Johnson left his former position as head of retail operations at Apple (AAPL), before joining J.C. Penny in June 2011.
When Johnson joined J.C. Penney, he took a $50 million warrant position in the company's shares as a vote of confidence in the turnaround plan he was brought on to execute. Johnson's 7,256,894 warrants to buy J.C. Penney shares, which he bought for $6.89 a share, had an exercise price of $29.92.
According to SEC filings , the over 7 million in stock warrants couldn't be exercisable until 2017, unless Johnson was fired or left the company through a voluntary resignation. At that point, J.C. Penney's stock price would have to be in excess of the sum of the the warrant exercise price and the price paid for the warrant, to hold any value.Unfortunately for Johnson, his resignation from J.C. Penney on Monday means that the warrant contracts purchased in 2011 become immediately exercisable and thus are currently worthless given the company's closing share price of $15.87. Johnson's warrant contracts had an exercise price close to J.C. Penney's share price when he came onboard the company in the summer of 2011. J.C. Penney shares, which had fallen nearly 20% in 2013 though Monday's close, fell over 7% in after-hours trading after the company announced former chief executive Mike Ullman will return to the company. -- Written by Antoine Gara in New York Follow @antoinegara
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV