JCPenney’s (NYSE: JCP) former chief executive, Myron E. Ullman, III, was pushed out of the company. As a reward for an awful performance in his job, the the retailer’s board gave him a parting gift of $34,561,322 in salary, stock, stock options and “other compensation.” A portion of the payout was a $10,100,000 transition services payment. That is a staggering amount for a CEO who failed shareholders so badly. It is yet another reason that investors are skeptical about how boards treat their managements.
In 2007, JCPenney had revenue of $19.9 billion and net income of $1.13 billion. In 2011, revenue was down to $17.8 billion, and the retailer had net income of $389 million. Over that period, the value of the retailer’s shares dropped more than 55%.
Who should be blamed for keeping Ullman for so long? The board should, particularly those members who have served for more than five years. This includes Colleen C. Barrett , who was CEO of Southwest Air (NYSE: LUV); Thomas J. Engibous, former CEO of Texas Instruments (NASDAQ: TXN) and the new chairman of JCPenney; Leonard H. Roberts, the former CEO of RadioShack (NYSE: RSH); and Kent B. Foster, the former head of Ingram Micro (NYSE: IM). Each has done shareholders a huge disservice and shown again why JCPenney is a second-rate operation.
Douglas A. McIntyre
Sponsored: Want to Retire Early? Here’s a Great First Step
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
