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

Tyler Durden's picture

If anyone is wondering why the darling stock of Bill Ackman and Whitney Tilson, for whom every collapse of JCP is a buying gift from god, namely JCPenney, is plunging after hours, it is because the company's president, Michael Francis, hired October 4, 2011, has just quit. To wit: "J. C. Penney Company, Inc. ("jcpenney") (JCP) today announced that Michael Francis will be leaving the Company, effective today. Chief Executive Officer Ron Johnson will assume direct responsibility and oversight of the company's marketing and merchandising functions." And to think that just 9 months ago the company CEO Ron Johnson announced, that "I am thrilled to welcome 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 deep understanding of the industry will be invaluable as we set out to transform J.C. Penney into America's favorite store." And while his ability to do anything else appears to have been a dud, his ability to read the fine print in his contract, especially where it talks about his perks, was second to none. Because despite leaving just 9 months after his hiring, Francis is entitled to collect a whopping $9 million in pro-rated signing bonus (alongside $100,000/month in salary): all in all - a tidy package of $10 million for shooting the breeze while observing a sinking retail ship. Not bad for a company whose stock has just plunged to September 2010 levels.

From the firm's proxy statement:

Michael R. Francis.  Mr. Francis’s offer letter, dated October 3, 2011, provided for the following:     

  • Base salary of $1,200,000
  • Participation in our Management Incentive Compensation Program, with a target bonus equal to 100% of base salary, with a maximum bonus equal to 200% of base salary (prorated for 2011)
  • 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 remains continuously employed by us
    • RSUs will pro rata vest if Mr. Francis is terminated by us without cause prior to vesting
    • RSUs will fully vest if, within two years of a change in control, his employment is terminated other than for cause or if he terminates his employment for good reason
  • A sign-on cash bonus of $12,000,000
    • Mr. Francis must reimburse us for a prorated portion of the bonus if he voluntarily terminates his employment for any reason other than death or disability or if we terminate his employment for cause prior to October 4, 2012
  • Participation in our 2011 Change in Control Plan
  • Participation in certain perquisites and benefits as an executive officer of the Company

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.

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LULZBank's picture


Is that all you can say?

Dont you wanna fuck him?

battle axe's picture

LULZBank; Ok, how about COCK SUCKING SCUMBAG. Does that do it for you?

CrazyCooter's picture

Wasn't there a post here recently where someones newsletter or something was pumping JCP?




Pure Evil's picture

Where is the comment from MDB to show that this is all bullish and that we definitely live in a bizarro world.

redpill's picture

If some dumbshit retailer wanted to hand me a $12 million check for doing nothing I'd take it too!  The shareholders shouldn't be mad at the guy who cashed in the winning lottery ticket, they should be pissed at the board that gave it to him.

Careless Whisper's picture

My guess is he was fired. One day after Father's Day and I have a feeling the JCPenny real life gay dads' ad didn't help sales much, plus it pissed off a few people.


Mad Mad Woman's picture

Actually the gay ad was brilliant. It'll drive more consumers thru their doors. Controversial things always draw criticism from the less enlightened people.

Memo to JCP - I'm available for the President's position and I'm not that expensive and I'll generate results. Seeking nice bennies and $1.5 million a year. I can start tomorrow.

Why do corporations keep hiring bozos? It's very costly to the bottom line.

LawsofPhysics's picture

Moreover it will bring more free air time to JCP.  Attention is always good in this case.

Marginal Call's picture

The problem I see is that no gay dudes I know would be caught dead wearing any of the shit JCP stocks in the store. 

Careless Whisper's picture

@ MadMadwoman

That gay ad was gay (as in stupid). Not a good ad for their brand. You can say things without really saying things, but for jcp I think they were way off on appealing to trendy shoppers.



Marginal Call's picture

That pic looks like a Tim Tebow Filipino foreskin drive to me. 

Pure Evil's picture

Isn't that Ashton Kutcher in the center being piggy-backed?

No wonder he left Demi Moore.

financial apocalyptic contagion's picture

shareholders are to blame also

why the fuck would you not dump this piece of shit when scum of the earth like this faggot who likes faggot ads, is running the company?

Tilson bought JCP--- that should be the biggest hint to exit

wtf 10million when i cant even afford a few ounces of silver-- in a few yrs people will be hunting bastards like this Francis fellow all across Argentina 

Doomer's picture

@Mad Mad Woman

So "the gay ad was brilliant", but you want corporations like JCP to stop "hiring bozos"?  Sounds like your IQ qualifies you to collect at least $1.5 mil a year.

The only plan that makes sense here is to liquidate this rotting corpse of a company and distribute the proceeds to shareholders before the vultures have completely devoured it.



geoffb's picture

So the strategy was to lure gay people to shop at JCPenney en masse? WTF? I could give them better ideas than that for way less than 10 million.

Colonel's picture

One of the problems with that strategy is that boomer habits and nostalgia can't keep the JCP ship afloat. And there is alot more boomers than flamers.

Will To Live's picture

They should have sold the shit that people wear to shop at Wal Mart. Now thats a plan worth $10 Mil

Squid Vicious's picture

Sources say Ellen Degenerate has the inside track on the newly "vacant" CEO position

URZIZMINE's picture

Shouldn't the title read " He collected $10 mil then came"?

StockMarketGrimReaper's picture

Based on the ethnicity of the kids in that advert, I'm wondering where the gay couple got those kids. Perhaps there's a new drive-through adoption store in Tijuana next to the shop that sells black velvet paintings of Rambo,  Terminator, and the Incredible Hulk? Or maybe the kids in the photo are supposed to be the shoppers at JCP, not the dads? The kids certainly look more like the JCP customers; definitely not the dads.

Will To Live's picture

Hey, You could have been a Chick. 50 50 chance.  Wait, that is dissing gays.

grid-b-gone's picture

He may have been pushed more than jumped. Johnson has been adding Apple buddies recently and Mr. Francis, promoting his "Target way", probably doesn't quite fit in.

He'll get another chance somewhere else if he wants one, especially if the remaining team can't bring the Apple magic into traditional retail.

slaughterer's picture

Didn't this scumbag work for Apple before?

flying dutchmen's picture

give they guy a break-- its tough surviving on 10 mill..... however if it was equity option they are out of money anyway.. so the number is a lot lower...

junkyardjack's picture

JCP forgot that the only time people ever shop is when there are 50%+ sales.  Everyday low prices only help if people are expected to regularly shop vs continously wait and look for the next massive price dump.  JCP is in the wrong place at the wrong time, it tailors to the middle class which is non-existant.  Either upgrade the merchandise for the Chinese and Middle Easterners or start accepting WIC checks....

lizzy36's picture

Looks like they forgot to give the president his 50% off on his BONUS. 

Manthong's picture

I bet they could boost sales this month if they offered a shareholder discount on buckets of tar and bags of feathers.

grid-b-gone's picture

That is probably the case. Francis wanted the low price focus, which only resulted in squeezed margins. The remaining former Apple team will probably shift toward a more unique product mix that can command a higher margin and not compete so directly with the Wal-Mart and Target space.

Just as with traders and investors, there is a price to pay for being wrong, even if you're right and the timing is a little off. Of course, $10 mil doesn't look like much of a price to pay, but as damaged goods, his total potential career comp for being wrong may have just dropped by $50 mil or more.

Marginal Call's picture

He's not worth the 10 he got, let alone 50 more in the future.


One of the biggest problems with business is the misalocation of capital at the top.  Here's a another company that relies on people having money to spend, but is just another shell operation to funnel money to a handfull of people.  The outsourcing has run it's course. 

grid-b-gone's picture

Executive recruiters pick the biggest money talent with the longest string of successes they can find and pay what they need to.

They can't just pick the best, promising talent that will do the job for $500K and some stock options because they don't know how to find that person. This is executive recruitment, not executive development. The recruitment process is about not making a big mistake so you, as the recruiter, keep your job.

When Sculley axed Steve Jobs, how many companies were knocking on Steve's door the next day with a $10 million annual contract? Yet, those same companies would have paid $100 million per year to get him once he was back on the winning track.

This is one reason why small companies regularly beat large ones. It is common for a successful small company owners to say, "I'm doing a job that I never would have been hired to do." Phenomena like these are reasons Ziggy and Dilbert are funny and true at the same time.

And those surviving former Apple execs at JCP... do you really think they are the most-qualified people to turn around a struggling retail company in a highly price-competitive market? Did coming from a company where the product dominates its market and sells itself prepare them for the JCP turn-around? It doesn't matter. Like any worker looking to get hired, it's all about making them think you have the magic beans.

Squid Vicious's picture

couldn't agree more, this was the no brainer short of the century at 40+, probably still is....

pods's picture

Lighten up Francis!

AccreditedEYE's picture

He still can't touch the Peter Kraus record of $25 million for 3 months.... ameteur. 

Joshua_D's picture

You gotta get while the gettin's good.

Meremortal's picture

At least he was paid voluntarily with someone else's money, not mine.

And he probably generated about $3 million to the US Treasury, so I'm good with it.

Rockfish's picture

Push red button. "That was Easy"

That cost about 300 jcp jobs


bdc63's picture

... I suspect a WHOLE lot more than that ...

FLUSA.com's picture

...and Bernie Madoff throws his jail issued bed pan in disgust realizing you don't go to jail for this....

bdc63's picture

do we blame it on the guy that collected the $10M, or the system that allowed such a contract to be written in the first place?

"board of directors" are broken.  it's a buddy system that failed the stock holders YEARS ago.

Joshua_D's picture

Right. I mean, if your local burger joint started serving crap burgers, would you keep buying and eating crap burgers? At some point the people, either the share holders or the consumers, have to stop buying the fracking crap burgers! Money talks.

LawsofPhysics's picture

It goes beyond that.  Once the burger joint fails you need to make sure that the management and owners pay back the creditors.  Otherwise these fuckers will just get a taxpayer bailout.