Ullman, who previously served at the helm of the department store for seven years, returned to Penney's in April 2013 to reverse the downward spiral caused by Johnson's failed reinvention, which included doing away with coupons.
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Analysts commended Ellison's operational background at Home Depot, where he led the launch of its ship from store and buy online, pick up in store programs. Still, his lack of experience in apparel caused some to question whether he was the right selection.
"An operational expert from a hardlines retailer is not what we feel [J.C. Penney] needs," said Wells Fargo analyst Paul Lejuez, who has an "underperform" rating on the company. "He will need to figure out how to navigate an extremely promotional apparel and accessories environment, while also strengthening [J.C. Penney's] brand/value proposition in areas where it appears he has less experience."
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Ellison will receive a one-time cash signing bonus of $4.14 million. His annual base salary, to be reviewed annually by the board, was set at $1.3 million. He is also eligible for an annual performance-based bonus, which could reach as high as $3.9 million in 2015.
Penney's shares rose 5 percent to near $7.43 in morning trading.
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