May Picks Acting CEO for Top Post

May Department Stores Co. quietly has tapped John Dunham as its chairman and chief executive in advance of the retailer’s $11-billion acquisition by rival Federated Department Stores Inc.

May’s executive compensation and development committee also increased Dunham’s annual base salary by $100,000 to $1.15 million, retroactive to when he assumed duties of acting chairman and CEO after the Jan. 14 resignation of Gene Kahn. Dunham, 58, already had been May’s president.

Dunham also received a $578,841 bonus and the option to buy 75,000 shares of May stock, the company said.

The St. Louis-based operator of Robinsons-May, Lord & Taylor, Famous-Barr, the Jones Store, Filene’s and other regional department stores revealed Dunham’s new titles in a filing this week with the Securities and Exchange Commission.

The company said the moves were made March 18, less than three weeks after the announcement that May and Cincinnati-based Federated -- operator of the Macy’s and Bloomingdale’s chains -- would join forces in a widely anticipated deal that would create a powerhouse better able to compete against discounter Wal-Mart Stores Inc. and upscale merchants.

If approved by regulators and shareholders of May and Federated, the combined company will have nearly 1,000 department stores and $30 billion in annual sales. Both companies have said they hope to close the deal this year.

Dunham has served as May’s president since 2001, when Kahn gave up that title to become chairman. At the time, Dunham was serving as the company’s vice chairman and finance chief.

Kahn’s resignation came without explanation and just seven months after May acquired more than five dozen Marshall Field’s department stores and nine Mervyn sites from Minneapolis-based Target Corp. for $3.24 billion -- which many analysts said was too high.