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J.C. Penney’s CEO to Receive Pay Jump

Stock awards lift Myron E. "Mike" Ullman's 2010 package, but not up to 2008 level.

J.C. Penney Co. Inc. chief executive officer Myron E. “Mike” Ullman 3rd rode his firm’s higher sales and profits to a nearly 50 percent increase in his 2010 pay package.

According to a preliminary proxy statement filed late Monday with the Securities and Exchange Commission, Ullman’s total pay came to $13.1 million last year, 49.2 percent above the $8.8 million he earned in 2009 but 13.9 percent below his 2008 package.

His salary was unchanged at $1.5 million and his nonequity incentive plan compensation declined 27.5 percent to $2.6 million from $3.5 million, putting the cash portion of his earnings at $4.1 million, 19.3 percent below the prior-year level.

But Ullman, who’s served as chairman and ceo of Penney since 2004, saw the sum of his stock and option awards more than double to $8 million from $2.9 million in 2009 and also recorded a 65.8 percent increase in the category of “change in pension value and non-qualified deferred compensation earnings,” to $8.1 million, as well as a 37.9 percent decline in other compensation, to $238,000.

Because of fluctuating stock prices and vesting schedules, stock and option awards aren’t necessarily realized by the named executive officer, but companies are required to include them in compensation tables when submitting proxies to the SEC.

Ullman’s compensation reflects the achievement of individual goals as well as such criteria as the company’s operating profits and sales versus plan. At $17.76 billion, sales fell short of the goal of $18.02 billion, while operating profit, at $836 million, exceeded the goal of $814 million. Earnings per share excluding special items came in at $1.73, shy of the $1.86 figure, which would have triggered a maximum payout, but ahead of the $1.53 target.

The proxy noted that Ullman, 64, has neither an employment contract nor an executive termination pay agreement, but that the firm’s “independent directors recognized Mr. Ullman’s strong leadership and clear articulation of the company’s vision. In addition, the determinations of the independent directors reflected their strong desire to retain Mr. Ullman’s services in the future, as well as his willingness to continue to lead the company as it emerges from the difficult economic environment.”