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JCPenney’s Shameless Board Rewards Departing CEO

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By Douglas A. McIntyre Published
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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

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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