If the stock price is below $30 per share when the warrants can be exercised, Johnson loses his entire $50 million investment.
On the flipside, if the shares are at $50 at that point, Johnson's stake would be worth more than $360 million.
Johnson isn't the only one at J.C. Penney taking the hit. The proxy filed with the SEC said, "None of our named executive officers received an annual cash incentive award for fiscal 2012 due to the company's financial results versus its goals. Our CEO received 44 percent of his target cash compensation (base salary only) and our other current named executive officers received, collectively, 55 percent of their aggregate target cash compensation (base salary only)."
Another point of frustration for some investors is that Johnson's permanent residence remains in California although J.C. Penney is headquartered in Plano, Texas. Beyond the base salary in 2012, Johnson tallied $344,213 in corporate jet expenses for his personal travel. J.C. Penney had no comment beyond what's in the proxy.
However, previous SEC filings reveal Johnson's $344,213 in corporate jet usage for personal travel is not only usual for J.C. Penney's chiefs. In fact, it's actually below the amount that former CEO Myron "Mike" Ullman used during five of the seven years of his tenure as J.C. Penney's CEO (see table below). Ullman's permanent residence was in Colorado.