Poor Ron: Did He Get The Short End Of The Stick?

Mar.30.12 | About: J.C. Penney (JCP)

Poor Ron.

Reportedly Ron Johnson, J.C. Penney's (JCP) new boss received $53 million, largely consisting of restricted stock. In under a year on the job, his effect has been incredible: Penney is up 19% since his taking the helm.

Good news for Penney. Not so good for Ron.

Right after Johnson left his post as head of Apple's (AAPL) retail store division, the Cupertino tech giant handed out restricted stock.

Apple is promising 150,000 shares of restricted stock to six senior executives, vested as follows: half in June 2013, the remaining half in March 2016. At Apple's current share price, the lucky execs--Peter Oppenheimer, Bruce Sewell, Scott Forstall, Philip Schiller, Bob Mansfield and Jeffrey Williams--are each worth $56 million more on paper, should they continue working at Apple. Eddy Cue is slated to receive 100,000 shares.

Ron could have been in line for those 150,000 Apple shares, currently worth over $90 million. He'd have been able to cash in half in 2013. Not counting his Apple salary.

Moreover, the bulk of his money at Penney was in restricted stock designed to make Ron "whole" for the $50 million in other restricted stock he lost in leaving Apple.

As part of the package to lure Johnson to Plano, Texas, from Silicon Valley, Penney also gave Johnson restricted stock worth $50 million, which replaced the value of the equity award that Apple gave him that were due to vest on March 24, 2012. The new Penney restricted stock vests on January 27, 2012.

Penney replaced Apple's $50 million. Apple or Penney, that 50 was coming. In going over to Penney, Ron Johnson left a probable 150,000 shares of Apple on the table. That's the part that has to bite. And the part, the rest of the media didn't report.

Disclosure: I am long AAPL.