Marvin Ellison, the incoming president and chief executive officer designee of J.C. Penney Co. Inc., will receive an annual base salary of $1.3 million, according to a regulatory filing with the Securities and Exchange Commission.
Ellison will also be entitled to receive other bonuses, such as a $4.1 million sign-on bonus. Starting in 2015 — Ellison starts at Penney’s Nov. 1 — he will be eligible to participate in the retailer’s performance-based annual bonus program. His target bonus opportunity will be 150 percent of his current base salary, or a range of nearly $2 million for fiscal 2015, with a maximum bonus opportunity of 300 percent of his current base salary, or a range of $3.9 million.
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He is also eligible to receive a $25,000 reimbursement for legal fees connected with the negotiation of terms of his employment at Penney’s, as well as restricted stock valued at $15 million.
Ellison’s current base salary at Home Depot is $718,000, according to a definitive proxy on file with the SEC. The proxy statement also listed his total compensation in 2013 at nearly $4.4 million, which includes a base salary of $713,846, stock awards totaling $1.8 million, and $891,659 in option awards.
In comparison, Myron “Mike” Ullman, III, the current and former ceo of the troubled midtier department store, earned $2.4 million after his return to Penney’s as ceo in April 2013. The sum included $811,000 for the prorated portion of his $1 million in annual salary and other compensation of $1.6 million, including $913,000 in personal use of corporate aircraft, making that perk larger than his collective paychecks, according to the proxy statement filed with the SEC earlier this year.
Ullman’s base salary was raised to $1.5 million in a subsequent SEC filing this year. In addition, after forgoing eligibility for stock and option rewards and a cash bonus in 2013 as the company faced a rapid cash burn and an uphill battle to turn itself around, this year Ullman will be eligible for a cash bonus of up to twice his salary and equity awards of up to $5.5 million, making his potential pay package $10 million.
Neither Ellison nor Ullman has employment contracts at Penney’s. In Ellison’s letter agreement outlining the terms of his employment, he is allowed to continue service as a board member of FedEx Corp.