J.C. Penney Slashes Pay Of Its Chief
J.C Penney has had a rough year. They had roughly $13 billion in sales for fiscal 2012, which is minuscule when compared to its competitors. Therefore J.C Penney has lowered the pay roll of the newly hired chief executive, Ron Johnson. His pay has been cut roughly 97 percent. Along with Mr. Johnson, many people he has hired also received pay cuts. For example Michael W. Kramer, who was hired by Mr. Johnson to be the chief operating officer has received around $33.4 million in 2011. Michael W. Kramer in 2012 has earned around $1 million. Compare this to veteran executives such as Janet L. Dhillon, the general counsel, received $3.7 million in 2011, and $2.7 million in 2012. Although they are earning smaller paychecks, the change is nowhere near as dramatic when compared to Mr. Johnson and his newly hired employees.
I think J.C. Penney is doing the right thing by paying salaries based on performance. If the company is doing terrible, the executives and others in power shouldn’t be reaping high rewards and benefits. This is why no top executives in 2012 have received bonuses or incentive awards.