When longtime Target Corp. (NYSE: TGT) CEO Bob Ulrich retires soon, he'll leave behind a very impressive legacy. Target, the second-largest discount retailer in the U.S., has grown alongside its larger competitor Wal-Mart Stores, Inc. (NYSE: WMT). While Wal-Mart was opening stores and increasing sales at a blistering pace, Target was no slouch. Even though Wal-Mart grew much faster, Target's strategy worked pretty darn effectively, too.

Target seemed to beat Wal-Mart to the punch on the trends many customers cared about: brand-name clothing, hip marketing, clean and bright stores and very effective marketing and merchandising of its own store-brand product lines. While Wal-Mart became the generic big-box store, Target seemed to be the store shoppers flocked to to stay away from Wal-Mart's lifeless marketing, boring stores and grand-central-station customer traffic. In other words, price isn't everything to every U.S. retailer customer.

Now that Ulrich is retiring, his longtime company sidekick Gregg Steinhafel will be taking over with some lingering challenges that will put him on the hot seat almost immediately. Target is suffering, along with other retailers, from a seemingly-persistent economic slump and from the performance of its credit-card business (which is being hit with defaults due to consumer credit problems nationwide). Although things can be rosy at Target, they aren't for all of its customers at this time. With rising energy prices and the spike in food staple prices recently, Target's store brands like Archer Farms may suffer or need to be priced at the level of brand names -- and then they may lose their appeal to consumers looking for quality alternatives to higher-priced brand names. Steinhafel will have his plate full as he takes over when Ulrich turns 65 --Target's mandated retirement age for the CEO position.

In a world of pay-for-performance, Target Corporation's(NYSE:TGT) CEO, Robert J. Ulrich, received a compensation package valued at $36.4 million last year, according to the company. Target's overall performance in 2006 was very admirable indeed, as the company continually stole the earnings and profit spotlight from larger competitor Wal-Mart Stores, Inc.(NYSE:WMT) and was a retail marketplace darling.

Ulrich's compensation included $1.6 million in salary and more than $6 million in bonuses -- roughly the same as 2005. All in all, though, what did TGT shares do in 2006? Let's see:

Looks like TGT started the year at about $55 and ended the year at about $57. Not much movement there except for a large mid-year dip. Still, Ulrich received stock awards valued at $16.6 million and options valued at $8.56 million in 2006. Stock awards are a great pay-for-performance motivator, since they can become worthless or can be worth quite a bit. Over the last few years, Target has done quite well in outperforming retailer in its peer group, though.

As a comparison, an investment of $100 in Target stock in 2002 would be worth $148 today, compared with $123 in its peer group companies and $141 in the S&P index.