JC Penney Board Doles Out Cash Incentives As It Looks To Keep Executives Motivated

As JC Penney (JCP) moves closer to filing for bankruptcy, which is expected to come on Friday, the retailer’s Board of Directors has approved additional compensation for its executive team to keep them motivated during the “volatile and uncertain” times that are affecting the overall retail industry.

The executive officers will no longer receive their cash performance awards, which were based on certain conditions being met in fiscal 2019, 2020, and 2021. Now, the executives will be paid under JC Penney’s newly adopted Pre-Paid Compensation Plan, the company's Securities and Exchange Commission (SEC) filing said.

The Pre-Paid Compensation Plan will provide cash incentive awards immediately with certain repayment conditions if the employee is terminated or resigns before Jan. 31, 2021. A portion of the cash incentive will also have to be repaid if the officer does not meet their specified milestone-based performance goals.

The payment awards include $4.5 million to CEO Jill Soltau and $1 million each to Bill Wafford, executive vice president, chief financial officer, Michelle Wlazlo, executive vice president, chief merchant, and Brynn L. Evanson, executive vice president, chief human resources officer, according to the SEC filing.

The executive officers must also waive their right to receive a fiscal 2020 annual bonus plan or any long-term incentive awards within the same timeframe. In addition, all outstanding equity or other incentives will be forfeited.

JC Penney is reportedly looking to file for Chapter 11 as soon as this Friday, which is expected to come with a series of store closures. The retailer’s stores have been closed since March because of the coronavirus, and the majority of its workforce has been furloughed.

Shares of JC Penney stock were up 11.2117% as of 3:11 p.m. EDT on Wednesday.