At a Glance

  • Macy's disclosed in a securities filing that it is clawing back over $600,000 in bonuses after a previously reported $151 million accounting error inflated executive compensation.
  • The New York-based department store chain tied executive cash bonuses to metrics such as adjusted 2023 EBITDA; given the $151 million correction, that year's EBITDA was overstated by more than $81 million, which reduced the company's overall payout rate under its 2023 Short-Term Incentive (STI) plan from 60.47% of target to 51.59%. As a result, the company issued $609,613 in "erroneously awarded compensation," according to a filing with the U.S. Securities and Exchange Commission (SEC) on Tuesday.
  • In a separate filing on Tuesday, Macy's also announced sweeping leadership changes, appointing Thomas Edwards, currently CFO and COO of Capri Holdings' luxury group, as its next CFO and COO, as previously reported by CFO Dive. Edwards will succeed Macy's CFO and COO Adrian Mitchell on June 22, according to a press release.

Deep Dive

The bonus clawback and leadership changes come more than four months after Macy's reported that an employee intentionally made "erroneous accounting accrual entries" that concealed over $100 million in delivery expenses from the fourth quarter of 2021 through the quarter ending November 2, 2024, according to a company press release.

In December, Macy's said an independent investigation showed the $151 million error had "no material impact on any historical annual or interim financial results" and that it would take steps to ensure such errors do not recur. At the same time, the company also concluded that "historical consolidated financial statements affected by these misstatements should be revised to properly reflect delivery expenses, related accruals, and tax impacts," according to Tuesday's filing.

The bonus clawback is based on profit figures that were inflated due to the accounting error; this means "it's not strictly punitive—it's recovering overpayments," said David Swartz, senior equity analyst at Morningstar.

"I'm still unclear whether this issue is related to Macy's CFO change," Swartz told CFO Dive via email. "The misstatement is clearly embarrassing, but I think if the CFO were primarily responsible, he would have been fired months ago."

Experts remain divided on whether Macy's decision to replace its finance chief is linked to the $151 million error; in earlier comments to CFO Dive, Swartz noted that if Mitchell were to "take responsibility for the mistake," his departure might have occurred sooner.

Others are less certain. Ed Ketz, associate professor of accounting at Penn State University, told CFO Dive that Macy's board may have faced pressure to make a change, and if Mitchell had left earlier, the retailer would have "effectively admitted fault."

The erroneously awarded compensation was paid in April 2024 to "covered executives," with an outstanding total of $609,613 as of the end of its 2024 fiscal year. As of April 1, 2025, the outstanding total was $352,093. The company will "seek to recover the remaining erroneously awarded compensation from covered executives" in fiscal 2025 under its clawback policy, according to Tuesday's filing.

According to the company's 2023 full-year proxy statement, Mitchell, as CFO and COO, received $742,036 in non-equity incentive compensation that year, with total compensation of $7.8 million.

In 2024, Mitchell received approximately $1.2 million in non-equity incentive compensation, bringing his total compensation to $5.5 million, according to Macy's latest proxy statement filed Tuesday.

Macy's declined to comment.