JCPenney CEO Hit With Massive Pay Cut

by Christopher Freeburn | April 3, 2013 11:30 am

JCPenney CEO Hit With Massive Pay Cut

JC Penny 1 300x199 JCPenney CEO Hit With Massive Pay Cut[1]JCPenney‘s (NYSE:JCP[2]) foundering turnaround is hitting the wallet[3] of its CEO Ron Johnson.

The former Apple (NASDAQ:AAPL[4]) executive, who was hired to reverse the struggling retailer’s fortunes, was given $53.3 million in compensation in 2011. Last year, he received just a salary of just $1.5 million and $344,000 in air travel benefits, Reuters noted.

However, $52.7 million of Johnson’s 2011 compensation was in the form of stock awards, which were meant to offset compensation he would have received from Apple had he remained at the iPhone-maker.

Still, Johnson was not granted any new stock awards last year. Or a bonus. That’s because, under Johnson’s leadership, the chain has suffered staggering losses[5]. In fact, no cash bonuses were awarded to any of the firm’s current top executives.

A plan to substitute “everyday low prices” for frequent sales bombed with shoppers, leading JCPenney to post a 25% decline in sales for 2012. The chain has hastily moved back to promoting sales again[6].

The poor results have prompted speculation that JCPenney’s board might soon show Johnson the door[7]. In the event that he is ousted as CEO, Johnson is eligible for a severance package worth $148,924.

Last month, the chain announced that it would lay off another 2,200 workers.[8]

Shares of JCPenney rose fractionally in Wednesday morning trading.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/05/JC-Penny-1.jpg
  2. JCP: http://studio-5.financialcontent.com/investplace/quote?Symbol=JCP
  3. hitting the wallet: http://www.reuters.com/article/2013/04/02/us-jcpenney-proxy-idUSBRE9310YR20130402
  4. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  5. has suffered staggering losses: http://investorplace.com/2013/02/j-c-penney-shares-plummet-after-disastrous-q4/
  6. moved back to promoting sales again: http://investorplace.com/2013/01/j-c-penney-brings-back-sales-to-win-back-customers/
  7. might soon show Johnson the door: http://investorplace.com/2013/03/jcp-ceo-has-no-plans-to-leave-company/
  8. lay off another 2,200 workers.: http://investorplace.com/2013/03/struggling-jcpenney-lays-off-2200-workers/

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