JCPenney Co. Inc. (Plano, Texas), coming off a tumultuous year, cut the pay of ceo Ron Johnson by 97 percent for 2012. The board of directors also voted not to give any top executives a cash bonus.
Johnson was paid $1.9 million for the year, according to a regulatory filing reported in The New York Times. Also, the newspaper reported, analysts believe Johnson will be given “at least another couple of quarters” to turn the department store organization around.
The filing reported that Johnson earned $53.3 million in total compensation for the two months in 2011 that he served as JCPenney’s ceo after being hired away from Apple Inc. (Cupertino, Calif.). In 2012, target cash compensation was to be $3.375 million. However, his total compensation was reduced to a $1.5 million salary, with no stock awards and no bonus. He was given about $345,000 for personal use of a corporate aircraft, $30,000 for a home security system and $3,000 for information technology services.
For Johnson’s first full year on the job, JCPenney lost more than $4 billion in sales and its stock price is less than half what it was in June 2011, when his appointment was announced in June 2011. It had $13 billion in sales, well below its competitors Macy’s and Kohl’s.
Furthermore, JCPenney has been involved in a highly publicized court case with Macy’s involving the Martha Stewart brand of home goods. Johnson contracted with Stewart’s company to establish her brand shops in its new, expanded home sections. Macy’s claims it has an exclusive contract with the brand.