Unsettled retail environment taking toll on senior executives pay

Volatility in the retail industry is now hitting senior retail executives in the pocketbook.



Seventy-three percent of retail companies paid little to no bonuses to senior executives in 2017 for 2016 performance, with 35% paying no bonus and 38% paying only small bonuses to their executives, according to new research by Korn Ferry. The company conducted an analysis of 40 North American retailers with annual sales between $1 billion and $50 billion



The study found that the percentage of retailers paying no bonuses to executives has steadily increased during the past five years. Only 15% of the retail companies paid senior executives their target or above bonus amount in 2017.



“Bonuses are typically tied to the performance of the retailer, and historically about 50% of retailers achieve their business plan for profits and pay executives their normal bonuses,” said Craig Rowley, a Korn Ferry senior partner specializing in the retail industry. “The fact that this year only 15% of companies met or beat their expected profit plan and paid full bonuses to executives exemplifies the challenges facing the industry.”



Korn Ferry provided a five-year look at the percentage of retail senior executives who received no bonus:



2017: 35%

2016: 25%

2015: 25%

2014: 11%

2013: 10%