Target will double its bonus payments to salaried employees this year, as the big-box retailer’s profits recover from a bumpy nearly two-year stretch.
Salaried employees at the Minneapolis-based retailer receive an annual bonus, based on Target’s performance and the eligible amount set as part of their compensation. The retailer will pay 100% of employees’ eligible annual bonus amounts for the most recent fiscal year, a company spokesperson said Thursday. That is an increase from 50% in the prior year.
In a statement, Target said the annual bonus payout is based on how the retailer performs against sales and profit goals set at the beginning of the fiscal year.
“Based on Target’s performance in 2023, including the $2 billion in additional profit growth our team delivered that exceeded the goals we set at the beginning of the year, we’re rewarding our team accordingly,” the company statement said.
Target will pay out the annual cash bonuses in late March. The amount paid out won’t be as high as it could be, however. It tops out at 175% of each employee’s eligible bonus amount.
The vast majority of Target’s approximately 415,000 employees, such as those at its stores and warehouses, are paid hourly and do not qualify for the bonuses. Yet it does offer bonuses to store and supply-chain leaders, along with many corporate employees. Top executives at Target have a different bonus structure.
The increased bonus payout was first reported by Bloomberg.
Target has dealt with a challenging nearly two-year stretch marked by inventory troubles, weaker discretionary spending, inflated supply chain costs and higher levels of theft. In the holiday quarter, Target’s comparable sales declined for the third quarter in a row, and its e-commerce sales also dropped compared with the year-ago period.
The discounter said it expects the sales challenges will continue. For the full year 2024, Target said it anticipates comparable sales will be flat to up 2%.
But the company has improved profits and margins as Target has kept a sharper focus on inventory and as some of its costs, such as freight, have fallen. For the fiscal year, Target said, it expects adjusted earnings per share will range from $8.60 to $9.60. The higher end of that range would top the adjusted earnings per share of $8.94 that it reported for the previous fiscal year.