Retail Execs Prosper

By James Mammarella -- Home Textiles Today, 10/29/2007 12:00:00 AM

New York — —

New York —The leading retailers of home textiles had a fairly respectable year in 2006 — while the top retail executives had a marvelous time indeed.

In 2005, 35 of the retailer executives in the HTT Executive Compensation Report took home cash and stock options exercised equivalent to $1 million or more. In 2006, there were 49 execs who took home $1 million or more.

In the thin-air range, 11 retailer execs took home $5 million or more in 2005, while in 2006 there were 19 who reached that pinnacle.

Of course, it wasn't all upside. Target chairman and ceo Bob Ulrich took home just $33.87 million — not measly, but rather modest compared to his $42.97 million payday for the year prior.

And while the 2005 second-place payday went to a Sears Holdings exec — vice chairman Alan Lacey, with $23.22 million — he has since departed, dropping Sears to the middling ranks of the 2006 payscale table, with president and ceo Aylwin Lewis taking home $1.90 million in total cash compensation.

There were other changes at the top.

The $10 million club among retailers featured six top executives in both 2005 and 2006, but some of the faces have changed — and a woman exec entered this heady mix, even if it was only for a brief sojourn.

There were three $10 million repeaters: Ulrich, along with Kohl's ceo Lawrence Montgomery and the now-departed Home Depot chairman, president and ceo Robert Nardelli (who left the company on Jan. 2, 2007).

The three new faces: Arlene Meier ($15.77 million total cash compensation), who was coo at Kohl's until her retirement on Sept. 1, 2006; James Sinegal ($13.14 million, including no bonus and his usual $350,000 in salary), president and ceo of Costco; and Jeffrey Brotman ($12.37 million), chairman of Costco.

Some perspective is gained by taking a three-year look.

Aggregate sales for the industry (as gauged by the HTT Top 50 Retailing Giants, which account for 90% of the market) climbed 5.1% to $24.7 billion in 2006, up from $24.2 billion in 2005, which was 2.5% above the $23.6 billion generated at retail in 2004. Thus in the three-year period 2004-2006 sales grew about 4.7%.

Now contrast that 4.7% overall retail company sales increase with the three-year gains of dozens of retail executives whose compensation boomed and zoomed by anywhere from double-digits to such levels as the merely stratospheric 112.9% by Michael Balmuth (Ross Stores vice chairman, president and ceo), to the convincingly orbital 248.1% by Aylwin Lewis (Sears Holdings president and ceo), to the utterly outer-space 535.7% by Mike Ullman (JCPenney chairman and ceo).

Of course, the net income gain over three years was top-of-class impressive at each of these retailers — Ross: 42.2%, Sears: 68.6%, JCPenney: 125.2%.

And the 2006 take-home of those three execs in dollars was not exactly jaw-dropping: Balmuth scored a hearty $7.02 million, Lewis a relatively modest $1.90 million, and Ullman had a seemingly mid-level payday of $4.17 million.

Interestingly, income at Target actually dropped 12.9% over the three-year period (from $3.19 billion for 2004 to $2.79 billion for 2006) — while chairman and ceo Ulrich's income rose 18.5% over that period, and that of his colleague, Target president Gregg Steinhafel, climbed 20.6%.

A similar discrepancy can be found at Pier 1 Imports. There, income has declined by an extremely challenging 476.5% over the three years, while the total cash compensation of former chairman and ceo Marvin Girouard (who retired Feb. 19, 2007) grew by 8.1% during that time frame.

Wal-Mart, the world's biggest retailer, managed to add 9.9% to its income between 2004 and 2006.

Some of Wal-Mart's top managers did somewhat better. For example: Michael Duke, vice chairman of international, more than doubled his take-home pay over the three years, with his 2006 total cash compensation of $4.71 million equal to 119.0% more than his 2004 payday.

RETAILERS 3-YEAR SALARY VS. EARNINGS COMPARISON

Name	Company	Tot. Comp Change	Sales	Income
Myron E. Ullman, III	JCPenney	535.7%	10.0%	125.2%
Aylwin B. Lewis	Sears Holdings	248.1	-4.6	68.6
R. Lawrence Montgomery	Kohl's	194.6	32.8	57.6
Kevin B. Mansell	Kohl's	193.6	32.8	57.6
Byron L. Bergren	Bon-Ton	189.8	156.6	132.5
Arlene Meier	Kohl's	149.4	32.8	57.6
Bernard Cammarata	TJX	127.9	16.7	21.0
Michael T. Duke	Wal-Mart	119.0	21.0	9.9
Michael Balmuth	Ross Stores	112.9	31.4	42.2
Carol Meyrowitz	TJX	64.3	16.7	21.0
Ken C. Hicks	JCPenney	54.2	10.0	125.2
Ross E. Manning	Tuesday Morning	53.2	1.5	-41.8
Gary G. Friedman	Restoration Hardware	50.7	35.6	90.8
David M. Tehle	Dollar General	43.9	19.7	-59.9
R. James Kelly	Family Dollar	38.3	21.1	-24.3
Michael J. Hayes	Fred's	36.0	22.6	-4.3
Howard R. Levine	Family Dollar	35.3	21.1	-24.3
Arthur Stark	Bed Bath & Beyond	34.0	28.6	17.7
Alex Dillard	Dillard's	29.1	1.4	108.8
Drue Corbusier	Dillard's	28.4	1.4	108.8
William Dillard, II	Dillard's	28.0	1.4	108.8
Mike Dillard	Dillard's	27.6	1.4	108.8
Kathleen R. Guion	Dollar General	27.1	19.7	-59.9
Francis S. Blake	Home Depot	25.3	24.3	15.2
John B. Menzer	Wal-Mart	22.9	21.0	9.9
Arnold S. Barron	TJX	22.5	16.7	21.0
John D. Reier	Fred's	21.9	22.6	-4.3
John W. Tate	Restoration Hardware	21.9	35.6	90.8
Gregg W. Steinhafel	Target	20.6	26.7	-12.9
Steven H. Temares	Bed Bath & Beyond	19.4	28.6	17.7
Robert J. Ulrich	Target	18.5	26.7	-12.9
E. Mitchell Weatherly	Pier 1 Imports	12.2	-11.1	-476.5
Marvin J. Girouard	Pier 1 Imports	8.1	-11.1	-476.5
Robert L. Nardelli	Home Depot	7.5	24.3	15.2
H. Lee Scott, Jr.	Wal-Mart	4.1	21.0	9.9
Jay R. Jacobs	Pier 1 Imports	3.5	-11.1	-476.5
Warren Eisenberg	Bed Bath & Beyond	1.8	28.6	17.7
Leonard Feinstein	Bed Bath & Beyond	1.8	28.6	17.7
Jeffrey H. Brot man	Costco	1.2	25.1	25.0
Laura J. Alber	Williams-Sonoma	-2.7	18.8	9.2
Thomas M. Belk, Jr.	Belk	-4.8	50.6	46.6
Terry J. Lundgren	Macy's	-10.4	71.0	44.4
Susan D. Kronick	Macy's	-10.6	71.0	44.4
Wayne P. Garten	Hanover Direct	-11.9	15.3	-227.3
Marta H. Benson	Restoration Hardware	-13.1	35.6	90.8
H.W. McKay Belk	Belk	-13.8	50.6	46.6
John R. Belk	Belk	-13.8	50.6	46.6
Michael J. Marchetti	Tuesday Morning	-17.7	1.5	-41.8
Robert A. Niblock	Lowe's	-17.8	28.7	42.7
Patrick J. Connolly	Williams-Sonoma	-21.5	18.8	9.2
David A. Perdue	Dollar General	-32.0	19.7	-59.9
Tim Grumbacher	Bon-Ton	-33.4	156.6	132.5
Larry D. Stone	Lowe's	-36.1	28.7	42.7
James D. Sinegal	Costco	-36.4	25.1	25.0
Kathleen Mason	Tuesday Morning	-39.6	1.5	-41.8
W. Howard Lester	Williams-Sonoma	-42.9	18.8	9.2
Michael D. Fisher	Stein Mart	-45.9	2.9	-2.1
Alan Rosskamm	Jo-Ann Stores	-64.2	2.1	-104.1

EXECUTIVE COMPENSATION RETAILERS
dollar amounts in thousands

Name, Title	Company	Total cash, stock options exercised	Salary 2006	Bonus 2006	Total cash compensation	Value of stock options exercised	Total cash comp. 3-yr. % change 2004-2006
1. Retired as of Sept. 1, 2006. 2. On Jan. 2, 2007, the company entered into a separation agreement with Nardelli. 3. Served as acting ceo through the end of fiscal 2007; continues as chairman. 4. Promoted to president and coo effective Dec. 16, 2006. 5. Resigned Oct. 5, 2006; continued employment status through June 30, 2007. 6. Appointed vice chairman in September 2006. 7. Became ceo Jan. 28, 2007; appointed a director in September 2006. 8. Promoted to president in Jan. 2006. 9. Joined company on Aug. 1, 2006. 10. Became chairman and ceo on Feb. 14, 2006. 11. Retired Feb. 19, 2007. 12. Became chairman, president and ceo on July 24, 2006. 13. Appointed coo on May 9, 2006. 14. Resigned July 24, 2006. 15. Federated Department Stores became Macy's Inc. on June 1, 2007. 16. On Feb. 14, 2006, Linens Merger Sub Co. merged with and into Linens 'n Things, a wholly-owned subsidiary of Linens Holding Co.
Robert J. Ulrich, chairman and ceo	Target	$33,866	$1,660	$6,129	$7,789	$26,078	18.5%
R. Lawrence Montgomery, ceo	Kohl's	25,476	1,087	1,925	3,012	22,464	194.6
Arlene Meier 1,former coo	Kohl's	15,761	452	1,374	1,826	13,935	149.4
James D. Sinegal, president and ceo	Costco	13,137	350	0	350	12,787	-36.4
Jeffrey H. Brotman, chairman	Costco	12,368	357	200	557	11,811	1.2
Robert L. Nardelli 2, former chairman, president and ceo	Home Depot	10,625	2,332	6,000	8,332	2,293	7.5
Terry J. Lundgren, chairman, president and ceo	Macy's 15	8,969	1,383	2,705	4,088	4,880	-10.4
Kevin B. Mansell, president	Kohl's	8,246	946	1,675	2,621	5,625	193.6
Bernard Cammarata 3, chairman and acting ceo	TJX	8,070	912	0	912	7,159	127.9
Michael Balmuth, vice chairman, president and ceo	Ross Stores	7,018	994	1,100	2,094	4,925	112.9
Larry D. Stone 4, president and coo	Lowe's	6,701	770	491	1,261	5,439	-36.1
Thomas L. Cole, vice chairman	Macy's 15	6,555	883	894	1,778	4,777	—
Ken C. Hicks, president and chief merchandising officer	JCPenney	6,278	791	1,073	1,864	4,413	54.2
Ronald W. Tysoe 5, former vice chairman	Macy's 15	6,092	830	802	1,632	4,460	—
H. Lee Scott, Jr., president and ceo	Wal-Mart	5,586	1,300	4,286	5,586	0	4.1
Gregg W. Steinhafel, president	Target	5,567	1,130	1,044	2,174	3,393	20.6
Susan D. Kronick, vice chairman	Macy's 15	5,387	1,043	1,039	2,082	3,305	-10.6
Donald G. Campbell 6, vice chairman	TJX	5,205	741	897	1,638	3,567	—
John B. Menzer, vice chairman, chief administrative officer	Wal-Mart	5,162	1,000	2,436	3,436	1,726	22.9
Michael T. Duke, vice chairman - international	Wal-Mart	4,707	900	2,463	3,363	1,344	119.0
W. Howard Lester, chairman and ceo	Williams-Sonoma	4,674	975	0	975	3,699	-42.9
Carol Meyrowitz 7, president	TJX	4,623	1,077	2,018	3,094	1,528	64.3
Myron E. Ullman, III, chairman and ceo	JCPenney	4,174	1,500	2,674	4,174	0	535.7
Alex Dillard, president	Dillard's	3,978	680	2,482	3,162	816	29.1
William Dillard, II, ceo	Dillard's	3,958	770	2,482	3,252	706	28.0
Robert A. Niblock, chairman and ceo	Lowe's	3,579	950	1,038	1,988	1,592	-17.8
Arnold S. Barron, senior evp, group president	TJX	3,396	673	729	1,401	1,994	22.5
Laura J. Alber, president	Williams-Sonoma	3,054	701	0	701	2,353	-2.7
Steven S. Fishman, chairman, ceo and president	Big Lots	2,592	960	1,632	2,592	0	—
Arthur Stark 8, president and chief merchandising officer	Bed Bath & Beyond	2,590	821	0	821	1,769	34.0
Byron L. Bergren, president and ceo	The Bon Ton	2,471	971	1,500	2,471	0	189.8
Anthony J. Buccina, vice chairman, president-merchandising	The Bon Ton	2,055	689	1,367 16	2,055	0	—
Frank L. Fernandez, former evp - secretary and general counsel	Home Depot	1,951	724	908	1,632	319	—
Eduardo Castro-Wright, evp, president and ceo - Wal-Mart stores division	Wal-Mart	1,948	721	1,227 17	1,948	0	—
Aylwin B. Lewis, ceo and president	Sears Holdings	1,900	1,011	889	1,900	0	248.1
Thomas Kingsbury 9, senior evp	Kohl's	1,838	375	1,463 19	1,838	0	—
Francis S. Blake, chairman and ceo	Home Depot	1,700	758	941	1,700	0	25.3
Howard R. Levine, hairman and ceo	Family Dollar	1,586	729	858	1,586	0	35.3c
Thomas M. Belk, Jr., chairman and ceo	Belk	1,577	817	760	1,577	0	-4.8
Patrick J. Connolly, director and evp - chief marketing office	Williams-Sonoma	1,556	567	0	567	989	-21.5
John R. Belk, president and coo	Belk	1,251	717	534	1,251	0	-13.8
H.W. McKay Belk, president and chief merchandising officer	Belk	1,251	717	534	1,251	0	-13.8
Steven H. Temares, ceo	Bed Bath & Beyond	1,231	1,231	0	1,231	0	19.4
Robert J. DiNicola 10, chairman and ceo	Linens 'n Things 16	1,190	1,190	0	1,190	0	—
Leonard Feinstein, co-chairman	Bed Bath & Beyond	1,100	1,100	0	1,100	0	1.8
Warren Eisenberg, co-chairman	Bed Bath & Beyond	1,100	1,100	0	1,100	0	1.8
Marvin J. Girouard 11, chairman and ceo	Pier 1 Imports	1,081	1,081	0	1,081	0	8.1
David A. Perdue, chairman and ceo	Dollar General	1,038	1,038	0	1,038	0	-32.0
Tim Grumbacher, executive chairman	The Bon Ton	1,037	675	362	1,037	0	-33.4
David B. Zant, vice chairman	The Bon Ton	927	519	408	927	0	—
R. James Kelly, president, coo and cfo	Family Dollar	875	466	409	875	0	38.3
Michael D. Fisher, president and ceo	Stein Mart	816	816	0	816	0	-45.9
Gary G. Friedman, president, ceo and chairman	Restoration Hardware	813	573	240 25	813	0	50.7
Darrell Webb 12, chairman, president and ceo	Jo-Ann Stores	808	404	404	808	0	—
Beryl J. Buley, division president - merchandising, marketing and supply chain	Dollar General	762	575	187	762	0	—
Ken Dunaj 13, coo	Restoration Hardware	687	317	370 29	687	0	—
Kathleen R. Guion, division president - store operatons and store development	Dollar General	663	500	163	663	0	27.1
Kathleen Mason, president and ceo	Tuesday Morning	633	633	0	633	0	-39.6
Wayne P. Garten, president and ceo	Hanover Direct	600	600	0	600	0	-11.9
Alan Rosskamm 14, former chairman, president and ceo	Jo-Ann Stores	515	375	0	375	140	-64.2
John D. Reier, president	Fred's	305	255	50	305	0	21.9
Michael J. Hayes, chairman and ceo	Fred's	299	224	75	299	0	36.0

RETAILER SALARIES
Top and bottom 5 retailers by 2006 salary*

*straight salary, excluding bonus, other cash compensation and stock options
Top Five
Robert L. Nardelli, Home Depot	$2,331,538
Robert J. Ulrich, Target	1,659,616
Myron E. Ullman, III, JCPenney	1,500,000
Terry J. Lundgren, Macy's	1,383,333
H. Lee Scott, Jr., Wal-Mart	1,300,000
Bottom Five
Jeffrey H. Brotman, Costco	$356,731
James D. Sinegal, Costco	350,000
Ken Dunaj&, Restoration Hardware	316,809
John D. Reier, Fred's	254,808
Michael J. Hayes, Fred's	224,231

RETAILER CASH BONUSES
Top and bottom 5 retailers by 2006 bonus

Top Five
Robert J. Ulrich, Target	$6,128,960
Robert L. Nardelli, Home Depot	6,000,000
H. Lee Scott, Jr., Wal-Mart	4,285,840
Terry J. Lundgren, Macy's	2,704,800
Myron E. Ullman, III, JCPenney	2,673,750
Bottom Five
Jeffrey H. Brotman, Costco	$200,000
Beryl J. Buley, Dollar General	186,875
Kathleen R. Guion, Dollar General	162,500
Michael J. Hayes, Fred's	75,000
John D. Reier, Fred's	50,000

RETAILER STOCK OPTIONS EXERCISED
Top and bottom 5 retailers by 2006 stock options exercised

However volatile and margin-shaving the retail environment seems today, it is clear that 2006 was a banner year in stock options for the top retail execs. The top five cash-ins of stock options added up to $87 million in 2006, compared to a top-five total of $84 million in 2005. Leave out the options exercised by a single executive — Target's chairman and ceo Bob Ulrich — and the year-to-year total swung up 24% to $61 million from $49 million. (In fact, bringing home $26 million in cashed-in options was a bit of an off-year for Ulrich — after his $35 million exercise in 2005.) The bottom five saw an even more dramatic upswing, totaling $2.97 million in 2006, up from $614,000 in 2005: an increase of 384%.
Top Five
Robert J. Ulrich, Target	$26,077,609
R. Lawrence Montgomery, Kohl's	22,463,875
Arlene Meier, Kohl's	13,935,338
James D. Sinegal, Costco	12,787,230
Jeffrey H. Brotman&, Costco	11,811,079
Bottom Five
Patrick J. Connolly, Williams-Sonoma	$989,280
Alex Dillard, Dillard's	816,000
William Dillard, II, Dillard's	705,750
Frank L. Fernandez, Home Depot	318,500
Alan Rosskamm, Jo-Ann Stores	140,350