafel, climbed 20.6%.
A similar discrepancy can be found at Pier 1 Imports. There, income has declined by an extremely challenging 476.5% over the three years, while the total cash compensation of former chairman and ceo Marvin Girouard (who retired Feb. 19, 2007) grew by 8.1% during that time frame.
Wal-Mart, the world's biggest retailer, managed to add 9.9% to its income between 2004 and 2006.
Some of Wal-Mart's top managers did somewhat better. For example: Michael Duke, vice chairman of international, more than doubled his take-home pay over the three years, with his 2006 total cash compensation of $4.71 million equal to 119.0% more than his 2004 payday.
RETAILERS 3-YEAR SALARY VS. EARNINGS COMPARISON
|Name||Company||Tot. Comp Change||Sales||Income|
|Myron E. Ullman, III||JCPenney||535.7%||10.0%||125.2%|
|Aylwin B. Lewis||Sears Holdings||248.1||-4.6||68.6|
|R. Lawrence Montgomery||Kohl's||194.6||32.8||57.6|
|Kevin B. Mansell||Kohl's||193.6||32.8||57.6|
|Byron L. Bergren||Bon-Ton||189.8||156.6||132.5|
|Michael T. Duke||Wal-Mart||119.0||21.0||9.9|
|Michael Balmuth||Ross Stores||112.9||31.4||42.2|
|Ken C. Hicks||JCPenney||54.2||10.0||125.2|
|Ross E. Manning||Tuesday Morning||53.2||1.5||-41.8|
|Gary G. Friedman||Restoration Hardware||50.7||35.6||90.8|
|David M. Tehle||Dollar General||43.9||19.7||-59.9|
|R. James Kelly||Family Dollar||38.3||21.1||-24.3|
|Michael J. Hayes||Fred's||36.0||22.6||-4.3|
|Howard R. Levine||Family Dollar||35.3||21.1||-24.3|
|Arthur Stark||Bed Bath & Beyond||34.0||28.6||17.7|
|William Dillard, II||Dillard's||28.0||1.4||108.8|
|Kathleen R. Guion||Dollar General||27.1||19.7||-59.9|
|Francis S. Blake||Home Depot||25.3||24.3||15.2|
|John B. Menzer||Wal-Mart||22.9||21.0||9.9|
|Arnold S. Barron||TJX||22.5||16.7||21.0|
|John D. Reier||Fred's||21.9||22.6||-4.3|
|John W. Tate||Restoration Hardware||21.9||35.6||90.8|
|Gregg W. Steinhafel||Target||20.6||26.7||-12.9|
|Steven H. Temares||Bed Bath & Beyond||19.4||28.6||17.7|
|Robert J. Ulrich||Target||18.5||26.7||-12.9|
|E. Mitchell Weatherly||Pier 1 Imports||12.2||-11.1||-476.5|
|Marvin J. Girouard||Pier 1 Imports||8.1||-11.1||-476.5|
|Robert L. Nardelli||Home Depot||7.5||24.3||15.2|
|H. Lee Scott, Jr.||Wal-Mart||4.1||21.0||9.9|
|Jay R. Jacobs||Pier 1 Imports||3.5||-11.1||-476.5|
|Warren Eisenberg||Bed Bath & Beyond||1.8||28.6||17.7|
|Leonard Feinstein||Bed Bath & Beyond||1.8||28.6||17.7|
|Jeffrey H. Brot man||Costco||1.2||25.1||25.0|
|Laura J. Alber||Williams-Sonoma||-2.7||18.8||9.2|
|Thomas M. Belk, Jr.||Belk||-4.8||50.6||46.6|
|Terry J. Lundgren||Macy's||-10.4||71.0||44.4|
|Susan D. Kronick||Macy's||-10.6||71.0||44.4|
|Wayne P. Garten||Hanover Direct||-11.9||15.3||-227.3|
|Marta H. Benson||Restoration Hardware||-13.1||35.6||90.8|
|H.W. McKay Belk||Belk||-13.8||50.6||46.6|
|John R. Belk||Belk||-13.8||50.6||46.6|
|Michael J. Marchetti||Tuesday Morning||-17.7||1.5||-41.8|
|Robert A. Niblock||Lowe's||-17.8||28.7||42.7|
|Patrick J. Connolly||Williams-Sonoma||-21.5||18.8||9.2|
|David A. Perdue||Dollar General||-32.0||19.7||-59.9|
|Larry D. Stone||Lowe's||-36.1||28.7||42.7|
|James D. Sinegal||Costco||-36.4||25.1||25.0|
|Kathleen Mason||Tuesday Morning||-39.6||1.5||-41.8|
|W. Howard Lester||Williams-Sonoma||-42.9||18.8||9.2|
|Michael D. Fisher||Stein Mart||-45.9||2.9||-2.1|
|Alan Rosskamm||Jo-Ann Stores||-64.2||2.1||-104.1|
EXECUTIVE COMPENSATION RETAILERS
dollar amounts in thousands
|Name, Title||Company||Total cash, stock options exercised||Salary 2006||Bonus 2006||Total cash compensation||Value of stock options exercised||Total cash comp. 3-yr. % change 2004-2006|
|1. Retired as of Sept. 1, 2006.
2. On Jan. 2, 2007, the company entered into a separation agreement with Nardelli.
3. Served as acting ceo through the end of fiscal 2007; continues as chairman.
4. Promoted to president and coo effective Dec. 16, 2006.
5. Resigned Oct. 5, 2006; continued employment status through June 30, 2007.
6. Appointed vice chairman in September 2006.
7. Became ceo Jan. 28, 2007; appointed a director in September 2006.
8. Promoted to president in Jan. 2006.
9. Joined company on Aug. 1, 2006.
10. Became chairman and ceo on Feb. 14, 2006.
11. Retired Feb. 19, 2007.
12. Became chairman, president and ceo on July 24, 2006.
13. Appointed coo on May 9, 2006.
14. Resigned July 24, 2006.
15. Federated Department Stores became Macy's Inc. on June 1, 2007.
16. On Feb. 14, 2006, Linens Merger Sub Co. merged with and into Linens 'n Things, a wholly-owned subsidiary of Linens Holding Co.
|Robert J. Ulrich, chairman and ceo||Target||$33,866||$1,660||$6,129||$7,789||$26,078||18.5%|
|R. Lawrence Montgomery, ceo||Kohl's||25,476||1,087||1,925||3,012||22,464||194.6|
|Arlene Meier 1,former coo||Kohl's||15,761||452||1,374||1,826||13,935||149.4|
|James D. Sinegal, president and ceo||Costco||13,137||350||0||350||12,787||-36.4|
|Jeffrey H. Brotman, chairman||Costco||12,368||357||200||557||11,811||1.2|
|Robert L. Nardelli 2, former chairman, president and ceo||Home Depot||10,625||2,332||6,000||8,332||2,293||7.5|
|Terry J. Lundgren, chairman, president and ceo||Macy's 15||8,969||1,383||2,705||4,088||4,880||-10.4|
|Kevin B. Mansell, president||Kohl's||8,246||946||1,675||2,621||5,625||193.6|
|Bernard Cammarata 3, chairman and acting ceo||TJX||8,070||912||0||912||7,159||127.9|
|Michael Balmuth, vice chairman, president and ceo||Ross Stores||7,018||994||1,100||2,094||4,925||112.9|
|Larry D. Stone 4, president and coo||Lowe's||6,701||770||491||1,261||5,439||-36.1|
|Thomas L. Cole, vice chairman||Macy's 15||6,555||883||894||1,778||4,777||—|
|Ken C. Hicks, president and chief merchandising officer||JCPenney||6,278||791||1,073||1,864||4,413||54.2|
|Ronald W. Tysoe 5, former vice chairman||Macy's 15||6,092||830||802||1,632||4,460||—|
|H. Lee Scott, Jr., president and ceo||Wal-Mart||5,586||1,300||4,286||5,586||0||4.1|
|Gregg W. Steinhafel, president||Target||5,567||1,130||1,044||2,174||3,393||20.6|
|Susan D. Kronick, vice chairman||Macy's 15||5,387||1,043||1,039||2,082||3,305||-10.6|
|Donald G. Campbell 6, vice chairman||TJX||5,205||741||897||1,638||3,567||—|
|John B. Menzer, vice chairman, chief administrative officer||Wal-Mart||5,162||1,000||2,436||3,436||1,726||22.9|
|Michael T. Duke, vice chairman - international||Wal-Mart||4,707||900||2,463||3,363||1,344||119.0|
|W. Howard Lester, chairman and ceo||Williams-Sonoma||4,674||975||0||975||3,699||-42.9|
|Carol Meyrowitz 7, president||TJX||4,623||1,077||2,018||3,094||1,528||64.3|
|Myron E. Ullman, III, chairman and ceo||JCPenney||4,174||1,500||2,674||4,174||0||535.7|
|Alex Dillard, president||Dillard's||3,978||680||2,482||3,162||816||29.1|
|William Dillard, II, ceo||Dillard's||3,958||770||2,482||3,252||706||28.0|
|Robert A. Niblock, chairman and ceo||Lowe's||3,579||950||1,038||1,988||1,592||-17.8|
|Arnold S. Barron, senior evp, group president||TJX||3,396||673||729||1,401||1,994||22.5|
|Laura J. Alber, president||Williams-Sonoma||3,054||701||0||701||2,353||-2.7|
|Steven S. Fishman, chairman, ceo and president||Big Lots||2,592||960||1,632||2,592||0||—|
|Arthur Stark 8, president and chief merchandising officer||Bed Bath & Beyond||2,590||821||0||821||1,769||34.0|
|Byron L. Bergren, president and ceo||The Bon Ton||2,471||971||1,500||2,471||0||189.8|
|Anthony J. Buccina, vice chairman, president-merchandising||The Bon Ton||2,055||689||1,367 16||2,055||0||—|
|Frank L. Fernandez, former evp - secretary and general counsel||Home Depot||1,951||724||908||1,632||319||—|
|Eduardo Castro-Wright, evp, president and ceo - Wal-Mart stores division||Wal-Mart||1,948||721||1,227 17||1,948||0||—|
|Aylwin B. Lewis, ceo and president||Sears Holdings||1,900||1,011||889||1,900||0||248.1|
|Thomas Kingsbury 9, senior evp||Kohl's||1,838||375||1,463 19||1,838||0||—|
|Francis S. Blake, chairman and ceo||Home Depot||1,700||758||941||1,700||0||25.3|
|Howard R. Levine, hairman and ceo||Family Dollar||1,586||729||858||1,586||0||35.3c|
|Thomas M. Belk, Jr., chairman and ceo||Belk||1,577||817||760||1,577||0||-4.8|
|Patrick J. Connolly, director and evp - chief marketing office||Williams-Sonoma||1,556||567||0||567||989||-21.5|
|John R. Belk, president and coo||Belk||1,251||717||534||1,251||0||-13.8|
|H.W. McKay Belk, president and chief merchandising officer||Belk||1,251||717||534||1,251||0||-13.8|
|Steven H. Temares, ceo||Bed Bath & Beyond||1,231||1,231||0||1,231||0||19.4|
|Robert J. DiNicola 10, chairman and ceo||Linens 'n Things 16||1,190||1,190||0||1,190||0||—|
|Leonard Feinstein, co-chairman||Bed Bath & Beyond||1,100||1,100||0||1,100||0||1.8|
|Warren Eisenberg, co-chairman||Bed Bath & Beyond||1,100||1,100||0||1,100||0||1.8|
|Marvin J. Girouard 11, chairman and ceo||Pier 1 Imports||1,081||1,081||0||1,081||0||8.1|
|David A. Perdue, chairman and ceo||Dollar General||1,038||1,038||0||1,038||0||-32.0|
|Tim Grumbacher, executive chairman||The Bon Ton||1,037||675||362||1,037||0||-33.4|
|David B. Zant, vice chairman||The Bon Ton||927||519||408||927||0||—|
|R. James Kelly, president, coo and cfo||Family Dollar||875||466||409||875||0||38.3|
|Michael D. Fisher, president and ceo||Stein Mart||816||816||0||816||0||-45.9|
|Gary G. Friedman, president, ceo and chairman||Restoration Hardware||813||573||240 25||813||0||50.7|
|Darrell Webb 12, chairman, president and ceo||Jo-Ann Stores||808||404||404||808||0||—|
|Beryl J. Buley, division president - merchandising, marketing and supply chain||Dollar General||762||575||187||762||0||—|
|Ken Dunaj 13, coo||Restoration Hardware||687||317||370 29||687||0||—|
|Kathleen R. Guion, division president - store operatons and store development||Dollar General||663||500||163||663||0||27.1|
|Kathleen Mason, president and ceo||Tuesday Morning||633||633||0||633||0||-39.6|
|Wayne P. Garten, president and ceo||Hanover Direct||600||600||0||600||0||-11.9|
|Alan Rosskamm 14, former chairman, president and ceo||Jo-Ann Stores||515||375||0||375||140||-64.2|
|John D. Reier, president||Fred's||305||255||50||305||0||21.9|
|Michael J. Hayes, chairman and ceo||Fred's||299||224||75||299||0||36.0|
Top and bottom 5 retailers by 2006 salary*
|*straight salary, excluding bonus, other cash compensation and stock options
|Robert L. Nardelli, Home Depot||$2,331,538|
|Robert J. Ulrich, Target||1,659,616|
|Myron E. Ullman, III, JCPenney||1,500,000|
|Terry J. Lundgren, Macy's||1,383,333|
|H. Lee Scott, Jr., Wal-Mart||1,300,000|
|Jeffrey H. Brotman, Costco||$356,731|
|James D. Sinegal, Costco||350,000|
|Ken Dunaj&, Restoration Hardware||316,809|
|John D. Reier, Fred's||254,808|
|Michael J. Hayes, Fred's||224,231|
RETAILER CASH BONUSES
Top and bottom 5 retailers by 2006 bonus
|Robert J. Ulrich, Target||$6,128,960|
|Robert L. Nardelli, Home Depot||6,000,000|
|H. Lee Scott, Jr., Wal-Mart||4,285,840|
|Terry J. Lundgren, Macy's||2,704,800|
|Myron E. Ullman, III, JCPenney||2,673,750|
|Jeffrey H. Brotman, Costco||$200,000|
|Beryl J. Buley, Dollar General||186,875|
|Kathleen R. Guion, Dollar General||162,500|
|Michael J. Hayes, Fred's||75,000|
|John D. Reier, Fred's||50,000|
RETAILER STOCK OPTIONS EXERCISED
Top and bottom 5 retailers by 2006 stock options exercised
|However volatile and margin-shaving the retail environment seems today, it is clear that 2006 was a banner year in stock options for the top retail execs. The top five cash-ins of stock options added up to $87 million in 2006, compared to a top-five total of $84 million in 2005. Leave out the options exercised by a single executive — Target's chairman and ceo Bob Ulrich — and the year-to-year total swung up 24% to $61 million from $49 million. (In fact, bringing home $26 million in cashed-in options was a bit of an off-year for Ulrich — after his $35 million exercise in 2005.) The bottom five saw an even more dramatic upswing, totaling $2.97 million in 2006, up from $614,000 in 2005: an increase of 384%.|
|Robert J. Ulrich, Target||$26,077,609|
|R. Lawrence Montgomery, Kohl's||22,463,875|
|Arlene Meier, Kohl's||13,935,338|
|James D. Sinegal, Costco||12,787,230|
|Jeffrey H. Brotman&, Costco||11,811,079|
|Patrick J. Connolly, Williams-Sonoma||$989,280|
|Alex Dillard, Dillard's||816,000|
|William Dillard, II, Dillard's||705,750|
|Frank L. Fernandez, Home Depot||318,500|
|Alan Rosskamm, Jo-Ann Stores||140,350|
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