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Myron Ullman Gets $15M Exit Package

J.C. Penney chief to hand over the reins to Ron Johnson in February.

Mike Ullman

Myron E. “Mike” Ullman 3rd, the chief executive officer at J.C. Penney Co. Inc. who is set to hand over the reins to Apple retail guru Ron Johnson in February, is leaving the retailer with a stock and cash package worth more than $15 million.

As part of a transition services agreement inked Monday, Ullman will help the company make the switch to Johnson’s leadership and, in return, receive a restricted stock award valued at $5 million and a lump sum cash payment of $10.1 million. Ullman will also receive a cash payment equal to the fair value of the unvested stock options Ullman would have otherwise had to forfeit as of his retirement. That payment could total millions of dollars.

Ullman, who will also step down as chairman, will receive his current salary — which works out to $1.5 million annually — through his retirement and will receive his incentive compensation for the 2011 fiscal year, payable at the target amount of $1.9 million.

The ceo also agreed to not compete with the company for an 18-month period following his departure.

It’s been a year of serious change for the department store, which in October found out that activist investor William Ackman had taken a 16.5 percent stake in the company and planned to press for changes. The store instituted a poison pill that prevented the investor from upping his stake, but relaxed those restrictions this month, giving Ackman the OK to build a 26.1 percent stake in the firm as long as he agreed to a reduction in his voting rights.

Ackman, who is now on the firm’s board, played a role in bringing Johnson to the company. Johnson will begin to oversee the merchandising and marketing functions at Penney’s in November, while Ullman will have responsibility for all other business areas.