Target Reveals Severance Terms for Ousted Legal Chief Amy Tu
In a recent SEC filing, retail giant Target Corporation has disclosed the generous severance package for its former Chief Legal and Compliance Officer, Amy Tu, amid the company’s ongoing restructuring efforts. The agreement, which includes $3 million in payments over two years and a strict non-compete clause, highlights the high stakes of executive transitions in the competitive retail sector.
The Departure: From DEI Advocate to Exit
Amy Tu stepped down from her role as Executive Vice President and Chief Legal & Compliance Officer on May 21, 2025, with her employment officially ending on June 1, 2025, due to an involuntary termination without cause. Hired just nine months earlier from Tyson Foods Inc. in July 2024, Tu was tasked with overseeing legal affairs, compliance, and corporate governance during a turbulent period for Target.
Her ouster coincides with broader executive changes, including the dismissal of Chief Strategy and Growth Officer A. Christina Hennington, both of whom were vocal supporters of the company’s diversity, equity, and inclusion (DEI) initiatives. Target cited the establishment of a new “enterprise acceleration office” to boost efficiency, with HR head Melissa Kremer temporarily overseeing legal functions while a search for Tu’s replacement proceeds.
Tu’s tenure was marked by her advocacy for DEI, shaped by early-career discrimination experiences, and her role in initiatives like the $2 billion program for Black-owned businesses. The NAACP’s Legal Defense Fund urged Target to reconsider scaling back DEI efforts following these departures.
Severance Details: $3 Million Payout and Restrictions
Target filed the details of Tu’s severance with the Securities and Exchange Commission last week, revealing a comprehensive package under the company’s Income Continuation Plan (ICP). Despite her last active day being June 1, 2025, Tu will receive approximately $3 million in “income continuation payments” through mid-2027, equivalent to 24 months of salary continuation.
Additional benefits include vesting of a portion of her long-term incentives, outplacement services, and coverage under Target’s benefit plans during the payout period. Her original compensation package exceeded $10.5 million, including a $2.6 million sign-on bonus, $7.2 million in stock awards, and relocation assistance where Target purchased and sold her Arkansas home at a fixed price. Tu currently holds $3.8 million in Target stock.
In exchange, Tu agreed to a 24-month non-compete clause, barring her from working for any Target competitor. She also committed to post-employment obligations like confidentiality, non-disparagement, non-solicitation, and cooperation with the company on legal matters, including notifying Target’s Chief Human Resources Officer of any new employment. The agreement includes a release of claims against Target, waiving rights to sue for issues like back pay or discrimination.
Background on Target’s Challenges and Executive Shifts
Target has faced headwinds including financial pressures, backlash against DEI programs, and operational inefficiencies, prompting a reevaluation of its leadership structure. Tu replaced retiring legal chief Don Liu, who had streamlined outside counsel using DEI metrics alongside efficiency and risk factors. The company eliminated the general counsel position over a year ago, with Matthew Zabel transitioning to chief corporate affairs officer.
This isn’t Target’s first high-profile severance; past CEOs like Gregg Steinhafel received multimillion-dollar packages amid crises such as the 2013 data breach. Tu’s deal aligns with the ICP, which provides two times base salary plus average bonuses for qualifying terminations.
Expert Opinions and Public Reactions
Legal experts view the package as standard for C-suite executives but note its generosity amid Target’s struggles. “Severance like this protects the executive while ensuring non-disclosure and non-compete to safeguard company interests,” said a corporate law analyst, emphasizing the 24-month restrictions as unusually long but common in retail to prevent talent poaching.
Public reactions on social media and forums have been mixed, with some criticizing the payout as excessive during economic uncertainty. “Paying millions to an ousted exec while cutting DEI—priorities seem off,” one X user posted, reflecting broader debates on corporate equity. Advocacy groups like the NAACP highlighted concerns over DEI rollbacks, potentially linking Tu’s exit to shifting corporate priorities.
Compensation consultants praise the structure for balancing retention of talent with risk mitigation, though some question if it incentivizes short-term leadership stability.
Impact on U.S. Readers: Economy, Politics, and Retail Landscape
For American consumers and investors, this disclosure sheds light on executive compensation in retail, a sector employing millions and facing inflation and supply chain woes. The $3 million payout, while substantial, pales against Tu’s potential $8 million eligibility under change-in-control provisions, underscoring how such deals can influence stock performance—Target shares have fluctuated amid restructuring news.
Politically, it fuels discussions on DEI in corporate America, especially post-2024 elections, with critics arguing such terminations signal a retreat from equity initiatives amid conservative pushback. Economically, it highlights wealth disparities: While Tu receives ongoing payments, average retail workers might see minimal severance, exacerbating income inequality debates.
Lifestyle impacts include potential shifts in Target’s legal strategies affecting product safety, pricing, and consumer protections. Technologically, stronger compliance oversight could enhance data privacy post-past breaches. In sports and entertainment, Target’s sponsorships (e.g., MLB, NBA) remain stable, but executive turnover might indirectly influence marketing budgets for fan events.
Conclusion: A Costly Transition for Target’s Future
Target’s revelation of Amy Tu’s severance terms—$3 million over 24 months with binding restrictions—caps a swift exit for the former legal chief, tied to the retailer’s efficiency drive and DEI reevaluation. This filing not only settles her claims but also signals Target’s commitment to structured separations for top talent.
Looking ahead, the external search for a new CLO could reshape governance amid ongoing challenges. For U.S. stakeholders, it prompts reflection on executive pay fairness and corporate priorities, potentially influencing investor confidence and policy on workplace equity as Target navigates recovery.