Department store operator J.C. Penney Co.'s Chairman and Chief Executive, Myron E. Ullman III, received compensation worth $12.3 million in 2010, a 48 percent increase from 2009, as the company's revenue and market share rose, according to an analysis by The Associated Press.
Ullman, 64, received a base salary of $1.5 million and a performance-based cash bonus of $2.56 million in the fiscal year that ended Jan. 29, according to a filing by the company made with the Securities and Exchange Commission late Tuesday.
But the bulk of Ullman's compensation came in the form of stock awards valued at almost $6.4 million when they were granted, which quadrupled from $1.28 million in 2009. He also received stock options valued at $1.59 million, virtually the same as 2009. His other compensation, worth $237,937, included personal use of corporate aircraft and home security systems.
In 2009, Ullman, who has been CEO and chairman since 2004, received compensation worth $8.29 million.
Like many department stores, J.C. Penney faced a slump in sales during the recession, but the company has worked hard under Ullman's leadership to turn around by expanding its offerings exclusive merchandise that differentiates it from competitors and by cutting costs. It closed some stores, outlets and call centers, and it will soon finish closing its catalog business.
Last fall, Penney became the only U.S. retailer selling the Liz Claiborne and Claiborne women's wear brands (the Liz Claiborne New York brand went to QVC). Penney's also is the only department store selling MG by Mango, a European brand.
For the latest fiscal year, J.C. Penney reported its net income rose 55 percent to $389 million from $251 million in fiscal 2009, and its revenue rose 1.2 percent to $17.75 billion.
For the year, the key revenue measure of revenue at stores open at least a year rose 2.5 percent. The figure is considered a key indicator of a retailer's health because it excludes stores that recently opened or closed.
The Associated Press formula calculates an executive's total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive's stock and option awards for 2010 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company's stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.