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Penney, which generated revenue of $17.7 billion in its latest fiscal year, has also created a unit devoted to finding new revenue streams. As part of this initiative, the company opened the first 10 Foundry Big & Tall Supply co. stores, six in the Dallas-Fort Worth area and four in Kansas City.

Penney has also cut costs by closing some stores, outlets and a call center. It is also wrapping up the shutdown of its catalog business.

But Johnson’s appointment is a sign that J.C. Penney is positioning itself for a new era in which shoppers increasingly use mobile phones to check prices or shop. And so the need to inject excitement into Penney’s more than 1,100 stores, which Wall Street Strategies analyst Brian Sozzi describe as too dark and stodgy, becomes even more critical.

In clothing, J.C. Penney has been squeezed by competition from Macy’s on the high end and Target and H&M on the cheaper end. Its competitors are also expanding exclusive items to make them stand out.

Johnson brings expertise in both “soft goods” like clothing and “hard goods” like gadgets, said Gilbert Harrison, CEO of Financo, an investment banking boutique that specializes in retailing.

Johnson “knows how to doll up an environment,” said Hal Reiter, CEO of Herbert Mines Associates, a recruiting firm in the retail industry. The question, he said, is, “How can you merchandise a pair of jeans” and make it as exciting as Apple’s products.

Johnson will receive a base salary of $1.5 million, and the opportunity to make a cash bonus of $1.875 million if he reaches certain performance goals, which the company did not disclose, according to documents filed with the Securities and Exchange Commission. He also will receive a grant of 1.66 million shares of restricted stock. The stock grant was valued at $50 million, based on J.C. Penney’s closing stock price of $30.31 a share on June 13.

Johnson’s total compensation at Apple for 2010 was $29.8 million. That included his salary, stock awards, performance-based cash bonus and perks.

By leaving Apple, Johnson forfeits 150,000 shares that would have vested in March 2012, with a current market value of $50 million. Penney, in its announcement of the new CEO hiring, said its stock award replaced what Johnson is giving up by leaving Apple before next March.

Johnson is also forfeiting an additional 100,000 shares of Apple stock that wouldn’t have vested until September 2014. The current market value of those shares is $33 million.

Penney said Johnson requested to make a personal investment of $50 million in the company through the purchase, at fair market value, of 7 1/2 warrants on 7.257 million shares of Penney stock. The warrants cannot be sold or hedged for the first six years of their term and have a strike price of $29.92, the closing price of the stock on the business day before Johnson’s commitment to purchase the warrants.


AP Business Writer Rachel Beck in New York contributed to this report.