Target CEO's personal use of corporate jet is capped ... at $175K a year

Author:
Updated:
Original:

Amid all the fallout from Target's decision to cut 1,700 Twin Cities job, another cost-cutting measure has flown under the radar.

The use of Target's corporate jet is an area where the retail giant has been saving money for the past several months, according to documents filed with the Securities and Exchange Commission Friday.

But the news isn't going to improve the mood of any of the victims of last week's layoffs, as the document shows that personal use of the jet by CEO Brian Cornell has been capped – at $175,000 a year.

So if Cornell uses the jet for personal getaways and the annual cost is more than that amount, he'll have to pay out of his own pocket.

According to the Pioneer Press, Cornell earns around $9 million a year from Target, but the cap was agreed upon when he became CEO last summer. Target told the Pioneer Press that this "represents a change," as use of the jet under former CEO Gregg Steinhafel was unlimited.

University of Delaware finance professor Charles Elson told the newspaper that the timing of this revelation, coming three days after the job cuts, was "particularly unfortunate."

In 2011, the Business Journal did a study into where corporate jets were being flown for business purposes. Toronto the most popular destination for Target – which was ahead of its ill-fated move into the Canadian market.

$1.6 billion tax break from Canada withdrawal

Another aspect of the SEC filing noted by Twin Cities Business was that Target is set to benefit from a $1.6 billion tax break as a result of its withdrawal from Canada.

The closure of its Canadian arm, resulting in 133 stores shutting down and 550 jobs being lost in the Twin Cities (plus thousands more in Canada), is costing the company $5.1 billion.

But, TCB notes that Target will be able to use the tax break to offset its losses when calculating its net income.

In the SEC document, Target says it "realized the majority of these tax benefits in the first quarter of 2015 and expect to realize substantially all of the remainder in 2015."

Next Up

Related