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JC Penney's board of directors, clearly dissatisfied with the direction of the retailer, yesterday announced that its CEO, Ron Johnson, is having his pay cut by 97 percent for 2012. In addition, senior executives with the company are being denied their annual cash bonuses for 2012.

Johnson probably won;t be in need of financial assistance, however. Even with the reduction, he still had a total compensation packager of $1.9 million.

According to the New York Times, "Mr. Johnson had earned $53.3 million in total compensation in 2011 for the two months he served as chief executive. Most of the compensation was in stock to replace the stock he left behind at Apple, his former employer. In 2012, his total compensation was reduced to a $1.5 million salary, with no stock awards and no bonus. He was given about $345,000 for personal use of a corporate aircraft, $30,000 for a home security system, and $3,000 for information technology services, for a total of about $1.9 million."

Since taking over at JC Penney, Johnson has made significant changes, mostly keyed to the elimination of the retailer's promotion-and-sale driven approach to marketing in favor of an EDLP strategy. The problem has been that JC Penny's customers reacted by staying away in droves, causing traffic, sales and profits to plummet. Sales were down $4 billion in 2012, and the company's stock price is down more than 50 percent since Johnson signed on.

The Times writes that "analysts generally say they believe that Mr. Johnson will be given at least another couple of quarters to turn around the company he was hired a little more than a year ago to revive."
KC's View:
Seems entirely appropriate to me that these executives suffer pay and bonus cuts, considering how poorly JCP has been doing. It would have been a crime if any of them got a bonus.

I still think that Johnson - a guy who I think had the right idea, if a lousy execution - won't last that long. If there is no evidence of progress, they're going to have to make a change. Though I have to wonder if anything is going to save JCP at this point.