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Home > JC Penney President Mike Francis Came, Saw, Collected $10 Million, And Quit Nine Months Later

JC Penney President Mike Francis Came,

Saw, Collected $10 Million, And Quit NineMonths Later

By Tyler Durden

Created 06/18/2012 - 16:54

[1]Submitted by Tyler Durden [1] on 06/18/2012 16:54 -0400

After Hours [2] JC Penney [3] None [4] Proxy Statement [5] Whitney Tilson [6]

If anyone is wondering why the darling stock of Bill Ackman and Whitney Tilson, for whom everycollapse of JCP is a buying gift from god, namely JCPenney, is plunging after hours, it is becausethe company's president, Michael Francis, hired October 4, 2011, has just quit. To wit [7]: "J. C.Penney Company, Inc. ("jcpenney") (JCP) today announced that Michael Francis will be leavingthe Company, effective today. Chief Executive Officer Ron Johnson will assume directresponsibility and oversight of the company's marketing and merchandising functions." And tothink that just 9 months ago the company CEO Ron Johnson announced, that "I am thrilled towelcome Michael to our team... He is an extremely talented executive with the vision and

courage to re-imagine the department store experience. His ability to innovate and deepunderstanding of the industry will be invaluable as we set out to transform J.C. Penneyinto America's favorite store." And while his ability to do anything else appears to have been adud, his ability to read the fine print in his contract, especially where it talks about his perks, wassecond to none. Because despite leaving just 9 months after his hiring, Francis is entitled tocollect a whopping $9 million in pro-rated signing bonus (alongside $100,000/month insalary): all in all - a tidy package of $10 million for shooting the breeze while observing asinking retail ship. Not bad for a company whose stock has just plunged to September 2010levels.

From the firm's proxy statement [8]:

Michael R. Francis. Mr. Franciss offer letter, dated October 3, 2011, provided forthe following:

Base salary of $1,200,000Participation in our Management Incentive Compensation Program, with atarget bonus equal to 100% of base salary, with a maximum bonus equal to200% of base salary (prorated for 2011)

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With such generous shareholders, is it any wonder the stock has collapsed on the news? That,and of course the stamp of disapproval that the now former President has given the firm.

Here is the stock probing fresh 52 week lows.

An inducement equity award of 1,000,000 RSUs granted on November 16,2011

One-third of the RSUs will vest on November 16, 2015, November 16,2016 and November 16, 2017 as long as Mr. Francis remainscontinuously employed by usRSUs will pro rata vest if Mr. Francis is terminated by us withoutcause prior to vestingRSUs will fully vest if, within two years of a change in control, hisemployment is terminated other than for cause or if he terminates hisemployment for good reason

A sign-on cash bonus of $12,000,000Mr. Francis must reimburse us for a prorated portion of thebonus if he voluntarily terminates his employment for anyreasonother than death or disability or if we terminate hisemployment for causeprior to October 4, 2012

Participation in our 2011 Change in Control PlanParticipation in certain perquisites and benefits as an executive officer ofthe Company

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