He replaces Gregg Steinhafel, who was fired in May.
Cornell sports a long list of executive credentials, including brief stints as CEO of PepsiCo Foods, Sam's Club and Michael's Stores, as well as chief marketing officer of
But choosing an outsider comes at a price for Target. Along with up to $15 million in salary and stock incentives, the company will pay as much as $20 million in make-whole payments for stock and bonus money Cornell will lose by leaving PepsiCo.
Steinhafel was paid $23 million last year.
Cornell's selection drew a mixed reaction. Target shares lost almost 3 percent Thursday, along with the broader stock market, which fell sharply. Target closed at $59.59.
Retail consultant Carol Spieckerman said Target continues to add executives from outside the company: Its new chief information security officer came from General Motors; its new chief information officer worked at First Data and
"They are determined to bust out of their insular past and stop insisting on growing their own talent," Spieckerman said.
"They're willing to shake things up and bring in new blood and perspective," she said.
"You could say they're actually doing a hard correction from the Steinhafel years."
Most analysts expected an outsider would replace Steinhafel -- a Target lifer -- after a grim year that included a massive consumer data breach, huge losses in its Canadian rollout and an uneven financial performance.
But the culture shift still raised eyebrows.
"I think he's got really broad retail experience, so that's a plus," David Brennan, a University of St. Thomas retailing specialist in Minneapolis, said of Cornell. "But by the number of companies he's been with, that seems uncharacteristic for Target."
Cornell joined Safeway in 2004, Michael's in 2007, Sam's Club in 2009, PepsiCo in 2012 and now Target in 2014.
"He's 55, and the question I would have is: How many more places does he plan to go before retirement?" Brennan asked. "Or is Target his last jump?"
Daniel Binder, a financial analyst at Jeffries, wrote in a research note, "Some investors may have been hoping for an executive with more experience in Canada and e-commerce and a deeper home/apparel merchandising background, but our impression of Mr. Cornell during his time at Sam's Club was that he was a strong leader that produced results from his team."
In an interview posted on Target's corporate blog, Cornell underscored his admiration for the Target brand and its people, calling it "iconic."
In retail circles, he said, "Target has been viewed as an academy company with some of the best and brightest in retail."
Despite some struggles, Target remains Minnesota's highest-profile corporation. It has $73 billion a year in sales, is a huge employer in the Twin Cities and an influential corporate citizen known for its philanthropy, design sensibility and community support -- including Target Field and Target Center.
The company's roots go back to the Dayton's retailing family, which in 1962 veered from its department store heritage to experiment with a discount chain. After decades of impressive growth, the entire company renamed itself Target Corp. and sold off its department stores.
Yet these days, there is a sense that something isn't working at Target, including a corporate culture that even its executives concede has become ingrown, stifling to innovation, slow and bureaucratic.