By  on April 6, 2007

Terry Lundgren, chairman, president and chief executive officer of Federated De­partment Stores, earned $15.6 million in total pay last year, while his rival, Myron "Mike" Ullman 3rd, chairman and ceo of J.C. Penney, earned a total of $10.4 million in 2006.

The two retailers revealed their top executives' pay packages in filings Thursday with the Securities and Exchange Com­mission. Meanwhile, AnnTaylor Stores Corp. said it paid Kay Krill, president, ceo and director, $11.7 million last year.

The filings were more detailed than ever, thanks to new SEC rules that required companies to show the executive compensation of c-level managers in "plain language." The filings also revealed why a company's stock price is so important to a ceo: The bulk of his or her annual pay is garnered from stock options. Of the total $37.7 million paid to Lundgren, Ullman and Krill last year, $33.8 million was made up of stock awards, options and other long-term payouts.

Lundgren had no bonus last year, and a base salary of $1.4 million. In 2005, his base salary was listed as $1.3 million, and he was given a $2.1 million bonus.

The SEC is not requiring companies to recalculate prior years' pay tables in the new plain-language format. At a recent Roth Capital Partners investor conference, analysts from law firm Paul, Hastings, Janofsky & Walker and accounting firm Grant Thornton said the new SEC rules were aimed at making executive and director pay transparent. It's important to note that the compensation listed in proxies could include options and stock awards that are from prior years.

Ullman's base salary was $1.5 million. In 2005, his "total compensation" was listed at $4.6 million, with a $1.5 million base salary and $2.7 million bonus. The bulk of his 2006 pay was made up of stock options and awards.

At Ann Taylor, Krill's base salary was $1 million, and she was not awarded a bonus. In 2005, her base salary was $966,417. She received no bonus that year.

In J.C. Penney's proxy, the retailer said one of its shareholders, the Trowel Trades S&P 500 Index Fund, "intends to submit a resolution at the annual meeting…that the shareholders of [the company] urge the board of directors to seek shareholder approval of future severance agreements with senior executives that provide benefits in an amount exceeding 2.99 times the sum of the executives' base salaries plus bonus.""In our opinion, severance agreements as described in this resolution, commonly known as 'golden parachutes,' are excessive in light of the high levels of compensation enjoyed by senior executives at the company and U.S. corporations in general," the shareholder said in a statement.

Penney's board opposes the proposal, saying that it "understands the concern that exists today regarding high levels of executive compensation and severance payments. However, the board believes that the severance arrangements that J.C. Penney has in place are narrowly tailored and that this proposal would unduly hinder the company's ability to recruit and retain qualified executives by restricting the use of an important compensation tool."

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