Dollar Tree
June 10, 2021
Michael Witynski, who was promoted to President and CEO of Dollar Tree in July 2020, had total compensation of $10,767,887. As part of his promotion, Witynski's salary increased by 23.8% from $857,692 to $1,184,615. He also received a cash award of $2,433,210, and an option award valued at $7,088,690.
Dollar Tree was one of the companies featured in the Institute for Policy Studies report “Pandemic Pay Plunder: Low-Wage Workers Lost Hours, Jobs, and Lives. Their Employers Bent the Rules — To Pump up CEO Paychecks.” The report found that “of the 100 S&P 500 firms with the lowest median worker wages, 51 bent their own rules in 2020 to pump up executive paychecks.”
The section on Dollar Tree noted that, “This discount retailer’s top executives all failed to meet their 2020 bonus targets. The Dollar Tree board of directors ignored that failure and awarded the executives restricted stock grants with approximately the same value. For new CEO Michael Witynski, who spent less than six months in the top post in 2020, this translated into a bonus valued at about $1.5 million, boosting his total compensation to $11.3 million. That compensation amounted to 715 times the pay of the company’s median worker, a U.S. part-timer who earned $15,816.”
In response to an inquiry, a spokesperson told the Daily Mail that, “The Board decided to pay a portion of the earned bonuses in stock, instead of all in cash. The stock portion for Mr. Witynski was $1.08 million, not $1.5 million.”
In addition, the Daily Mail reported that a spokeswoman for Dollar Tree “disputed the findings, saying top executives actually did meet their original 2020 bonus requirements, at the maximum level.”
In this case, the point wasn’t simply whether the requirements were met, but also how they were set. The company is explicit in its proxy statement that the company created a definition of adjusted operating income in March 2020 that “was intended to exclude the impact of circumstances outside of the executives' control.” Throughout this proxy season, shareholders have often voted against such attempts to protect executive compensation from the reality the pandemic. Given the timing of Dollar Tree’s fiscal year, it was a matter of how goals were originally set and defined, rather than a change in metrics.
The company spokesperson also told the Daily Mail, “Additionally, in 2020 during the pandemic, the Company paid $248.4 million in premium pay or bonuses to store and distribution center associates and managers, the majority of which are women and people of color.”
I collected the data disclosed under pay ratio in the proxy statements filed in 2021, 2020, 2019 and 2018, in part to see how these premium pay and bonuses were reflected in those figures. For the past three years the company has included a “supplemental” figure that provides a separate pay ratio for full time employees. Based on these numbers, we can see that median pay for a full-time employee did increase from $30,084 for those employed as of February 1, 2020 to $32,357 for those employed January 30, 2021. However, median pay for all employees, including part-time employees, barely changed at all over that time period, going from $15,357 to $15,816. This serves to amplify a larger point about the pandemic: the vast inequality in protections received.