Myron “Mike” Ullman 3rd, chairman and chief executive officer of J.C Penney Co. Inc., will be eligible for as much as $25 million in company stock grants under a supplemental performance bonus plan approved by independent directors of the retailer.

This story first appeared in the December 17, 2008 issue of WWD.  Subscribe Today.

According to a filing with the Securities and Exchange Commission on Tuesday, Ullman can receive up to 500,000 Penney’s shares, with a target of 300,000, based on the performance of the firm’s stock over a three-year period. He is eligible for 200,000 shares if their annual return hits 11.3 percent, 300,000 if they reach the target level of 17.9 percent, 400,000 shares for a return of 23.3 percent and 500,000 shares if they return 29.1 percent or more. Return is appreciation based on the assumption of reinvestment of all dividends on the date paid.

The plan began Dec. 15 and has a cap of $25 million. Should the value of the grant exceed that amount, the number of shares would be reduced accordingly.

Ullman, who doesn’t have an employment contract, received $8 million in total compensation during fiscal 2008 and $10.4 million in fiscal 2007.

“The purpose of the grant is to provide an incentive for performance during the current economic environment and to recognize Mr. Ullman’s willingness to continue his service to the company,” Penney’s said in a Form 8-K filed with the SEC.

Penney’s shares closed up 69 cents, or 3.5 percent, at $20.27. Their 52-week high, reached Feb. 8, was $51.42.