NEW YORK, N.Y. – J.C. Penney’s reinstalled CEO Mike Ullman is poised to get a big pay increase as the department store chain shows some signs of a turnaround.
J.C. Penney Co. could increase Ullman’s base salary to $1.5 million for this year, from $810,606 in the fiscal year that ended Feb. 1, according to a Securities and Exchange Commission filing Monday. He could also get $5.5 million in stock awards and is eligible to receive a $3 million bonus.
That potential for a $10 million payout compares with last year’s $2.4 million in compensation, according to a regulatory filing Friday. That included $1.6 million in perks.
Ullman had been CEO for seven years until late 2011 — when he earned total compensation of $33.7 million. He returned to the helm in April 2013 when the company’s board ousted Ron Johnson, who had spearheaded a transformation strategy that involved eliminating most discounts and bringing in hip new brands. The goal was to bring in younger and more affluent shoppers, but the former Apple executive ended up alienating the J.C. Penney’s loyal shoppers. Sales plunged and led to big losses, and Johnson was ousted after 17 months.
Since rejoining the department store chain, Ullman has restored frequent sales events and brought back basic merchandise. J.C. Penney earned $35 million for the quarter that ended on Feb. 1, compared with a loss of $552 million the year before.
The Plano, Texas-based company expects improvements in a key measure, revenue at stores open at least a year. In the holiday quarter, that rose 2 per cent. Penney expects a gain of 3 to 5 per cent in the current period.
But the company still has a lot of work to do to turn its business around. It lost $1.39 billion last year and revenue dropped nearly 9 per cent to $11.86 billion as Johnson’s legacy continued to cast a shadow on its results.
Shares of Penney rose 11 cents to close at $8.60 Monday. Shares have been on an upswing since late February, but are still down 6 per cent in 2014. The stock has lost 80 per cent of its value since February 2012, when investor enthusiasm was high over Johnson’s transformation plan.
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