After a tumultuous tenure, Ron Johnson is out as J.C. Penney's CEO.
The troubled department-store chain announced late Monday that Johnson is stepping down and leaving the company after just a year and a half. He is being replaced by his predecessor, Mike Ullman, who led the company for seven years prior to Johnson's arrival.
J.C. Penney said in a securities filing Monday that Johnson's departure "is not the result of any disagreement with the Company or the Board of Directors on any matter relating to the Company's operations, policies or practices." The change is effective immediately.
J.C. Penney chair Thomas Engibous said in a statement that the company is "fortunate to have someone with Mike's proven experience and leadership abilities to take the reins at the Company at this important time."
Ullman said in the statement that J.C. Penney "has faced a difficult period," but that its "legacy as a leader in American retailing is an asset that can be built upon and leveraged."
J.C. Penney (Fortune 500) shares surged initially on the news of Johnson's departure, but pulled back on news that Ullman would replace him, and were down 7% by Monday evening. ,
"The choice of Mike Ullman, I think, is puzzling to a lot of people," said William Frohnhoefer, an analyst with BTIG, noting that Johnson's 2011 hiring was seen as an attempt to change course following Ullman's tenure.
J.C. Penney shares have plunged more than 50% over the past year as Johnson, a former Apple (Fortune 500) executive who spearheaded the tech giant's retail strategy, struggled to lead a turnaround effort. ,
Johnson announced a series of new initiatives -- including overhauled prices, redesigned store layouts, and even free haircuts for kids -- in an effort to revitalize the company. He ditched older brands and announced plans to to eliminate checkout counters in favor of mobile and self-checkout.
The results, however, were dismal. The company has been suffering steep losses, bleeding $427 million in the fourth quarter as sales fell 28% versus a year prior.
"He tried to do too much too soon," Frohnhoefer said. "He had a lot of very radical and bold ideas, and he tried to execute them all simultaneously."
Speaking to analysts in February, Johnson said the company had "made some big mistakes, and I take personal responsibility for these." J.C. Penney's marketing, he said, "didn't connect very well with our customers."
Johnson received a compensation package worth $53.3 million for 2011, $52.7 million of which came in a special stock award. He earned $1.9 million in 2012, receiving only 44% of his target cash compensation in view of the company's poor results, and did not get a stock award.
Ullman will receive an annual base salary of $1 million, J.C. Penney said Monday.
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