Photo: Target
Target ditched its mandatory retirement age to keep Brian Cornell in charge
Target will apparently need CEO Brian Cornell when he’s 64, and beyond.
Mr. Cornell, who has had a remarkable run since taking over as CEO in 2014, is expected to continue leading Target for another three years. All it took was for the company to scrap its mandatory retirement age of 65 so the CEO, currently 63, would be able to carry on doing his job.
“It was important to us as a board to assure our stakeholders that Brian intends to stay in his role beyond the traditional retirement age of 65,” Monica Lozano, lead independent director of Target’s board, said in a statement. “We enthusiastically support his commitment and his continued leadership, especially considering his track record and the company’s strong financial performance during his tenure.”
Mr. Cornell has led a transformation of Target’s business as CEO. The retailer on his watch has made significant investments in its employees, remodeling existing stores, opening smaller format locations, expanding private and exclusive labels, engaging in key merchandising partnerships (Apple, Levi’s, Ulta) and upgrading its technological capabilities in pursuit of making it the easiest place to shop. Target’s investments in its people and technology is particularly evident in its digital commerce operations, with stores fulfilling around 95 percent of all orders placed through the chain’s app and on target.com.
“By taking care of our guests, our team, our communities and our shareholders, Target has added nearly $40 billion in annual revenue since I joined the company, and in many ways, we’re just getting started,” said Mr. Cornell. “Our success is fueled by the best team in retail, and I am confident our culture will continue to propel our company forward.”
Target hit a rough patch this year, finding itself with excess inventory as consumer demand softened with rising prices. The chain made the decision under Mr. Cornell to aggressively mark down overstocked items to free up inventory space, albeit with the effect of lowering profit margins.
Mr. Cornell, speaking last month on the company’s second quarter earnings call, said the decision was the right one.
“We’ve meaningfully reduced our ownership and commitments in categories where we’ve seen softening demand,” said Mr. Cornell. “This has allowed us to strengthen our inventory position and in-stock position in the categories that are driving our growth, most notably in food and beverage, beauty and essentials.”
Discussion Questions
DISCUSSIONS QUESTIONS: What is your position on mandatory retirement ages in retail? What should Target be doing now in anticipation of the day when Brian Cornell eventually steps down as CEO?
Poll
Loading …BrainTrust
The older I get, the more stupid the idea of mandatory retirement seems.
This gives me more hope as I get older.
Mr. Cornell’s aggressive approach to Target’s inventory problems is one more sign of his effective leadership (in good times and bad) since taking the helm. Showing him the door at the arbitrary age of 65 would make no sense — there is nothing magical about that number suggesting that any senior executive has lost a step. (Retail leaders aren’t flying airplanes, after all.) If anything, Target’s decision allows the company to put a stronger succession plan in place.
Even flying airplanes pilots could be asked to take a proficiency test annually.
This is probably the right call for Target. Target has hit a rough patch (as are other retailers as well) and I believe Mr. Cornell is the guy to help them get out of the hole. I can see more retailers who have that mandatory retirement age doing away with it in the future.
I do not agree with mandatory retirement ages. Our head of state is 79. Her Majesty The Queen who served her whole life, until yesterday’s tragic end, was 96. And I am sure Mr. Cornell, with all his experience and skill, has many, many more good years of service left. That said, succession is important so Target should be identifying and grooming a number of future leaders who can step up the ranks as needed.
It’s hard to think of something more archaic than a mandatory retirement age, certainly when the number starts with a “6.” Mr. Cornell can lead Target on to bigger and better things for several years to come. Having said that, it’s not too early to have a solid secession plan in place. I have to believe that Target has some kind of rolling 3-5 year strategic plan. That plan deserves to be executed with a smooth hand-off.
Ditching the mandatory retirement age is a smart move for Target. I am surprised they had it in the first place, as it appears to be age discrimination. Employment decisions should be based on employee performance, not age. Target, and all companies, should be actively executing succession planning which includes grooming their future leaders.
Given the challenges today of finding and keeping good staff, mandatory retirement is just bad business. Now more than ever companies are in need of both continuity and fresh thinking to get through the new evolutionary point that retail is entering. Why not focus on the right person for the job and forget about age, race and gender completely? Maybe some day we’ll get there. I hope.
While I have no intention of dying with my boots on (so to speak), and I have cut back on my activities dramatically, I’m also way past 65 and feel like mandatory retirement is a dated concept. It should be updated by about 15 years or so. Actually, one wonders why it needs to be “mandatory” at any age.
The Age Discrimination in Employment Act got rid of mandatory retirement at 70 years of age so why is this even an issue? Especially in retail?
Brian Cornell is 63 and at the top of his game. Target made the right move to allow him to stay on past 65. It’s sad that it takes someone of Brian’s stature to change this policy. I am certain there were other employees who were equally effective at their Target jobs who were not ready to retire at 65.
I refer to my comment yesterday about Lisa LaFlamme, the reporter who was fired because she let her hair go gray during COVID-19. Did that gray hair make her lose brain cells? Will Mr. Cornell become less of a leader when he turns 65? The answer to both questions is no.
Duh. P.S.: is mandatory retirement even legal?
A mandatory retirement age is silly. The wisdom, experience and leadership that men and women offer to their enterprises in their 60s and 70s are incredibly powerful. Mr. Cornell is a young 63 and in the prime of his managerial career and has many, many solid years ahead of him. We just saw Queen Elizabeth II die yesterday at 96, and although her role is a bit different than a CEO’s, some of her best and most influential years were between her 60s and 80s. One of the companies I worked for in my career had a quiet policy of packaging out employees in their early 50s, which I always thought was ethically wrong and just plain ignorant, creating self-inflicted brain-drain.
Gen X: once all the Boomers finally retire, there will be all sorts of top positions open that we can finally fill thanks to our long experience and plenty of “sideways promotions.” There won’t be a large generational cadre so they’ll have to remove retirement caps and we can finally steer companies where they need to go; there’s still just enough time to put the economy back together again so it works for everyone….
Boomers: hey everyone, we removed retirement caps so I can keep going for as long as I feel like it! And my succession plan is to promote my Millennial nephew because he knows what TikTok is!
Let’s see, millions of jobs unfilled and a need for skills and experience on the one hand — and mandatory retirement on the other. I’m not sure about pilots flying at 75 or 80 but clearly one rule for all makes no sense.
We may see many more retailers scrap mandatory retirement ages as finding staff is becoming more difficult and keeping older valued members of staff is a real benefit to the company. When it comes to an employee who has had the impact of Brian Cornell it makes perfect sense, but it does for others as well. The question then comes as to what age should anyone be forced to retire? Provided they are contributing then what is the problem? We need more staff so it is not as if the person is taking a job from some younger person. In Brian Cornell’s case I am sure the board will let him know when his sell-by date is up, which is the right answer. Manage people and you do not need statutory regulations.
Has no one noticed the president of the United States is 79? And his predecessor is 76? Today, age is just a number. Literally. We probably all know 65-year-olds who look and act like 75-year-olds, and 65-year-olds who look and act like they’re 55. The bar should be set at mental acuity, not some arbitrary number based on the year you happened to be born.
I know a guy who started his third company at 65.
I assume this change goes for every Target worker. Ironically, terminating the CEO is the easiest (if most costly) position to change, regardless of age.
How should Target or any company plan for the change in leadership? The answer is easy, plan for it and groom succession.
If the C-suite currently does not have leading candidates, the company is promoting the wrong people.
I’m a Target veteran, and I remember when Bob Ulrich was “retired” when he reached 65. He was an effective leader, and I suspect he had a lot to give back to the company. At the time, I was in favor of the move. It certainly helped bring fresh ideas. Across town, at Best Buy, I watch their CEO Dick Schulze take retirement, come back from retirement, take it again, come back… That wasn’t a great plan at all. It was confusing for the team and led to whiplash policy changes. There’s value in experience and continuity. As long as the leader continues to lead and the company continues to thrive, a number shouldn’t be the determining factor in forcing an employee to leave.
Full disclosure, my perspective on this at 60 is different than it was at 35.
It could be argued that this is a result of a shortage of talent in the marketplace as a whole. During the pandemic there were people who left the workforce through retirement earlier than anticipated. This is now being highlighted as one reason companies are struggling to fill vacancies in many areas – with retail leaders such as Sharon White of John Lewis (UK) asking for those who retired to consider coming back.
We all crave choice and removal of a mandatory retirement age gives us more choice. I hope this becomes a more widely adopted move.
Agism is the ultimate glass ceiling, something all of us have experienced at one point or another in our careers, whether that’s wondering why the “old” folks just don’t get out of our career paths, or worrying about what happens when “those damn kids” take over. I agree with my fellow BrainTrusters that age is just a number and not necessarily an indicator of talents, abilities, and performance. That said, lets look at the two central justifications for age limits. First is the argument that if nobody is forced to retire they will continue to occupy all the “good” jobs and block the upward mobility of younger, talented individuals. Second is the argument that the “old” – and God knows that’s a moving target depending on how old you yourself are – can’t, don’t, or won’t understand people younger than themselves, new technologies, new consumer trends, etc. Which brings us down to the heart of the matter. I favor meritocracy. I occasionally work with a distinguished anthropologist who will never see 80 again. He has the most dynamic mind, innovative and creative thinking, and radical rethinking of all most of us hold as “given” I have ever met. I’ve used him in any number of direct client engagements and 100 percent of those engagements have been massive successes. Sure, he looks like he’s in his 50s, so clients don’t know how old he is, but that doesn’t matter. They are judging him solely on the value he delivers. And if he lives to 90 and his thinking continues to expand and evolve, I’ll be happy to use him as a valued resource then. By contrast some people including the so-called “quiet quitters” mentally stop evolving the day they are handed their MBA and check out after the first six figure job they land, brain and creativity dead at 26. As to what Target should be doing, they should be looking for another Brian Cornell and grooming her or him or them to take over when Mr. Cornell decides he has had enough.
When I go to Home Depot and need help in the plumbing department, I look for the old guy. He’s the retired plumber that went back to work. His experience and wisdom (related to plumbing) is superior to most others. It’s the same in any business. I wasn’t aware of Target’s mandatory retirement age. I like that they are extending it, as age bias is becoming a bigger issue. The reason behind the extension is self-serving, but I’m okay with that. If nothing else, it means Target has come to the realization that there is benefit to keeping the best people, regardless of age.
I think it’s a silly policy. Ageism is a problem. Performance should be the only key metric. Age is just a number.
As a Professor Emeritus, a fancy term for retirement, I never was in favor of mandatory retirement ages. My philosophy was to stop teaching before my students stopped listening. A retirement decision is not age determined. Instead, the individual needs to ask a few questions: Am I still having fun and making a difference? Do colleagues honestly believe I am making a positive contribution in my leadership role? The answers to these questions, not a number, will let you know when it’s time to pass the baton.
In the Target situation, I assume that a bench of qualified candidates has been developed for key positions. This applies to the CEO position as well.
This seems like a follow-up to yesterday’s post about (alleged) “ageism”; obviously any arbitrary age limit is just that … arbitrary; and as such is seldom going to obtain the same result as carefully considering individual circumstances.
That having been said, it is a way to ensure that new blood is (at least occasionally) introduced. So what it is, is really a check on directorial incompetence.
Ok, I’ll be the contrarian. There is actually some benefit to having mandatory retirement ages for senior executives. One, it helps companies avoid the problem of having underperforming executives hanging on long past their usefulness, and it also helps ensure lower rank executives are not demoralized by not having a chance at securing positions in the upper echelons of the company leading to a brain drain as junior executives leave for brighter prospects.
Mandatory retirement ages ensures the C-suite doesn’t get stale and as the Cornell situation shows, they’re easily amended when a good CEO is wanted to be kept around.