J.C. Penney Co. Inc.’s (NYSE: JCP) Myron E. (Mike) Ullman just got a huge boost in pay after spending a year trying to right the sinking retailer’s ship. Whether he deserves the pay hike is arguable after a really lackluster performance that probably would have gotten a chief executive at any place other the J.C. Penney fired.
According to a filing with the U.S. Securities and Exchange Commission (SEC), Ullman’s base salary for 2014 will be $1.5 million and his target incentive award for the year is 200% of his base salary. He also will receive $5.5 million in stock, half in performance-contingent stock and the other half in performance-based restricted stock units.
In 2013 Ullman’s base salary was more than $810,000, and he earned another $1.6 million in other compensation, including some $913,000 in the personal use of corporate aircraft, according to a report at MarketWatch.
To justify the new pay scale, Ullman has lifted J.C. Penney’s sales microscopically, borrowed enough cash to keep the company afloat for this year and reached a deal with Martha Stewart Omnimedia Inc. (NYSE: MSO). The company says its same-store sales will improve this year by some percentage in the mid-single-digits. Given that sales were down in the low double-digits last year, this is hardly a reason to nearly double the CEO’s salary and offer performance-based incentives and stock options when the performance metrics are so easy to beat.
Ullman should have held out for a deal like the one Time Warner Cable Inc. (NYSE: TWC) CEO Robert Marcus got. Marcus stands to get a payout of $80 million if the merger with Comcast Corp. (NASDAQ: CMCSA) is completed. Marcus has been CEO since January 1. To be fair, about half that is due to immediate vesting of restricted stock and other options he received before he became CEO.
J.C. Penney’s shareholders who appear willing to cheer anything bid up the stock in the premarket Monday morning. Shares were trading at $8.65, in a 52-week range of $4.90 to $19.63.