Retailers Rake in Higher Pay

New York — All things considered — and some of those things would include stock options, and the sweetening effect that chargebacks can have on a retail chain's profits and its executives' perks and pay — it's a whole lot better to be a retailer than a vendor these days, especially when it comes to carting your salary to the bank in a Brink's trunk.

Take the case of Robert Ulrich, chairman and ceo of Target Corp., who took home a total of $43.0 million last year — almost three times as much the combined total of just $15.5 million for all 12 textiles-vendor executives ranked in the seventh edition of HTT's annual Executive Compensation Survey. It's almost as good to walk out the door. As with Alan Lacy, the former Sears skipper,

who pocketed $23.2 million when he cleared out his desk.

Always the case, stock options played a disproportionate role in making up a retail executive's compensation, especially as those options, once an incentive for improving a chain's performance, have become institutionalized and routine, doled out even when comps or profits aren't what they used to be.

And without those stock options, most retail executives might be buying their suits at the same stores as textile executives. In Ulrich's case, for example, stock options exercised last year totaled $34.9 million, somewhat more than 80% of his entire pay package. A $6.5 million bonus also helped to swell the total. Pull those out, and his cash salary was $1.6 million, not that far removed from the $825,000 pulled down by Mohawk's Jeffrey Lorberbaum, ceo of a much smaller company.

But being a retailer doesn't make a big pay check a certainty, especially when it comes to the cash componeant of compensation, stock options aside. Over the past three years, one of every three executives in this year's ranking, 18 of the 54, took a cut in cash compensation. Notable was David Perdue, Dollar General ceo — and a man vividly remembered in the textiles business for his abbreviated tenure at the helm of Pillowtex Corp. — whose three-year cash compensation was slashed by 59.8%, to a total of $988,000 last year, with no stock options awarded. Another exec whose take-home pay sank when it came to cash compensation was Norman Axelrod, former Linens 'n Things ceo, whose three-year cash take was cut by 24.8%, to $904,000, no options awarded.