Penney details the transition to a new CEO
June 22, 2011 09:17 AM
Just one week after naming Apple Inc.’s highest-ranking retail manager as its next CEO, J.C. Penney Co. Inc. is releasing more details on when Ron Johnson will be joining the company—and how much he’ll be paid.
On June 14, J.C. Penney, No. 20 in the Internet Retailer Top 500 Guide, named Johnson, Apple’s senior vice president of retail, as CEO to replace Myron Ullman, who remains as executive chairman.
When Johnson joins J.C. Penney on Nov. 1, he will report to Ullman. But effective Aug. 1 Johnson also joins the J.C. Penney board of directors. He will be paid a base salary of $1.5 million annually and is eligible for a performance bonus of 125% of his yearly salary, or about $1.875 million, the retailer says.
Johnson also will not have a formal employee agreement with the company, J.C. Penney says in a new regulatory filing. “Mr. Johnson and the company have not entered into an employment agreement,” the retailer says. “There are no arrangements or understandings between Mr. Johnson and any other person pursuant to which he was elected as an executive officer of the company.” But Johnson will spend about $50 million of his own money to acquire about 7.25 million shares of Penney stock “as a demonstration of his confidence in J.C. Penney’s long-term potential,” the retailer says in the filing.
Johnson has worked for the past 11 years at Apple. Prior to Apple, he spent 15 years at Target Corp., No. 22 in the Top 500 Guide, where he was a merchandising executive. His responsibilities there included such product categories as men and women’s apparel, children’s items and home.
At Apple, according to the company’s fiscal 2011 proxy statement filed with the U.S. Securities and Exchange Commission in January, Johnson had total compensation of $29.8 million, including a base salary of $700,014 and stock options worth $28.3 million.