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Penney CEO gets no bonus, stock award after dismal year

J.C. Penney Chief Executive Ron Johnson testifies in New York state Supreme Court in Manhattan March 1, 2013. REUTERS/Thomas Iannaccone/Pool
J.C. Penney Chief Executive Ron Johnson testifies in New York state Supreme Court in Manhattan March 1, 2013. REUTERS/Thomas Iannaccone/Pool

By Phil Wahba

(Reuters) - J.C. Penney Co Inc Chief Executive Ron Johnson received total compensation of $1.9 million in 2012, according to a regulatory filing on Tuesday, a sharp decline after a year that saw the department store chain's sales fall perilously.

Johnson, who oversaw the development of Apple Inc's retail business before becoming Penney's CEO in late 2011, unveiled a plan last year to reinvent the 111-year-old retailer. The plan included the elimination of most discounting, a move that contributed to a 25 percent drop in sales last year.

Johnson's base salary was unchanged at $1.5 million, but he received no bonus or stock award in 2012 because of Penney's results, Penney said in its filing. He was eligible in 2012 for a bonus of $1.875 million.

Last year, his total compensation included a stock award worth $52.7 million to make up for incentives he was giving up by leaving Apple.

Johnson's 2012 compensation included $344,213 for personal use of a corporate jet. Johnson commutes to Penney's Plano, Texas, headquarters every week from his home in California. That amount is similar to the personal use of a corporate jet by Johnson's predecessor Myron Ullman in 2011.

A source told Reuters in April that, after a disastrous first year for Johnson's turnaround, the executive might only have a few more months to carry out his vision of turning Penney stores into emporia offering trendy but low-price items.

If Johnson quits or is fired, he will not get a golden parachute. He would only receive $5,000 and restricted stock worth $106,424 as part of a package worth $148,924 in all, according to a proxy statement filed with the U.S. Securities and Exchange Commission.

In his annual letter to stockholders, Penney Chairman Thomas Engibous limited himself to inviting them to Penney's annual meeting in Plano on May 17, in contrast to a seven-paragraph note last year touting Johnson's turnaround plan.

Penney's board renominated all 11 of its current directors for another one-year term, choosing not to fill a spot vacated by the death in August of longtime board member Burl Osborne.

None of Penney's executive officers got any 2012 cash bonuses. Former Penney President Michael Francis, who left in June after only 9 months with the company, was given a termination fee of $3.6 million.

Penney shares slid 44 percent in 2012 and have fallen 26 percent so far in 2013.

(Reporting by Phil Wahba and Dhanya Skariachan in New York; Editing by Bernard Orr and Andre Grenon)

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