CEO Pay Cut 98 Percent

For something approaching a hundred years J. C. Penney was a familiar name in discount merchandising.  Sam Walton started his career at J. C. Penney.  Quality products at reasonable prices was a theme that kept customers happy.  Penney's didn't stay in business selling Louis Voitton suits or Cuisinart kitchen appliances. A practical guy could call up the local clothier and order several pair of pants with nothing more than his waist and inseam size because he had been buying the same brand since his first job as a manager trainee just out of college.  Dad had ordered pants from the Penney's catalog.

In the new millennium Penney's stores were familiar landmarks in shopping malls from sea to shining sea, but the executives running the empire apparently longed to distinguish themselves from the middle class morality of their customers.  In 2007, the company launched a new website with private and exclusive brands, as developed by Ralph Lauren, across several product lines, including men's, women's, and children's apparel and shoes, intimate apparel, and home funishings. The launch was accompanied by an ad campaign during the 2008 Academy Awards.  This was not your mom's J. C. Penney store anymore... .

When Ellen DeGeneres, once long ago a J. C. Penney employee, became the chain's spokesperson in a tour and advertising campaign in Spring 2012, it elicited a backlash from One Million Moms, an arm of the conservative American Family Association.  Who could have imagined!

Who should have known?  Well, some assemblage of the board must have thought, when they hired Ron Johnson who had ridden the crest of the wave at Apple, that this hot-shot CEO would turn things around.  Who could be smarter than this guy?  Johnson was paid 53 million for the first two months of his regime beginning in 2011.

The NY Times noted this week that:

"Since Mr. Johnson arrived in late 2011, J. C. Penney has wrestled with one problem after another. Mr. Johnson did away with discount sales, but revived them when it turned out customers liked sales. He proposed a three-tiered pricing strategy that he abandoned when customers were confused. He revamped the company’s advertising strategy to focus on lifestyle, not prices, but backtracked when it turned out customers wanted the ads to tell them how much items cost."

Couldn't several thousand managers with MBAs and marketing degrees have pushed back against this counterproductive nonsense?  They have evidently, finally.
J. C. Penney Slashes Pay of its Chief
It gets worse: J.C. Penney Ousts Chief of 17 Months