Executive Compensation

Ron Johnson's Pay Cut, By the (Ugly) Numbers


Ron Johnson, chief executive officer of J.C. Penney Co., arrives at State Supreme court in New York, Mar. 1, 2013

Photograph by Jin Lee/Bloomberg

Ron Johnson, chief executive officer of J.C. Penney Co., arrives at State Supreme court in New York, Mar. 1, 2013

Ron Johnson, chief executive officer of J.C. Penney (JCP), saw his 2012 compensation fall 97 percent, as the retailer continues to struggle with his turnaround plan.

That sounds like a lot. But Johnson’s cash salary remained unchanged, as the compensation cuts disclosed on April 2 came entirely from stock and bonuses awarded to help lure the executive from Apple (AAPL), where he had led retail operations. Here are some other notable stats around Johnson’s tenure at the retailer:

• 0 percent: change in Johnson’s cash salary, from $375,000 in one quarter of 2011 to $1.5 million in 2012
• 25 percent: decline in revenue during the company’s last fiscal year, to $13 billion
• 51 percent: decline in J.C. Penney’s market capitalization over the same period
• 54.7 percent: decline in J.C. Penney’s stock price since Nov. 1, 2011, when Johnson started
• 43 percent: decline in the value of Pershing Square Capital Management’s J.C. Penney stake during 2012, equivalent to about $585 million. Pershing’s chief, Bill Ackman, recruited Johnson from Apple
• 100 percent: the pay cut for 21,200 J.C. Penney employees who lost their jobs in the last year. (This could be as high as 43,000, depending on whether you believe the company’s line about seasonal hires.)

Summers_190
Nick Summers covers Wall Street and finance for Bloomberg Businessweek. Twitter: @nicksummers.

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Companies Mentioned

  • JCP
    (JC Penney Co Inc)
    • $8.82 USD
    • 0.09
    • 0.96%
  • AAPL
    (Apple Inc)
    • $95.69 USD
    • 0.66
    • 0.68%
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