J.C. Penney Co gave James Oesterreicher, its recently departed chief executive, a $3m retirement benefit, according to the company's proxy statement filed with the Securities and Exchange Commission. Mr. Oesterreicher, 59-years-old, will also receive $904,000 annually in pension benefits.

During Mr Oesterreicher's five years as head of the company, which owns the J.C. Penney department-store chain and Eckerd's drugstores, sales and earnings slipped dramatically, and shares of Penney stock shed almost 75 per cent of their value.

Earlier this year, the company closed 45 under-performing stores, leading to an operating loss of $20m and layoffs of 1,800 employees, according to the federal filing.

The board of directors approved Mr. Oesterreicher's retirement benefit, paid in a lump sum, in recognition of his 35 years of service to the company. Mr. Oesterreicher announced plans to retire in May. Allen Questrom, former CEO of closely held Barneys New York Inc, succeeded him as chief executive and chairman in mid-September.