Target is doubling bonuses for salaried employees, the company confirmed to Retail Dive on Thursday. The retailer said it will pay 100% of employees’ eligible 2023 bonuses. For the prior year, the company paid 50% of eligible bonuses.
“Like many companies, Target offers a bonus plan for select employees, including leaders in our stores and supply chain operations, that is designed to reward their performance in driving our results,” spokesperson Brian Harper-Tibaldo said in an emailed statement to Retail Dive. “The bonus structure is informed by goals set at the beginning of the fiscal year, and includes sales performance and profit outcomes.”
Workforce costs are Target’s largest operating expense. The Minneapolis-based company has about 400,000 employees, 1,956 U.S. stores and nearly 60 supply chain facilities. Target declined to say how many hourly versus salaried employees it has but noted that hourly team members make up most of its workforce. A spokesperson confirmed that select store-level employees are eligible for bonuses under a separate program.
Target earlier this month reported its full-year revenue fell 1.6% to $107.4 billion, down from $109.1 billion a year earlier. Comparable sales for the 2023 fiscal year also declined nearly 4%, although operating income rose 48% to $5.7 billion. Fourth-quarter revenue rose 1.7% year over year to nearly $32 billion.
In a March 5 earnings announcement, CEO Brian Cornell credited employees with changing the company’s business momentum, which improved fourth-quarter sales, traffic and profitability ahead of expectations.
Target is “rewarding our team accordingly” after its associates helped drive an additional $2 billion in profit growth, which exceeded a goal the company set for the past fiscal year, Harper-Tibaldo said Thursday.
As the company moves to open 300 more stores over the next decade, the human element of the business “as exemplified by our team is a continued differentiator for Target in a world where commerce is becoming increasingly mechanized and impersonal,” Chief Operating Officer Michael Fiddelke said during the most recent earnings call. Fiddelke took on the COO role in early February and is also currently serving as the chief financial officer.
Rival retailer Walmart also recently announced that it’s boosting bonus incentives to reward employees and help retain talent. The Arkansas-based retailer raised the average store manager’s salary to $128,000 annually and announced plans to add $20,000 in stock grants to the compensation packages of managers who lead Walmart Supercenter stores. With those changes, a manager at one of Walmart’s largest U.S. stores could earn over $400,000 annually.