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Retail exec bonuses on the rise, reversing five-year trend

Improved year-over-year retail growth in 2017 has contributed to a dramatic reversal in payouts for retail executives.

The percentage of retail executives who received targeted bonus amounts nearly doubled in 2018, according to new research from Korn Ferry. The study found that in 2018, 29% of retail corporate executives had bonus payouts of at least 100% of their targeted bonuses. In 2017, only 15% of retail executives received at least 100% of their target bonus.

Conversely, the percentage of retail executives who received no bonuses took a fairly dramatic drop year-over-year, with only 5% receiving no bonus in 2018, compared to 29% receiving no bonus in 2017.

Korn Ferry conducted an analysis of 65 North American retailers, with median annual sales of approximately $5.2 billion representing approximately 5.5 million employees.

2018 reverses a 5-year-trend of executives increasingly receiving no bonuses.

The bonus increases correlate to better performance in the industry, Korn Ferry noted. The National Retail Federation predicts retail sales will rise approximately 4% in 2018 compared to 2017.

“Despite ongoing high-profile retail closures, the industry in general is continually evolving to attract customers and increase financial performance,” said Craig Rowley, a Korn Ferry senior partner specializing in the retail industry. “That results in an increase in the size of bonuses retailers are able to award their executives. Organizations are also widening performance ranges at which executives will be able to begin to earn their bonuses. This allows them to reward executives for business improvement as they strive to achieve their business plans in a competitive market.”
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