Nordstrom, Inc.

Nordstrom, Inc. is a fashion retail chain, with 187 stores in the United States. The retail stores sell clothing, shoes, cosmetics, and accessories. The company includes 112 full-line stores, 72 “Nordstrom Rack” stores, which are discount stores, two “Jeffrey” boutiques, and one clearance store called “Last Chance.” Within these locations, the company also has restaurants and spas. Since 2005, the company’s gross profit, meaning its total sales less the cost of those sales, rose a mere 3.4%. Its net sales, the gross sales less returns, discounts, and allowances, have likewise increased very minimally since 2005-- only 7%. These small increases in profit and sales ultimately caused the company’s net earnings, meaning it’s gross sales less taxes, interest, depreciation, and other expenses, to decrease by 20% since 2005.

Luckily for the executives, however, the company’s substantial decrease in net earnings over the last four years has not upset their personal earnings. Blake W. Nordstrom, the company’s Director and President, saw his total yearly income increase by 73.5% from 2007 to 2009. Though his base salary increased only .3% during this time, the amount he received from performance based-bonuses increased by a whopping 207%.

Michael G. Koppel, an Executive Vice President and Chief Financial Officer for the company, saw a similar trend in his personal earnings. While his base salary increased only 1.6% from 2007 to 2009, the amount of money received from performance-based bonuses increased 222%. Overall, Koppel made 118% more money in 2009 than he did in 2007, despite the company’s decrease in earnings.