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Target Doubles Salaried Employee Bonuses As Profits Surge

By Nithya Bose in Business News, posted March 22, 2024

Target said it’ll double the annual bonus pay for its salaried employees, after a big surge in profits.

This decision follows nearly two-years of difficulties for the retail giant.

The company faced inventory management issues, subdued consumer spending on non-essential items, escalating supply chain expenses, and increased theft incidents.

The retailer confirmed it will fulfill 100 percent of the eligible annual bonus amounts for salaried staff.

It’s a major leap from the 50 percent payout of the previous year.

This move aligns with Target’s policy of tying bonus payouts to the company’s achievement of predefined sales and profit targets.

Target said: “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 expects to distribute these cash bonuses by the end of March.

The maximum payout is capped at 175 percent of the eligible bonus amount.

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This bonus increase benefits Target’s salaried employees.

Most staff don't qualify for the bonuses

However, most of the company's 415,000 workforce are not eligible for these bonuses.

Target does offer incentive payments to leadership roles within its stores and supply chain operations, in addition to certain corporate positions.

The bonus structure for Target’s top executives is calculated differently.

Despite facing consecutive quarters of declining sales, including a downturn in e-commerce performance during the holiday season, Target remains optimistic about the future.

The retailer has projected a modest growth in comparable sales.

These range from a two percent increase for the fiscal year 2024.

This outlook is supported by improved profits and margins, attributed to more effective inventory management and reduced freight costs.

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