This story is going to place a smile on those who crib about the ever rising CEO pay, despite a gloomy market and a poor performance of many business across the globe.
A leading American Retailer, J C Penney has reduced its CEO’s compensation by over 96 % for the year 2012. This has been observed from the regulatory filings by J C Penney for the year 2012. Ron Johnson had joined as the company’s CEO in November 2011. Before joining J C Penney, he worked as Apple Inc.’s senior vice president of retail for 11 years. He is credited to have pioneered the tech giants highly successful retail stores.
For 2011, Johnson had received a base salary of $375,000 and $52.7 million in stock awards, taking his compensation to a whopping $ 53 million. In 2012, his salary was reduced to $1.5 million, and no bonuses or stock awards were awarded. Other components of compensation including personal use of corporate aircraft, security system for his residence, etc. adds up about another $ 400,000 to his compensation, taking it to a total of $ 1.9 million. Another fact to be noted is that in 2011, his compensation was for a period of 2 months, while most of the stock awards were as a joining bonus and in lieu of the stock options he lost while leaving Apple.
Along with Johnson, his former Apple colleagues Michael W. Kramer had joined Chief Operating Officer, and Daniel Walker had joined the company as Chief Talent Officer. As a result of poor business performance their compensation has also taken a hit for the year 2012. While Kramer got roughly $1 million in 2012, from $33.4 million he received as compensation and stocks in 2011, Walker received $731,385 for 2012 from $20.2 million in 2011. The 2011 compensation for all these executives include stocks.
None of the top executives of the company received any bonuses for the year 2012. Over the last year, the company’s stock prices have come down by over 60 % as most of the turn around strategies have failed to revive the company’s fortunes. J C Penney, runs over 1000 retail outlets across America. It has also an ecommerce presence through jcp.com