NEW YORK – A fight broke out Thursday over J.C. Penney’s next CEO, as a prominent activist investor urged the company to find a replacement for interim CEO Mike Ullman, and the company’s chairman stood by Ullman.

Penney’s shares jumped about 7 percent on a media report that investor and Penney board member William Ackman is pushing the board to speed up the process of finding a permanent replacement for Ullman.

Ullman, who had been J.C. Penney’s CEO from 2004 to 2011, took back the reins in April when Penney CEO Ron Johnson was ousted after 17 months on the job. Johnson’s radical makeover of the chain led to massive losses and sales declines.

Analysts had expected Ullman’s reign the second time around would be transitional until Penney hired a replacement, but Ackman made public a letter Thursday, saying the search for a replacement has been too slow.

Ackman, who heads investment firm Pershing Square, urged J.C. Penney’s board to accelerate the CEO search.

CNBC first reported Ackman’s letter.

“Considering the scale of J.C. Penney, the seriousness of the issues it faces, and the complexity of its business, there are only a handful of executives with sufficient talent and experience to take on the CEO role,” according to the letter Ackman wrote to the directors and was made public. “We need a CEO with extensive, ideally department-store retail experience, strong operational skills and a strong public company track record. … We can’t afford to wait.”

But Penney’s board fired back later Thursday, saying that Ullman was “the right person to rebuild” J.C. Penney and that it strongly disagreed with Ackman.

“The company has made significant progress since (Mike Ullman) returned as CEO four months ago under unusually difficult circumstances,” Penney Chairman Thomas Engibous said in a release. “Since then, Mike has led significant actions to correct the errors of previous management and to return the company to sustainable, profitable growth.”

Engibous said the CEO search process, which started three weeks ago, will be “careful and deliberate to ensure we find the right long-term leader for J.C. Penney.”

Shares of Penney jumped 87 cents, or 6.8 percent, to close Thursday trading at $13.67. That is still down about 31 percent since the start of the year.


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