In 2009, our firm published an article (listed below) indicating the level of higher education held by the CEOs of the top 100 retail companies. We have now identified the ten currently highest paid retail executives and have discovered that this group confirms our previous study. The complexity of the retail business is such that executives who possess the most intellectual tools rise to the leadership roles. The statistics are as follows:
Education of Highest Paid CEOs Education of Top 100 Retail CEOs
BA degrees 90% 85%
MBA degrees 10% 23%
JD degrees 10% 6%
According to our research, the following executives fall into the category of the top ten highest paid executives. Total compensation for each is based upon current public records of publicly traded retail companies in the U. S.
Andrea Jung. Chairman and CEO – Avon
Total Compensation: $13.7 million
Education: Bachelor’s – Princeton University
Michael T. Duke. President, CEO and Director – Wal-Mart
Total Compensation: $13.3 million
Education: Bachelor’s – Georgia Tech
Terry Lundgren. Chairman, President and CEO – Macy’s
Total Compensation: $8.7 million
Education: Bachelor’s – University of Arizona
Francis S. Blake. Chairman and CEO – Home Depot
Total Compensation: $8.3 million
Education: Bachelor’s – Harvard College
JD – Columbia University
Myron E. Ullman – Chairman and CEO – J.C. Penney Company
Total Compensation: $8.0 million
Education: Bachelor’s – University of Cincinnati
Trudy Sullivan – President and CEO – Talbots
Total Compensation: $6.9 million
Education: Bachelor’s – Manhattanville College
Katherine L. Krill – CEO, President and Director – Ann Taylor Stores
Total Compensation: $6.9 million
Education: Bachelor’s – Agnes Scott
Robert A. Niblock – Chairman and CEO – Lowes
Total Compensation: $6.1 million
Education: Bachelor’s – University of North Carolina
Gregg W. Steinhafel – Chairman, President and CEO – Target
Total Compensation: $6.0 million
Education: Bachelor’s – Carroll College
MBA – Northwestern University
Carol M. Meyrowitz – CEO – TJX
Total Compensation: $5.7 million
Education: no degree
Following is the study we released in April, 2009, on the education level of the CEOs for the top 100 retail chains.
TOP RETAIL EXECUTIVES HAVE TOP EDUCATIONS!
A new study conducted by Plummer & Associates on the Chief Executive Officer education at the top 100 retailers in the United States shows that today over 85% have college degrees. This represents a significant increase over Plummer & Associates’ 2002 study that showed only 60% had earned college degrees. The number with advanced degrees has remained about the same; however, the new study shows the breakdown at 23% with MBA degrees and 6% with JD degrees.
Does this continuing trend mean that the industry can no longer be led by the person who starts with a push cart? Our research shows that while working your way to the top may have been a viable career path in the past, the constantly evolving and complex nature of today’s retail landscape requires that executives must couple their ground up experience with the sophistication and strategic vision gained through earning a college degree.
Retailers have consolidated from regional companies led by founding families into massive, complex businesses requiring sophisticated tools to manage them effectively. This new breed of retailers is intensely competitive and constantly looking for cost and marketing advantages to secure their market position.
Some of the complexities facing retailers today demand a command of the following disciplines:
- Marketing – Sophisticated reporting systems have elevated the ability to forecast demand, measure customer buying pattern changes, brand awareness and customer loyalty, and help build brand value. Each retailer now operates through more than one channel, (retail, e-commerce, catalog, direct marketing) requiring that the decisions made for each channel are highly strategic.
- Supply Chain Management/Logistics – Today there are tools available to help retailers secure significant cost advantages throughout the supply chain while simultaneously improving customer service. This gives retailers significant competitive advantages.
- Merchandise Management – Advanced technologies are now required to source merchandise for product development, assortment planning, SKU rationalization, customer knowledge, trend analysis, and inventory and category management. The most important part is using these technological advances to increase profitability.
- Finance – This function has quickly progressed from recording history to active involvement in creating value through analytics and is now vital in allowing a retailer to compete for capital against all other industries.
- Legal – Our society has become more litigious making larger businesses more of an attractive target. The complexity of new regulations has resulted in an increase in legal staff. A retail leader is now required to be more involved and responsible for setting the tone of legal strategies.
- Human Resources – Once considered just a major expense, Human Resources managed effectively must now create differentiation versus competition. A company’s culture and devotion to the customer are now more important than ever.
- Information Technology – In the past, technology seemed to be the sole domain of the IT department. With advanced POS systems, the retailer has learned the power of information and no longer relies solely on market information provided by the vendor. Leading edge IT departments now interrelate with the entire organization by providing useful information to aid in decision making, control costs, forecast, and analyze. Companies are now operating enterprise-wide systems and the CEO must know the capabilities of these systems to ensure the company gains a competitive edge.
- Global Reach –The days when retailers only operated stores in the U. S. with product only secured from U. S. sources are gone. The implications of the global activities are enormous.
Forward-looking retailers who saw the need for talented executives brought highly educated executives into the retail industry. In the late 60s and 70s the retail industry started recruiting top students from colleges and graduates from MBA programs. The top leaders at that time were: Jewel Tea, Federated Department Stores, J.C. Penney Co, Sears Roebuck & Company, Kroger, The Dayton Hudson Corporation, and The May Department Stores Company. Those recruiting programs have produced many of the CEOs of today’s successful retailers.
For those looking to progress up the ladder in retail, the data indicates that the career path from bagperson to CEO is no longer viable, nor practical. Retailers striving to be successful must compete for the best educated. And future leaders in retail must strive to educate themselves and that education must include minimally the rigors of earning a bachelor’s degree. Earning an MBA and/or a JD degree greatly improves one’s chances. This is not because one needs a degree to punch up a resume; rather it is the intellectual tools gained through formal education combined with on-the-job training that prepares an executive for the rigorous and evolving challenges facing retailers today.
While the 2002 study indicated no particular school had the lead in producing future CEOs, the current research indicates that a new trend is starting to develop. Harvard University has taken the leadership position having five CEOs with undergraduate degrees and five with MBA degrees. Second is The University of Pennsylvania’s Wharton School of Business with three CEOs holding an undergraduate degree. Columbia University and the Kellogg School of Management at Northwestern University are tied with three CEOs each holding MBA degrees. The University of Illinois has three CEOs with undergraduate degrees.
It is clear the retail industry needs to compete in the market place to bring the brightest talent with superior intellectual tools and education to manage the business for the future.