Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Business News

JCPenney CEO’s pay is cut 96% as sales slump

Despite some inspirational moves to bring JCPenney into modernity, sales and stocks are under-performing, leaving the CEO with a massive pay cut for 2012.

jcpenney

jcpenney

Fire lit under JCPenney CEO

Traditionally, when a company is slumping in performance, some incentive may be offered to the executives to turn the ship around, but JCPenney CEO Ron Johnson was handed a 96 percent pay cut in 2012 in response to poor stock prices and continually depleting sales. Johnson was a former executive at Apple and rebranded JCPenney, experimenting with low price guarantees in lieu of coupons (and sales slid, as JCPenney’s demographic apparently enjoyed the tradition of coupon clipping – a lot), and announcing self checkout stands in stores and other innovative yet risky moves to rebrand.

According to the Wall Street Journal, Johnson earned $1.5 million last year, with an additional $389,000 in stock awards. But just the year prior, he took home $50 million in stock awards to make up for what he walked away from at Apple, representing a 96 percent pay cut.

Stocks and sales plummeting

The steep cuts are in response to stocks dropping by over 50 percent in 2012 and sales dropping 25 percent despite remodeling stores, bringing in boutique-like features and free standing stores (like Sephora) to the center of their stores. Meanwhile, the company remains in legal gridlock over their right to sell Martha Stewart products in their store, which a judge will soon rule for or against the possibility that the partnership violates an existing agreement between Macy’s and Martha Stewart. The battle has blemished the company’s reputation rather then building it by the possibility of working with Stewart.

The bottom line, however, is that when sales and stocks slip, it matters not how much innovation or creativity a leader brings to a legacy brand. Retail is cut-throat competitive, and competitors are improving as the old JCPenney brand flails to join the 21st century – no matter how hard their consumers fight it. Johnson could still turn it around, and we hope he does, but in the meantime, look for the scaling back and ramping up of various JCPenney features as they adjust.

Advertisement. Scroll to continue reading.

The American Genius is news, insights, tools, and inspiration for business owners and professionals. AG condenses information on technology, business, social media, startups, economics and more, so you don’t have to.

1 Comment

1 Comment

  1. rolandestrada

    April 9, 2013 at 12:34 am

    Well I have a big helping of crow to eat, along with generous side of claim chowder (see John Gruber). I was wrong about Ron Johnson being able to turn things around. You can lead a horse (JC Penney) to water but you can’t make him drink.

Leave a Reply

Your email address will not be published.

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Advertisement

KEEP READING!

Tech News

(TECHNOLOGY) The Metaverse has been the talk of the town for quite some time now, but how it will affect retail as we know...

Business News

(NEWS) Toys R Us is opening their newest store complete with a 2-story slide and ice cream parlor, as well as an exclusive partnership...

Business Marketing

(CUSTOMER SERVICE) Times are changing in the retail environment: a once customer-service driven experience is evolving into a minimalistic customer service approach.

Business Finance

(BUSINESS FINANCE) U.S. retail sales aren't coming back as many had expected, as the nation braces for wintertime with COVID-19.

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.