8-K/ALeadership Changes

TARGET CORP 8-K/A Report, Executive Changes (May 19, 2014)

Filed May 19, 2014For Securities:TGT

Summary

This filing is an amendment to a previous 8-K report, detailing the compensation and transition arrangements for former CEO Gregg W. Steinhafel following his departure. It clarifies that Mr. Steinhafel will remain with Target in an advisory role until August 23, 2014, continuing to receive his current salary and benefits, and remaining eligible for a pro-rated short-term incentive. Following this advisory period, he will be eligible for severance benefits under the company's Income Continuance Policy, subject to certain conditions including a non-solicitation agreement and a release of claims. The amendment also announces changes to the compensation of John J. Mulligan, who has assumed additional responsibilities. His base salary has been increased, and he will receive a significant one-time grant of restricted stock units. Additionally, his short-term incentive opportunity has been increased to reflect his expanded role as Interim President and Chief Executive Officer.

Key Highlights

  • 1Amendment clarifies compensation details for former CEO Gregg W. Steinhafel post-departure.
  • 2Mr. Steinhafel to serve in an advisory capacity until August 23, 2014, receiving his current salary and benefits.
  • 3Steinhafel remains eligible for a pro-rated short-term incentive based on company performance.
  • 4Severance benefits for Steinhafel will commence after the advisory period, contingent on signing an agreement with non-solicitation and release clauses.
  • 5John J. Mulligan's base salary increased from $700,000 to $1 million.
  • 6Mulligan to receive a $1 million restricted stock unit grant vesting over three years, with accelerated vesting upon involuntary termination without cause.
  • 7Mulligan's short-term incentive opportunity increased to 90% of base salary reflecting his role as Interim President and CEO.

Frequently Asked Questions

Gregg Steinhafel stepped down as CEO on May 5, 2014. He will remain with Target in an advisory capacity until August 23, 2014, receiving his existing salary and benefits. After this period, he is eligible for severance under the Income Continuance Policy, provided he signs a non-solicitation agreement and a release of claims, and subject to clawback provisions and potential termination of equity awards if he joins a competitor.

John J. Mulligan's base salary has been increased to $1 million. He will also receive a one-time grant of $1 million in restricted stock units, vesting over three years, with accelerated vesting if terminated involuntarily without cause. His short-term incentive opportunity has been raised to 90% of his base salary to reflect his expanded responsibilities as Interim President and CEO.

Yes, Target's Income Continuance Policy includes provisions for the recovery of severance payments and potential termination of outstanding equity awards if Mr. Steinhafel becomes employed by specified competitors. He must also sign an agreement that includes a non-solicitation clause and a release of claims to be eligible for severance.

The $1 million restricted stock unit grant to John J. Mulligan serves as a significant retention and performance incentive, tied to his new executive role. The vesting schedule encourages his continued commitment, and the clause for accelerated vesting upon involuntary termination without cause provides a degree of security for him in his expanded leadership position.