Targeting 17,600 Canadian workers with pink slips and a pittance: Target's ex-CEO makes off like a bandit
This Target store in Toronto is one of 133 Canadian stores that are being closed as the parent company cuts its losses. (Nathan Denette/Canadian Press)
Social media readers had some snarky comments Thursday about reports that the former CEO of Target got a total severance and other benefits package worth about the same as the total amount being offered to all 17,600 of the chain's Canadian employees who will soon be out of work as the company winds down its presence in Canada.
Target's "employee trust" package for its Canadian workers, announced last week, amounts to $70 million ($56 million US). It's designed to provide each worker with 16 weeks of pay.
Depending on who's doing the calculation, the golden handshake handed to ex-CEO Gregg Steinhafel last May is in roughly in the same ballpark.
Fortune Magazine put the value of his total "walk-away" package, including stock options and other benefits, at $61 million US, including severance of $15.9 million.
"I'm not normally one to jump on the anti-corporate bandwagon, but these numbers really put things in perspective," wrote Reddit user leafsfan_89 on a busy Reddit chat page.
"My next gig is to become a CEO of a company, fail miserably and collect millions," a Twitter user named Tim Parent tweeted Thursday morning.
The reference is to Steinhafel's tenure at the helm of the troubled retailer. A year ago, Target suffered a massive data breach affecting 70 million U.S. customers.
Target's ill-fated expansion into Canada also cost the company billions of dollars, prompting the new CEO and board to cut their losses and shutter all of the retailer's 133 Canadian locations.
CEOs of major corporations are compensated at rates that are often hundreds of times higher than their rank-and-file employees. Last year, an analysis by the Economic Policy Institute showed that the top U.S. CEOs made 296 times more than the wage of an average worker in their industry.
A report earlier this month by the Canadian Centre for Policy Alternatives found that Canada's top-paid CEOs saw their compensation climb at double the rate of the average Canadian between the depths of the recession and 2013.
Billions owed to creditors
In a separate development, the depth of Target Canada's debts has also been revealed.
Alvarez & Marsal Canada, the court-appointed monitor handling Target Canada's creditor protection and insolvency, has filed papers that show the retailer has total liabilities of $5.1 billion, including accounts payable of about $546 million.
The monitor has listed 42 pages of creditors that Target Canada owes money to.
The amounts include $12,036,000 to the Canada Revenue Agency, $8,372,000 to the Canada Pension Plan Investment Board, $2,674,000 to the province of British Columbia, and smaller amounts to hundreds of other creditors.
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