Good morning, and thank you for joining us for the Target Corporation twenty twenty Annual Meeting of Shareholders. I'm Brian Cornell, Chairman of the Board and CEO of Target Corporation. Joining me on the line are Don Liu, our Chief Legal and Risk Officer and Corporate Secretary, as well as Katie Boylan, our Chief Communications Officer. Also in attendance are our Board of Directors, members of our leadership team, and Ray Sullivan from Ernst and Young, Target's independent registered public accounting firm. To begin, I'll point out that we've adapted this meeting to a virtual format out of respect for the safety of both you and our team in the era of COVID-nineteen.
And our content has also been affected by the circumstances. Normally, I would provide a detailed overview of our company's strategy and performance. It's a story that is widely known and readily available at this point, if you've listened to our earnings call and financial community meetings. But somehow, that doesn't feel like the right story for this moment. So once Don conducts the necessary business of the meeting, I'll spend a few minutes reflecting on where our company stands during this pivotal time for our country.
After that, we'll address shareholder questions that were submitted both in advance of the meeting and during the proceedings. If you're a shareholder and have logged into the meeting with your control number, you may ask a question by typing into the box at the bottom of the screen. And with that, I'll turn
to Don to take us through the business portion of the meeting. Thank you, Brian. As a reminder, any forward looking statements we make today are subject to risks and uncertainties, the most important of which are described in our SEC filings. With that, let's turn to the proposals for today's meeting presented in our proxy statement. I'd like to report the notice requirements for this meeting have been satisfied.
The independent inspector of elections is the Corridio Group. A representative from the Corridio Group is present by phone at this meeting and has reported that we have received proxies representing a substantial majority of our outstanding shares. Therefore, we have a quorum for this meeting. The polls for voting on all matters are open at this time. Any shareholders who did not vote by proxy and want to vote or who want to revoke a proxy previously given, please do so now using the vote here icon on your screen.
If you previously voted by proxy, you do not need to vote today unless you wish to change your vote. This year, shareholders were asked to consider and vote on four management proposals. All proposals are described in our proxy statement, and the Board of Directors recommends a vote in favor of each of the director nominees and for each of the other three proposals. Mister chairman, I move for the approval of the following resolutions for the management proposals. One, to elect each of our current board members nominated for reelection in our proxy statement to serve a new one year term.
Under the governing documents, they will serve until a successor is elected and qualified. Two, to ratify the appointment of Ernst and Young as the independent registered public accounting firm for the company's 2020 fiscal year. Three, to approve on an advisory basis Target's executive compensation. And finally, to approve the Target Corporation 2020 long term incentive plan.
Thank you, Don. The polls are now closed on items one through four. The company has already received proxies sufficient to elect all director nominees and approve the other three management proposals. Final results of the vote on all proposals will be announced when they're available. Now, I'd like to share some reflections on our company during a painful and defining moment for our country.
As a team, we wake up every day determined to help all families. On the hardest days, we embrace that purpose even more strongly. For our communities and our country, most days this year have been hard. For years now, retail companies have been tested. The public has demanded more from us.
And in the last several months, COVID put most retail models, including ours, to a dramatic test. The public also has high expectations for the value shown, not just by companies, but by communities. And the deep pain of racism and brutality, unleashed most recently by the killings of George Floyd, Breonna Taylor, and Ahmaud Arbery, demands that people and companies of goodwill act on our values. I'd like to start there. This company's purpose is to help all families discover the joy of everyday life.
That is an inherently inclusive aspiration. Optimism, inclusivity, connection, inspiration, and drive are the values we live by. And if those words are too soft for some, I will state this very clearly. Our company is forward thinking, anti racist, compassionate, and open to any perspective that can help us all advance. I was sickened to see George Floyd struggling beneath that policeman's knee, in part because I know that many of our black team members and many more of our guests have had their own experiences being stopped by police.
And they live with intense fears of how quickly those stops can escalate into something like we saw in that video. As I've sat and listened to African American leaders at Target, I've come to understand, in too many cases, the offense was being black. As a team, we've vowed to face this pain with purpose. To support each other. To stand in solidarity with black families.
And to support our communities. We're bringing our values. We're bringing our resources. And our ambition is to help the country stabilize in the short term and engage in genuine healing over time. That ambition is inseparable from our strengths as a company.
And here are a few examples of what I mean. Target merchants and distribution teams are known experts at sourcing essential products and moving them to where they're needed, like medicine, food, bottled water, first aid, and baby care items. We're doing that now to those areas heavily damaged during recent protests. As an employer, we stand by our team. We take care of each other.
Team safety is always a priority. And for the teams we've moved out of harm's way in recent days, we're providing full pay and benefits, as well as access to other resources and opportunities within our company. Our Lake Street store in Minneapolis sits at one of the most vibrant crossroads of culture in our hometown. That store has been a community resource since 1976. The extent of damage there means we're looking for other ways to support the neighborhood in the meantime.
But we will rebuild that store and bring it back online as soon as possible, likely before year's end. After we made that announcement a few days ago, here's what we saw. Our neighbors in the community organizing a grassroots cleanup effort to prepare the way for a new day. And as protests spread beyond the Twin Cities to areas like Philadelphia and New York City, local residents banded together to protect their target from damage. We couldn't be more appreciative.
As you can imagine, there's been an outpouring of volunteerism from our team as they've gone into damaged neighborhoods to help clean up, participated in community donation efforts, and more. In addition, we're dedicating 10,000,000 half from corporate giving and half from our foundation, towards Twin City rapid response needs, local rebuilding efforts, and national social justice initiatives. But we also understand that injustice, inequality, and brutality call out for long term answers and for coalitions much broader than our team alone. So we're putting together our influence to work in our hometown and in the country, bringing together our team, our neighbors, our businesses, and community partners. Together, we're identifying what more we can do and what resources are needed to help all families move forward to brighter days.
Anyone aligned with these values might wonder whether we can really follow through. After all, these are long term problems requiring new approaches, agility, and investment. Well, this is where I see a correlation to our experience with the pandemic. The world had no playbook for COVID nineteen. We are all writing it in real time.
The pandemic brought abrupt changes for US consumers, and our teams have been able to shift, seemingly in an instant. But if I step back, it's clear that our ability to act and react has actually been years in the making. A few years ago, the path forward for traditional retailers was anything but clear. It was another situation without a playbook. So we began to write our own.
We've shared this story in multiple ways over the years, and I won't replay it now. But here's how I've seen it play out in the turmoil of recent weeks. With big swings in our guests' needs, as they secured food and household essentials, and then supplies and technology to work and learn from home, and then items to keep their families safe, entertained, and engaged under quarantine or curfews. The investments we've made in our multi category portfolio proved to be absolutely vital. Such rapid shifts dramatically tested the very heart of our playbook, namely our Stores as Hub strategy.
Consumers turned to our stores early in the COVID crisis, lining up before the doors were open many mornings. Later, they switched to digital in droves as stay at home orders went into effect and officials said limit your time out in public. With stores at the center of our strategy and a well trained, nimble team, we were able to pivot immediately when our guests' routines changed. Such changes caused short term pressure that, fortunately, we're able to withstand, thanks to our strong balance sheet and resilient business model. And as our country moves ahead, our years long focus on value will be more important than ever as the economy cycles through high unemployment and our guests grow more budget conscious.
Most important, in the middle of the most intensely volatile and stressful environment of my lifetime, Our team has been more purposeful and passionate than ever about being there for our guests. Throughout the crisis, they've stepped up in remarkable ways to be a resource for all, providing a sense of calm and a point of continuity that we can build on for years to come. I really couldn't be more thankful to them or more humbled to represent their efforts here today. So if I could leave you with one thought, it would be this. The Target team will keep applying our values, our resources, our talent, and skills towards the comfort and care of our guests and communities in good times and bad.
Our guests have seen us play a crucial role in their lives. They know how quickly we can adjust when the world around us changes. Although it's hard to see it now, I believe the changes we're experiencing will ultimately be for the better. And we know Target has a role to play. In the most challenging circumstances I hope any of us will ever see, our team continues to foster connection, to offer compassion.
And because of them and what their efforts mean to our guests and communities, I believe that brighter, more inclusive, more joyful days lie ahead. Thank you. Now, I'd like to turn it over to Katie Boylan, our Chief Communications Officer, who will facilitate the Q and A session of this meeting. We're going to pause briefly to gather the questions that have been submitted by shareholders.
Good morning, Brian. We've received some questions about our commitment to reach a starting wage of $15 nationwide by the end of this year. This question in particular pertains to whether we've been also raising pay for team members who are already making more than our starting wage. Shareholders want to know whether those more experienced team members have also seen pay raises as we've increased our starting wage.
Well, thanks, Katie, and good morning. I'll ask Melissa Kramer, our Chief Human Resource Officer, to provide more detail on team member pay in a moment. But I want to start with a big thank you to our team and to express our ongoing commitment to that team. I've said numerous times, at Target, our team is our biggest point of difference. What's more, the action I've seen our team take over the past few months to help our guests, to take care of each other and to be flexible and agile in this rapidly changing environment has been nothing short of extraordinary.
I know I speak on behalf of our entire leadership team and our Board in saying just how proud we are of each and every one of them. Melissa, you want to add on from there?
Sure. Thanks, Brian. Good morning. I'll start by summarizing the investments we've made to support our team throughout the pandemic as they've been on the front lines of doing the essential work of meeting our guests' needs every day. These investment decisions were made with our purpose at the center and really meant to help all of our team members care for themselves and their families during this time.
We committed $500,000,000 to our team member health and safety, which included most notably a $2 an hour temporary wage increase for all of our frontline team members, thirty day pay leave for our most vulnerable team members, free backup care, bonus payouts for 20,000 of our hourly store team leads, as well as personal protective equipment and several other in store safety measures. Early on, we also responded by waiving our absenteeism policy and offering both quarantine and confirmed illness pay. And then finally, we made a $1,000,000 donation to our team member giving fund, which was our largest single contribution in our company's history. As it relates specifically to the shareholders' question on hourly rates, we remain incredibly committed to reaching our permanent strong wage of $15 an hour by the end of twenty twenty. Additionally, I would say that we continue to invest at all wage levels.
This includes market competitive wage rates across the country, our annual pay and performance program, which is really focused on differentiated wage based on performance, and then a new annual bonus for our hourly team leaders who are typically our higher paid hourly team members. I would just close by saying we know that our team is our greatest asset. And so in addition to wage, we do so much more to invest in our team by helping them grow their careers, take care of themselves and their families, and also give back to the communities where they both live and work.
Thank you, Melissa and Brian. We've also received questions about our recent announcements regarding a temporary $2 hourly pay increase for all of our hourly team members in distribution centers and stores through July 4. Shareholders want to know the expected duration of the temporary pay increase. They also asked whether we have announced a similar pay increase for the salaried managerial positions in the stores and distribution centers.
Melissa, would you like to handle those questions?
Sure. You know, of all, Brian, I think it's important to acknowledge that our hourly team members are on the front lines every single day ensuring our guests are well taken care of. I know I can speak confidently for all of us when I say how grateful I am for everything the team has done to support our guests and importantly support one another during this time of crisis. In my role, I'm a beneficiary of so many of our team member and leader stories and really have been touched by the spirit of resilience, compassion, and the genuine pride our team has in playing such an important role in helping the families that we serve every day. I I just summarized the investments we've made in the Target team and that we'll continue to evaluate if we determine how best to support our team during this really unprecedented time.
The $2 an hour wage increase was designed to acknowledge and support the really critical work of our frontline team members. We've extended it twice since introducing it in March and then also paid out bonuses ranging anywhere from $250 to $1,500 to our 20,000 distribution team managers and our hourly store team leads. Beyond our hourly team members, our entire team has really been a force for good the last several months. Our store and our distribution center leaders have worked tirelessly taking care of our guests and their teams. As a way to say thank you for their resiliency and their leadership, we will be recognizing those who worked between March 8 and June 27 with a one time performance award this summer.
And then finally, across the board, that $500,000,000 commitment extended support to our team members broadly By way of example, our free backup care is available to all, and our 30 paid vulnerable leave is offered to anyone who's aged 65 and older, pregnant, or who has an underlying medical condition per the CDC. So again, I really want to thank the entire team for the way they've shown up with such purpose and really such pride during this important time.
Thank you, Melissa. Brian, our next question pertains to minority representation on both our Board and within store management.
Thanks, Katie. As I said in my opening remarks, at Target, we embrace diversity, and we hold inclusivity as one of our core company values. We've been long focused on building diverse teams, not because it's the right thing to do, but because it's a business imperative. It creates a competitive advantage and it's been a personal priority for me. I believe now more than ever, we need diverse perspectives, experiences and backgrounds to help our company continue to advance and serve guests across the country.
Our statistics across the company tell a story of a company making progress. The current Board is about 1 female and just under 50% racially and ethically diverse. Our target leadership team is more than 40% female and a quarter racially and ethically diverse. Approximately 30% of our stores are run by a racially or ethnically diverse leader, and almost half are run by women. One half of our U.
S. Based team is racially or ethnically diverse. But our goal is not to hit a number or check a box. We know a number is not good enough. This is an area where we'll continually focus and strive to do even better.
Brian, we have a question about our announcement in late March that we would slow down the strategic initiatives we had planned for this year. The shareholder is asking why we made that decision and when we plan to have our efforts back on track.
Thanks, Katie. I know if you talk to John Mulligan, our Chief Operating Officer or Arthur Valdez, who leads our global supply chain or Mark Cheadell, who runs our stores, they tell you just how humbling it's been to see our teams across the country do such an incredible job of keeping Target's supply chain operating and our stores open so that our guests could get what they need. But to support the team, we had to minimize potential disruptions so they could focus on serving our guests. To do that, we adjust the timing of several of our 2020 strategic initiatives, including our planned remodels, our new small format openings and the introduction of fresh grocery and adult beverage pickup services. In 2020, we've already shared that we'll do approximately 130 remodels, a reduction from the initial plan of 300.
The work on those stores is now mostly complete. We will now open about 15 to 20 new small format stores instead of the 36 we had previously scheduled this year. Our small formats help us reach even more neighborhoods where a traditional Target would not fit, and we've opened up 100 overall. We also temporarily paused the integration of fresh refrigerated and frozen items into our pickup and drive up capabilities. I'm pleased to share that we recently resumed the test with select assortment of grocery items, including fresh and frozen staples like eggs, milk and essentials into our pickup capabilities across Midwest, including The Twin Cities and Kansas City.
And we've seen a great guest response. We'll continue to expand the pace of that rollout and are committed to expanding this capability to as many stores as possible this year. In Florida, we're currently piloting adult beverage pickup in over 80 stores and we'll continue to accelerate those initiatives.
All right. For our next question, we have a shareholder asking about the potential for a stock split for Target. They'd like to note that we have not done one in twenty years.
Well, this sounds like a great question for our CFO, Michael Fidelke. Michael?
Thanks, Brian, and good morning, everyone. Thanks for
the question. Stock splits used to
be a much more common practice when technology made it more expensive or in some cases even impossible for individual investors to purchase a small number of shares. So splitting shares was necessary to make them more accessible to those individual investors. Today, with advances in technology, individual investors no longer face the same constraints. The recent stock splits have become much less necessary and therefore much less common. As such, we're not currently planning to initiate a split of Target stock, but we'll revisit this issue periodically in the future.
Thank you, Michael. Brian, we've had a couple of questions about the damage done to some of our stores following recent protest activity. Shareholders want to know whether we are committed to rebuilding and reopening all of those stores and whether the cost of the damage might be covered by insurance. Perhaps you could also talk about Target's response to the unrest in communities in Minneapolis and across the country.
Thanks, Katie. I'll start with how we're feeling about this difficult time for our country and what we're doing to help Black families, communities and team members for whom injustice has been part of their everyday lives. I hope I made it clear in my opening remarks. Target stands against racism. Last week, we announced several initiatives to help create lasting social change and fuel rebuilding and recovery efforts.
We committed $10,000,000 to a growing list of long standing partner organizations and ten thousand hours of pro bono consulting services to help black and other people of color who own small businesses in the Twin Cities rebuild. We're committed to an ongoing conversation with our communities and nonprofit partners to understand what more we can do going forward. Now I'll turn to our shareholder question about the impact of our stores from recent events. Over the last couple of weeks, we've had to temporarily close hundreds of stores and reduce hours in others due to our continued focus on team member safety. I am very happy to say that all of our store team members have remained safe during this period of unrest.
Beyond those temporary closures, which are largely behind us, we have seven stores that sustained significant property damage. Four of those stores are expected to reopen by the end of this month. The other three will remain closed until we can repair the damage. The most significant damage occurred in our store in Minneapolis, which we will rebuild and reopen as soon as we can, which is hopefully by the end of this year. And as I mentioned in my remarks, we've taken other steps to provide the needed food and supplies to the neighborhood in the meantime.
But I want to make sure it's really clear. We're committed to rebuilding and reopening all of these stores as soon as we can. Michael, do you want to handle the question about insurance?
Sure, Ryan. Across the broad set of risks that we consider when we're planning our business, we rely on a combination of both self insurance and party coverage, including property insurance. In the case of these stores, we're really in the early stages stages of assessing the damage. So it's too early to comment on the expected costs and any potential recoveries from insurance.
All right. Thank you so much, Brian and Michael. Brian, we've also received a question about the process the Board of Directors uses to nominate new directors.
Don, Lou, why don't you take that one?
Thanks, Brian. The governance committee of our board identifies individuals who are qualified to become board members and makes recommendations to the full board. That committee sometimes uses a search firm to identify candidates and also considers recommendations from shareholders and other constituents. Please note that all of our directors are elected annually under a majority voting standard, meaning in order to be elected, each director in an uncontested election must receive more votes for than votes against. An incumbent director who is not elected must promptly offer to resign.
We approach board composition with a focus on broad and diverse backgrounds, experience, and knowledge. In identifying candidates, we look for skills that would support Target's business strategy and operating environment. We also take into account the future needs of the Board in light of anticipated director retirements. We believe that Target has a well balanced, diverse and independent Board providing a mix of fresh perspectives and institutional knowledge, both of which are essential for Target's business. Finally, we're also committed to governance practices that protect shareholder rights and promote accountability.
All right. Thank you, Don. Brian, our final question has been submitted by shareholder Erin Epstein. Erin is asking about our target tech team members who assist our guests in the electronics department of our stores. These team members are employed by another company.
And Erin is asking if the protections that Target has put in place to keep our store teams safe also apply to these team members. Finally, he also hopes for a day when we can go back to in person meetings or that we could use video technology for these future virtual meetings. Brian?
Erin, good morning. It's really good to hear from you, and I hope you and your family are well. I join you in sharing the fact that I really hope that in the future, can gather in person. But like many companies, we've been evaluating ways to operate in this virtual environment and we appreciate your suggestion to incorporate video in the future. I'll ask John to talk about some of the details about how we've operated in this environment and the focus we put on safety.
But I just want to remind you, Erin, that and for everyone else on the call, during this pandemic, we have put the safety of our teams and guests as our priority from the very beginning. And that applies to our partners in stores such as the Target Tech team. John, I'll let you take it from there.
Well, good morning and thanks, Brian. And I'll start by echoing a couple of your comments. hi, Erin, and I also look forward to speaking live once again soon. And I hope that you will be shopping our new Hollywood store, which we are very excited we'll finally be opening in this October. The thing I'd echo is since this pandemic began, our focus has ensuring we're creating a safe environment for the guests who continue to turn to Target, as well as for all of our frontline teams and everyone else in our stores that are helping us fulfill an essential service in communities across the country.
We've introduced dozens of safety measures and social distancing practices that are there for all of our team members in the stores and are also there for our partners like Target Tech, as you mentioned, as well as ship shoppers and all the partners who provide direct store deliveries and stock shelves for some of our products. These include providing high quality disposable face masks and gloves to wear at work, and encouraging healthy hygiene habits as guided by the CDC. We've installed plexiglass partitions at the check lanes, in the front of the stores, in the electronics area, at service desks, at the CVS Pharmacy, and at Target Optical. And we're monitoring and meeting guest traffic in stores to promote social distancing. And finally, we've introduced much more rigorous cleaning routines.
So as Brian said, we're extremely proud of the work our team has done to create a safe environment for our guests, our team and everyone else assisting us in the store during the pandemic.
John, thank you. So that concludes our Target twenty twenty shareholder meeting. I thank all of you for joining us today. And I hope all of you stay safe and well, and we look forward to seeing you in future years. So thank you.