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Bloomberg reports that the Ron Johnson tenure at JC Penney cost the company more than $170 million just to hire him and his top three executives. The story says that "the sum covers cash payments and restricted stock offerings to the four executives and outgoing Chief Executive Officer Myron Ullman -- and doesn't include salary or incentive pay, according to public filings.

"Now after less than a year and a half, Johnson and his trio are gone..."

According to the piece, "Johnson's hiring cost J.C. Penney the most. He received $52.7 million in restricted stock in November 2011 to make up for what he had to leave at Apple while Ullman earned $29 million when he left. The board then swapped Ullman for Johnson and gave him a salary of $1 million a year. The company hasn't disclosed Johnson's exit pay."

Here's one example of the kind of executive spending that took place:

"The recruitment of marketing chief Michael Francis is emblematic of what J.C. Penney was willing to spent to attract talent. Francis helped cultivate the 'cheap chic' brand of discounter Target, where he worked with Johnson in the 1990s. To lure him from Target, J.C. Penney gave Francis $12 million in cash and $32 million in restricted stock in November 2011.

"Francis was named president and given the responsibility to lead the overhaul of the company's marketing. The chain unveiled a new logo, television spokeswoman Ellen DeGeneres and themed monthly catalogs. Even as J.C. Penney poured money into brand advertising, sales fell. Francis was fired in June, and Johnson took over his responsibilities.

"Thanks to a termination agreement, Francis received $4.3 million on his way out. So in about eight months, J.C. Penney spent $16 million in cash on hiring and firing Francis, who in December was named chief global brand officer for DreamWorks Animation SKG Inc. Because he left before the restricted stock vested, he kept about 100,000 of the 1 million shares he was granted, the filings show.

"Meanwhile, the company cut its workforce by more than 40,000 people during Johnson's tenure."
KC's View:
I was a Ron Johnson fan, but it is hard to argue that his brief tenure at JCP was anything but a total debacle. BTW ... the Huffington Post has a piece talking about how Johnson's "mercurial pricing strategy" and vacillation on strategy and tactics created enormous morale problems at JCP ... a piece you can read here.

It is hard to understand how these guys are making this much money for not getting it done. And it is hard to understand how the American business climate has allowed - even encouraged - this to happen. People have a right to make whatever they can, but this is insane. It isn't about growing a business. It is about growing a checking account, or a few checking accounts. And it seems increasingly unsustainable.