Market Overview

Korn Ferry Research Shows Retail Executive Bonuses are Increasing as Industry Experiences Year-Over-Year Growth

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- Percentage of Retail Execs Who Received Targeted Bonus Amounts
Nearly Doubled in 2018 -

New research from Korn
Ferry
(NYSE:KFY) shows an uptick in retail executive bonuses as the
retail trade industry sees improved performance.

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. The study found that in 2018,
nearly a third (29 percent) of retail corporate executives had bonus
payouts of at least 100 percent of their targeted bonuses. In 2017, only
15 percent of retail executives received at least 100 percent 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 percent
receiving no bonus in 2018, compared to 29 percent receiving no bonus
the year prior.

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

Retail Senior Executives

Year       Percent Who Receive No Bonus
2018       5 percent
2017       29 percent
2016       25 percent
2015       25 percent
2014       11 percent
2013       10 percent

The bonus increases correlate to better performance in the industry. The
National Retail Federation predicts retail sales will increase
approximately 4 percent 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. That results in an increase in the size of bonuses
retailers are able to award their executives," said Craig Rowley, a Korn
Ferry senior partner specializing in the retail industry. "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."

To continue to strive for increased profitability, as traditional brick
and mortar retailers continue to face competition in e-commerce -- and
new increases in minimum wage take a huge chunk of retailer profits --
some retailers are innovating to curb costs.

"We're seeing a trend toward retailers taking a hybrid approach, with
sales associates having access to the company's e-commerce site to order
product not in the store. There is also experimentation with showroom
stores where consumers can see, touch and experience merchandise, but
can then make their orders online," said Rowley. "This gives consumers a
chance to interact with a retailer and a brand, and also allows for
smaller stores with less need for inventory space and sales personnel."

About Korn Ferry

Korn Ferry is a global organizational consulting firm. We help clients
synchronize strategy and talent to drive superior performance. We work
with organizations to design their structures, roles, and
responsibilities. We help them hire the right people to bring their
strategy to life. And we advise them on how to reward, develop, and
motivate their people.

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