New York Times story compares Gannett furloughs and executive bonuses

The top story in the business section of today's New York Times relates how Gannett executives ordered furloughs for their employees and noted that they, too, would take unpaid time off...at the same time that they were quietly taking millions in bonuses.

Of course, readers of The Turner Report knew that two and a half weeks ago. From the Times article:

After explaining that revenues at the newspaper giant continued to be soft and the outlook was uncertain, Robert J. Dickey, Gannett’s president of U.S. Community Publishing, said, “I know furloughs are very hard on you and your families and I thank each of you for the continued commitment and great work.”


Mr. Dickey made it clear that not only did the company’s executives feel their pain, they would share the sacrifice, noting that he too would take a furlough and that Craig A. Dubow, the chief executive, and Gracia C. Martore, the president and chief operating officer, “each will be taking a reduction of salary that is equivalent to a week’s furlough.”

But as it turns out, the buck stopped just short of Mr. Dubow and other executives. Mr. Dubow had agreed to lower his salary by 17 percent through 2011, but then again, last month he received a cash bonus of $1.75 million for 2010 and Ms. Martore received $1.25 million. For 2010, they were also awarded stock, options and deferred compensation that would bring their combined packages to $17.6 million if the company and its stock hits certain targets.

The Times article noted that the $33 million saved from furloughs was almost completely erased by $28 million in bonuses.

Following is what I wrote in the March 25 Turner Report:

It received just a small mention in a proxy statement filed by Gannett with the SEC Thursday.


Because of the continuing tough economy, all company employees will have to take a one-week unpaid furlough during the first quarter of 2011. Most of them have already done so.

But in the spirit of shared sacrifice, it isn't just the people selling ads or covering news at our area Gannett newspaper, the Springfield News-Leader, who are shouldering the burden. CEO Craig Dubow will also take a week off, giving up his salary. Whether he can file for unemployment during that week I don't know. He probably could if he were living in Missouri. After all, he will be giving up far more money than his Springfield News-Leader employees since he pulls down $1 million in base pay.

Times have been tough at Gannett over the past year, just as they have been at every newspaper organization in the United States. Employees have taken multiple furloughs and some, an estimated 2,400, have even lost their jobs, many of them in their 40s and 50s, a time when new jobs are not easy, almost impossible, to find.

In the Associated Press article on Gannett's SEC filing, the reporter diligently noted that Dubow had voluntarily reduced his base salary (it had been $1.2 million) and the proxy statement dutifully noted that everyone was taking the furlough.

But when all compensation is taken into consideration, the proxy statement shows a completely differenct picture of this shared sacrifice.

While Gannett employees take unpaid time off and wait for the day when the bell tolls for them, Dubow received a pay package totaling $9,405,049, an increase of nearly five million from 2009. Chief operating officer Gracia Martore's compensation was $8,175,946, up more than four million. Three other top officials, including the publisher of USA Today, also received massive increases in their total compensation.

Even CFO Paul Saleh, who only took over that job in November, had a total pay package of more than $2 million.

And thanks to their ironclad contracts, Dubow and his fellow top Gannett officials will never have to worry about that day when someone taps on their shoulders and tells them to clean out their offices. They are covered for every situation that could possibly occur.

The proxy statement shows upon his retirement or if he quits, Dubow will take away $22.9 million and Ms. Martore, a much more reasonable $13.3 million.

If Dubow dies while devising ways to make much lower paid employees take unpaid time off, his family will receive nearly $34.6 million. For Ms. Martore, that figure is $20.9 million.

Disability would work out even better- $37 million for Dubow and $23.5 million for Ms. Martore.

The best situation for the top Gannett officials would occur if there is a change in company ownership. In that case, Dubow would receive a package worth $45.1 million and Ms. Martore would rake in $34 million. If the new owners decided to clear the decks and remove Gannett's top six officials, those six would walk away with approximately $115 million, according to the proxy statement.

Considering the amount of stories the newspaper has run on CEO pay packages and employee layoffs, it is remarkable that one place that doesn't consider the pay packages of Gannett offficials to be news is USA Today.

The newspaper does not have one mention of the proxy statement in its weekend edition.

Maybe its editors are on furlough.

Gannett papers freeze wages

Gannett appears to be instituting a companywide wage freeze. Reports have been confirmed that five Gannett newspapers have frozen wages.

The drastic measure was an absolute necessity for Gannett, if it intends to keep its top executives living in the lap of luxury. The problems facing the company were noted in the March 25 Turner Report:

It received just a small mention in a proxy statement filed by Gannett with the SEC Thursday.


Because of the continuing tough economy, all company employees will have to take a one-week unpaid furlough during the first quarter of 2011. Most of them have already done so.

But in the spirit of shared sacrifice, it isn't just the people selling ads or covering news at our area Gannett newspaper, the Springfield News-Leader, who are shouldering the burden. CEO Craig Dubow will also take a week off, giving up his salary. Whether he can file for unemployment during that week I don't know. He probably could if he were living in Missouri. After all, he will be giving up far more money than his Springfield News-Leader employees since he pulls down $1 million in base pay.

Times have been tough at Gannett over the past year, just as they have been at every newspaper organization in the United States. Employees have taken multiple furloughs and some, an estimated 2,400, have even lost their jobs, many of them in their 40s and 50s, a time when new jobs are not easy, almost impossible, to find.

In the Associated Press article on Gannett's SEC filing, the reporter diligently noted that Dubow had voluntarily reduced his base salary (it had been $1.2 million) and the proxy statement dutifully noted that everyone was taking the furlough.

But when all compensation is taken into consideration, the proxy statement shows a completely differenct picture of this shared sacrifice.

While Gannett employees take unpaid time off and wait for the day when the bell tolls for them, Dubow received a pay package totaling $9,405,049, an increase of nearly five million from 2009. Chief operating officer Gracia Martore's compensation was $8,175,946, up more than four million. Three other top officials, including the publisher of USA Today, also received massive increases in their total compensation.

Even CFO Paul Saleh, who only took over that job in November, had a total pay package of more than $2 million.

And thanks to their ironclad contracts, Dubow and his fellow top Gannett officials will never have to worry about that day when someone taps on their shoulders and tells them to clean out their offices. They are covered for every situation that could possibly occur.

The proxy statement shows upon his retirement or if he quits, Dubow will take away $22.9 million and Ms. Martore, a much more reasonable $13.3 million.

If Dubow dies while devising ways to make much lower paid employees take unpaid time off, his family will receive nearly $34.6 million. For Ms. Martore, that figure is $20.9 million.

Disability would work out even better- $37 million for Dubow and $23.5 million for Ms. Martore.

The best situation for the top Gannett officials would occur if there is a change in company ownership. In that case, Dubow would receive a package worth $45.1 million and Ms. Martore would rake in $34 million. If the new owners decided to clear the decks and remove Gannett's top six officials, those six would walk away with approximately $115 million, according to the proxy statement.

Considering the amount of stories the newspaper has run on CEO pay packages and employee layoffs, it is remarkable that one place that doesn't consider the pay packages of Gannett offficials to be news is USA Today.

The newspaper does not have one mention of the proxy statement in its weekend edition.

Maybe its editors are on furlough.

Gannett CEO: How I doubled my pay and I only had to fire 2400 employees

It received just a small mention in a proxy statement filed by Gannett with the SEC Thursday.

Because of the continuing tough economy, all company employees will have to take a one-week unpaid furlough during the first quarter of 2011. Most of them have already done so.

But in the spirit of shared sacrifice, it isn't just the people selling ads or covering news at our area Gannett newspaper, the Springfield News-Leader, who are shouldering the burden. CEO Craig Dubow will also take a week off, giving up his salary. Whether he can file for unemployment during that week I don't know. He probably could if he were living in Missouri. After all, he will be giving up far more money than his Springfield News-Leader employees since he pulls down $1 million in base pay.

Times have been tough at Gannett over the past year, just as they have been at every newspaper organization in the United States. Employees have taken multiple furloughs and some, an estimated 2,400, have even lost their jobs, many of them in their 40s and 50s, a time when new jobs are not easy, almost impossible, to find.

In the Associated Press article on Gannett's SEC filing, the reporter diligently noted that Dubow had voluntarily reduced his base salary (it had been $1.2 million) and the proxy statement dutifully noted that everyone was taking the furlough.

But when all compensation is taken into consideration, the proxy statement shows a completely differenct picture of this shared sacrifice.

While Gannett employees take unpaid time off and wait for the day when the bell tolls for them, Dubow received a pay package totaling $9,405,049, an increase of nearly five million from 2009. Chief operating officer Gracia Martore's compensation was $8,175,946, up more than four million. Three other top officials, including the publisher of USA Today, also received massive increases in their total compensation.

Even CFO Paul Saleh, who only took over that job in November, had a total pay package of more than $2 million.

And thanks to their ironclad contracts, Dubow and his fellow top Gannett officials will never have to worry about that day when someone taps on their shoulders and tells them to clean out their offices. They are covered for every situation that could possibly occur.

The proxy statement shows upon his retirement or if he quits, Dubow will take away $22.9 million and Ms. Martore, a much more reasonable $13.3 million.

If Dubow dies while devising ways to make much lower paid employees take unpaid time off, his family will receive nearly $34.6 million. For Ms. Martore, that figure is $20.9 million.

Disability would work out even better- $37 million for Dubow and $23.5 million for Ms. Martore.

The best situation for the top Gannett officials would occur if there is a change in company ownership. In that case, Dubow would receive a package worth $45.1 million and Ms. Martore would rake in $34 million. If the new owners decided to clear the decks and remove Gannett's top six officials, those six would walk away with approximately $115 million, according to the proxy statement.


Considering the amount of stories the newspaper has run on CEO pay packages and employee layoffs, it is remarkable that one place that doesn't consider the pay packages of Gannett offficials to be news is USA Today.

The newspaper does not have one mention of the proxy statement in its weekend edition.

Maybe its editors are on furlough.

Gannett CEO has $46 million termination package

At numerous points in a definitive proxy statement filed March 22 by Gannett, it was mentioned that CEO Gracia Martore had voluntarily given up 10 percent of her salary, opting to take one for the team and receive only $900,000 instead of $1 million.

The sacrifice, however, was just a drop in the bucket since the SEC filing indicates Ms. Martore's pay package amounted to more than $8.4 million.

And while she has been at the helm during a time when thousands have lost their jobs due to her decisions and all Gannett employees have had to take one or two weeks of unpaid furloughs per year, if Ms. Martore ever loses her job because of a change in ownership, she will receive a termination package totaling more than $46 million.

I would guess that Ms. Martore's $100,000 sacrifice was probably not appreciated much by those who have lost their jobs or had to take those frequent furloughs under Ms. Martore's stewardship.

The SEC filing shows Gannett, owner of the Springfield News-Leader, provided Ms. Martore with a pay package totaling $8,453,598, close to $4 million more than the $4,693,809 she received in 2011.

The amount included a $1.6 million bonus, $2,929,316 in stock awards, $2,924,307, listed as "change in pension value, and nonqualified deferred compensation earnings," as well as $117,283 in "other compensation."

The other compensation, according to the filing, included a $31,340 life insurance premium, $7,500 for her 401K plan, premiums for supplemental medical coverage, a company-provided automobile, occasional personal use of company aircraft, legal and financial services, and a $15,000 contribution to a charity of Ms. Martore's choice.

As someone who spent more than two decades as a newspaper reporter and editor, topping out at $26,000 a year as managing editor of a small southwest Missouri daily, you might think I would be happy to see that so much money is being spent by a newspaper company, especially at a time when newspapers are widely considered to be a dying breed.

Unfortunately, this is is not good news. During the time in which Ms. Martore's compensation increased by nearly $4 million, Gannett reduced the number of people employed in its newspaper division by 2,800.

While those 2,800 people were sent back into job search mode under Ms. Martore's reign, usually with a meager severance package, she will have no such worries if the day ever comes when she and Gannett part ways.

The definitive proxy statement indicates she will receive a termination package totaling more than $20 million. If something unfortunate should happen and Ms. Martore dies, her family will receive almost $30 million and Ms. Martore would receive about the same amount if for some reason she becomes disabled.

And as noted above, if the company changes hands and she loses her job, she gets $46 million, including a pension worth $17,745,638 and $7,650,000 in severance pay.

Of course, readers of Gannett newspapers can rejoice since obviously this concentration of wealth in the hands of Ms. Martore and her fellow executives has resulted in dramatically improved products that benefit the communities in which they operate.

Contrary to popular opinion, it isn't the internet that has killed newspapers; it is greed.

Furloughs set for Springfield News-Leader, Gannett in 2010

Company-wide furloughs for the Springfield News-Leader and other Gannett newspapers have been announced for the first quarter of 2010. From the memo sent to Gannett employees by Bob Dickey, head of Gannett's Community Publishing Division:

We are instituting the furloughs during the first quarter because it is traditionally the lightest time of the year for us. Non-union USCP employees, including me, will be furloughed for five business days during the quarter. We will be communicating separately with union representatives and asking for their support of the furloughs. However, those union-represented employees who recently negotiated pay reductions in their contracts will not be furloughed.

Exempt, salaried employees must take one full payroll week within the pay period, to be completed by Sunday, March 28. Non-exempt, hourly employees will also take five days at any pre-approved time, before the last weekend in March.

Arrogance leading to the decline and fall of newspapers

I am so tired of the hand wringing over the failing newspapers in the United States. I worked for newspapers for 22 years and I can tell you without the slightest doubt that the major reasons you read about in every tearjerking story over their decline and fall are only symptoms and come nowhere near to accurately describing the disease.

Newspapers are not failing because they gave away their product for free over the Internet.

Newspapers are not failing because a younger generation does not want to read and has more interest in social networking and video games.

Newspapers are failing because of the arrogance of the people who are running them.

I am not talking about the editors and reporters on the front lines. They are playing with the meager hands they have been dealt. The problem is at the top- the companies that decided it was more important to squeeze every last cent out of the newspapers without putting any quality back into them.

Companies like GateHouse Media, which I worked for when it was known as Liberty Group Publishing bought up one newspaper after another, chose center production hubs and eliminated jobs in communities without doing anything to improve their products. News staff sizes were cut drastically, production jobs eliminated entirely, while all the while company executives boasted of an improved product. Usually, this improved product consisted of a redesign, some advertising initiatives, and more special sections and niche products than can be counted. And that devotion to outside products cut down on the quality of the daily newspaper.

In small communities, obituaries, wedding anniversaries, engagements, births, all of which had been considered news in the past, were now just sources of revenue. If a family cannot afford to pay outrageous prices to a newspaper during its time of grief, the loved one's death will simply go without notice.

And no one at the top of these newspaper chains was able to figure out they were creating a disconnect between the community and the newspaper. Newspaper owners of the past, most of whom lived in the community, were smart enough to know that membership in the Chamber of Commerce and sponsoring a fireworks display or a concert (or more likely some kind of business expo) only reached one segment of the community and not a big one at that. It doesn't matter how much time you play footsie with the business community if you are not reaching their potential customers. Each time newspapers cut back on news coverage, or charged for it, they lost more and more of those potential customers.

Are there any signs that anyone at the top of the newspaper chains recognizes this problem and is doing anything about it?

Sadly, no. If anything, the companies are headed in the opposite direction. Instead of putting more money into their news products, newspapers continue to create niche products, each of which brings in some revenue, but do nothing to stop the hemorrhaging taking place in the core product. More attention is paid to the type of national celebrity news that readers can and will find more easily on the internet. What they usually will not find on the internet is the local news they need.

And the practice of centralizing production and cutting jobs continues. If even some of the savings that the newspaper chains realize from these moves were put back into the journalistic product, there might be something to say for them, but that is almost never the case. All it does, is improve the company's bottom line, cut more jobs, and slash even more ties to the local communities that eventually will determine if the newspapers are going to survive.

The most recent move of this sort was announced this week by Gannett, the country's most powerful newspaper chain. As I noted Tuesday, Gannett is centralizing pagination at five hubs across the country, and considering the company has nearly 100 daily newspapers, that means a number of people will receive pink slips in the near future, affecting every local community Gannett is supposed to serve.

While Gannett and other newspaper chains cannibalize their own products in search of every nickel they can find, the long-term health of those very products is being sacrificed for short-term profits for stockholders and a killing for the executives who are destroying the foundation on which their companies were built.

In the March 18 Turner Report, I noted the massive bonuses Gannett CEO Craig Dubow and other Gannett executives have received while cutting jobs and forcing employees to take two weeks of unpaid furloughs:

In a proxy statement filed today with the Securities and Exchange Commission, Gannett, owner of USA Today and daily newspapers across the United States, including the Springfield News-Leader, announced more than $2.1 million in bonuses for its five top executives, including $1,450,000 for CEO Craig Dubow.

And while Gannett employees have to wonder if they will have still jobs and have to take meager severance packages and/or unemployment pay when they are fired, Dubow and his fellow executives can wreak havoc with others' lives while being guaranteed they will not face similar upheavals:

And while many Gannett employees were shown the door to help the company's bottom line, Dubow has no needs to worry on that account. If he ever leaves the company voluntarily, it has already invested nearly $9.6 million for his pension, he has nearly $6 million in stock options, and more than $3.8 million in restricted stock units, for a total of $19,312,688, according to the proxy statement.

After Dubow leaves the company, he will have medical coverage paid for life, home computer assistance for three years, use of the company plane for the same amount of time (though he will have to reimburse Gannett for that), use of an office, secretarial assistance, for a total of $47,000 worth of perks.

If for some reason, the ownership of Gannett changes hands, Craig Dubow is guaranteed $39 million under his contract, with the other top four officials guaranteed a combined $48.5 million, for a total of $87.5 million.

Please don't blame a fickle readership for the rapid disintegration of newspapers in the United States and don't consider using taxpayer money to prop up this cadaver so it can pillage our communities for more profits and provide little of substance in return.

Readers only left newspapers because the newspapers left the readers.

News of Gannett furloughs announced on same day high-priced official hired

It used to be news when Gannett, owner of the Springfield News-Leader and newspapers across the United States, forced its employees to take a week off without pay. Now it has became an accepted part of the company's business strategy.

Gannett required its employees to take two weeks of unpaid leave this year, the same year that its former CEO Craig Dubow resigned, taking with him a hefty $37 million retirement package.

Now the Gannett Blog says another furlough has been mandated for the first quarter of 2012.

Meanwhile business goes on as usual for the upper crust at the company. While those who can least afford it are being required to take time off with no pay, Gannett announced Wednesday it was hiring a new official at a salary of $325,000 a year...with a $75,000 signing bonus.

On November 28, 2011, Gannett Co., Inc. (the “Company”) issued a press release announcing that Teresa S. Gendron had been appointed its Vice President and Controller, effective immediately. A press release announcing the appointment of Ms. Gendron is attached hereto as Exhibit 99.1 and incorporated herein by reference.

In connection with Ms. Gendron’s appointment, the Executive Compensation Committee of the Company’s Board of Directors approved a base salary of $320,000 and a sign-on bonus of $75,000. Ms. Gendron received options to purchase 15,000 shares and 10,000 restricted stock units under the terms of the Company’s 2001 Omnibus Incentive Compensation Plan (amended and restated as of May 4, 2010), subject to the Company’s standard vesting schedule.

George R. Gavagan, currently the Company’s Vice President and Controller, will become its Vice President and Chief Accounting Officer, effective immediately, and will continue to serve as its principal accounting officer. Ms. Gendron will assume the role of principal accounting officer upon Mr. Gavagan’s retirement, which is anticipated shortly after the Company files its Form 10-K for the 2011 fiscal year at the end of February 2012.

The company's news release made no mention of Ms. Gendron's salary or perks. Business as usual for Gannett.

Gannett execs to receive more than $2.1 million in bonuses

The recession must be over since it seems to be business as usual for the nation's largest newspaper company.

In a proxy statement filed today with the Securities and Exchange Commission, Gannett, owner of USA Today and daily newspapers across the United States, including the Springfield News-Leader, announced more than $2.1 million in bonuses for its five top executives, including $1,450,000 for CEO Craig Dubow.

The bonuses, according to the proxy statement, were based on the company's performance. Since revenues were not anywhere near previous levels, that would indicate the hefty bonuses given to Dubow and the other top execs came on the backs of company employees who had to take two weeks of unpaid furloughs...if they managed to hold on to their jobs. Approximately 6,000 Gannett employees were shown the door in 2009.

The proxy statement is filled with explanations for Gannett's generosity, including the "sacrifice" made by Dubow, who voluntarily took a 17 percent pay cut, from $1.2 million to $1 million annually, to show solidarity with his employees. Of course, it is much easier to make that sacrifice if you know you are going to get it back in bonuses a few months later. The proxy statement notes that Dubow received $1 million in bonus money for 2008, meaning that his $200,000 sacrifice ended up as a net gain of a quarter of a million dollars. Nice work if you can get it.

The statement indicated Dubow would be making that same sacrifice this year, keeping his salary at $1 million. Who knows how much of a bonus will be forthcoming for 2010:

Mr. Dubow’s minimum annual base salary under his employment contract is $1.2 million; however, Mr. Dubow voluntarily reduced his salary to $1 million in 2009 and again in 2010. Mr. Dubow has not received a salary increase since January 2006.

Why would Craig Dubow need an increase to his base salary. The proxy statement reveals that his total compensation package for 2009 was $4,698,692, an increase of more than $1.5 million over 2008.

And while many Gannett employees were shown the door to help the company's bottom line, Dubow has no needs to worry on that account. If he ever leaves the company voluntarily, it has already invested nearly $9.6 million for his pension, he has nearly $6 million in stock options, and more than $3.8 million in restricted stock units, for a total of $19,312,688, according to the proxy statement.

After Dubow leaves the company, he will have medical coverage paid for life, home computer assistance for three years, use of the company plane for the same amount of time (though he will have to reimburse Gannett for that), use of an office, secretarial assistance, for a total of $47,000 worth of perks.

If for some reason, the ownership of Gannett changes hands, Craig Dubow is guaranteed $39 million under his contract, with the other top four officials guaranteed a combined $48.5 million, for a total of $87.5 million.

It must certainly be comforting to Gannett employees to know that the crisis has disappeared. Through the sturdy leadership of self-sacrificing Craig Dubow, the company must be rapidly returning to its previous levels of prosperity. After all, these are savvy newspaper veterans. They certainly wouldn't commit all of that money to a handful of top executives if the newspaper business was not thriving.

On my blog, The Turner Report on July 9, 2009, I described this kind of hubris in the following fashion, and the statement remains accurate eight months later:

The Internet hasn't killed newspapers, newspaper executives can see the real killers every time they look in the mirror.

Gannett newspaper head Bob Dickey and the meaning of shared sacrifice

When Bob Dickey, president of Gannett's Community Publishing division had to break the news in December 2009 that his employees would have to take unpaid furloughs in 2010, he let them alone they would not be alone.

"We are instituting the furloughs during the first quarter because it is traditionally the lightest time of the year for us. Non-union USCP employees, including me, will be furloughed for five business days during the quarter," Dickey told employees in an e-mail sent to all of the company's newspapers, including the Springfield News-Leader.

That spirit of sacrifice cost Bob Dickey $11,788.

Of course, Dickey could afford it. The calculation of his furlough amount came from his $612,981 base salary. According to a proxy statement filed in March with the SEC, Dickey's total compensation package for 2010 was $3,447,780, including a $600,000 bonus for his excellent work.

It remains to be seen what kind of bonus Dickey will earn this year. As noted in a post earlier today, Dickey, in another e-mail, told the employees at his newspapers that 1,400 of them are being let go, including 18 at the News-Leader. From the memo:

National advertising remains soft and with many of our local advertisers reducing their overall budgets, we need to take further steps to align our costs with the current revenue trends. Each of our local media organizations faces its own market conditions, challenges and opportunities. Therefore, it has been up to each local publisher to determine his or her unique course of action.


While we have sought many ways to reduce costs, I regret to tell you that we will not be able to avoid layoffs. Accordingly, approximately 700 employees within USCP, or about 2% of our company’s overall workforce, will be let go. Publishers will notify people today and we will make every effort to reach everyone by end of day. It is important to note that these decisions do not reflect individual performance and we thank and respect those employees for their work. We will do everything we can to help them and to minimize the impact on our other employees going forward. In an effort to reduce the number of people being let go, there will be furloughs in the coming months but they will be limited only to those on the USCP corporate payroll who make over a certain salary. You will be notified by your publisher if you are among this group.

Obviously, Dickey will be among those who will have to take a mandatory furlough. Hopefully, it won't cause any hardship for his family.

Since the furloughs appear to be limited to the company's newspaper division, they likely will not affect Dickey's superior, Gannett CEO Craig Dubow, whose 2010 compensation was over $9 million.

Gannett newspaper head: Our newspapers are great, but we're cutting 700 jobs and ordering mandatory furloughs

 Gannett, the nation's largest newspaper company, is firing 700 workers, including 22 at the Springfield News-Leader, as well as ordering another round of mandatory furloughs (or two) during the remainder of 2011.



To: All US Community Publishing employees


From: Bob Dickey

As we reach the mid-point of the year, the economic recovery is not happening as quickly or favorably as we had hoped and continues to impact our U.S. community media organizations. We have made continued progress on the many initiatives underway to seek new sources of revenue, build a world class sales force and better serve our customers through watchdog reporting and stronger Sunday newspapers. While we are seeing improved circulation results and audience growth, weakness in the real estate sector, slow job creation and now softer auto ad demand continue to challenge revenue growth in the division.

National advertising remains soft and with many of our local advertisers reducing their overall budgets, we need to take further steps to align our costs with the current revenue trends. Each of our local media organizations faces its own market conditions, challenges and opportunities. Therefore, it has been up to each local publisher to determine his or her unique course of action.

While we have sought many ways to reduce costs, I regret to tell you that we will not be able to avoid layoffs. Accordingly, approximately 700 employees within USCP, or about 2% of our company’s overall workforce, will be let go. Publishers will notify people today and we will make every effort to reach everyone by end of day. It is important to note that these decisions do not reflect individual performance and we thank and respect those employees for their work. We will do everything we can to help them and to minimize the impact on our other employees going forward. In an effort to reduce the number of people being let go, there will be furloughs in the coming months but they will be limited only to those on the USCP corporate payroll who make over a certain salary. You will be notified by your publisher if you are among this group.

These have been extremely difficult and painful decisions to make. I know the impact is felt by everyone within USCP and companywide.

I appreciate and thank you for all that you do to create and deliver award-winning journalism to our customers and communities every day. Even under these challenging circumstances, I know you will continue to do so and your efforts are greatly appreciated by our customers and colleagues within Gannett.

As always, please feel free to email me directly at rdickey@gannett.com with any questions you may have.

Regards,

Bob

Times are tough for new Gannett CFO

If you are looking for a poster child for the current economic crisis that has enveloped our country, look no further than Paul Saleh.

Hard times have fallen on Paul Saleh over the past few years, and in an act of desperation this week he latched onto the best job he can find. Though skeptics claim that these jobs should be outsourced because Americans simply won't do them, Paul Saleh is a different breed. He is a man who firmly believes that hard work builds character.

So, hat in hand, this week Saleh took a deep breath and became the new chief financial officer of Springfield News-Leader parent company Gannett, the largest newspaper chain in the United States.

It's not the kind of money Saleh is used to, but in this seller's market, you have to take whatever is available. It was only three years ago that Saleh was at the top of his game, earning more than $6.3 million as CFO of Sprint Nextel. For a brief time, he even served as the company's interim CEO, but when the new CEO came to town, he had incredibly high expectations. He actually wanted Saleh and other top management officials to stop bleeding market share to Verizon and other competitors. So that put Saleh out on the street, a proud man pounding the pavement looking for anything to keep his family fed and clothed.

Finally, Saleh got in on the ground floor on a new management firm, Menza. And after about two and a half years (or two and a half Mensa), Saleh is back in business.

With that decision came an enormous sacrifice. SEC filings indicate Saleh is going to start at a rock-bottom $600,000 a year, less than 10 percent of what he made during his salad days. Of course, the philanthropists who run Gannett are helping tide him over with a $150,000 signing bonus and options to buy 180,000 shares and 65,000 restricted stock units.

And if Saleh happens to lose his job, the caring folks at Gannett will help him make a smooth transition into his next employment. The SEC filings indicate he will receive a going-away present of $600,000 plus the average of his bonuses over a three-year period.

It's a tough sacrifice for Paul Saleh to make, but sometimes to get back to the top, you have to start on the ground floor.

But in a supportive environment such as the one he will find at Gannett (don't pay attention to those naysayers who are upset because 130 jobs were recently eliminated at USA Today with no $600,000 cushion to and on, or positions have been trimmed at the Springfield News-Leader and the rest of Gannett's newspapers and don't listen to those whiners who are upset because they have had to take unpaid furloughs two or three times), don't be surprised if Paul Saleh, who was also a Disney official at one time, will find plenty of reason to whistle while he works.

More furloughs for Gannett newspapers

Employees at the Springfield News-Leader and other Gannett newspapers will be taking another unpaid, week-long furlough during the second quarter of 2009, company officials have announced:

"We are about to begin the second quarter without any real relief in sight from this unprecedented economic downturn and its challenge to our company," said Gannett Chief Executive Craig Dubow in a memo to employees Monday.

"Despite all of your truly remarkable efforts to reverse the trend, our revenue numbers continue their downward slide and we have been faced with more difficult decisions," he said.

Gannett will force its employees to take unpaid time off so the company can cut costs in April, May or June. Most workers will take off for five days, but unlike a similar measure taken by the company in its first quarter, the duration of the unpaid time off will vary by division or location, depending on the division's operating needs and results.

Dubow and other top-ranking officials will participate in the furloughs, the memo said. Of course, a week off for them doesn't hurt them anywhere near as much as it does those on the lower end of the chain.

Blog offers assessment of Gannett furloughs

Reflections of a Newsosaur, a blog written by former San Francisco Chronicle and Chicago Sun-Times editor Alan D. Mutter, offers its assessment of Gannett's company-wide edict that all employees take one week off without pay this quarter:

Assuming Gannett’s payroll is equal to 20% of its $7 billion in revenues in the last 12 months, then one week’s payroll is worth about $27 million. If the salary of the average employee is $45,000 per year, then the company would have to eliminate some 600 jobs to achieve the same level of savings as the furlough.

Though I have no problem believing Mutter's accuracy, I do question the need for the furlough when the company's own figures show nearly all of its properties, including the Springfield News-Leader, have been making a profit. Again, it appears the workers have been sacrificed on the altar of the shareholders.

No mention of Gannett executive bonuses in AP report

Associated Press apparently just printed the news release and did not bother to read the proxy statement in its coverage of Gannett today.

Most of its report was filled with projections for future earnings from officials, who painted a rosy picture for the company which owns the Springfield News-Leader. Buried at the bottom of the story was this paragraph:

Gannett notched its largest profit of 2009 in the fourth quarter, helped by cost cutting and a slower ad decline. It earned $133.6 million on revenue of $1.49 billion.

Nowhere is it mentioned that CEO Craig Dubow, who is in fact not mentioned in the article, and other top Gannett executives received millions of dollars in bonuses earned by the elimination of more than 6,000 jobs and the requirement that all employees take two weeks of unpaid furloughs.

Gannett, News-Leader employees ordered to take furloughs

It's back to normal for Gannett, which will require its employees at newspapers across the United States, including those at the Springfield News-Leader to take an unpaid one-week furlough at some point during the first quarter.

Gannett executives said the unpaid time off is in response to revenues that remain short of where they were a year ago.


"This was, quite frankly, an option I had hoped we could avoid," Bob Dickey, president of Gannett's U.S. Community Publishing .

News-Leader publisher says newspaper will survive, but makes no mention of furloughs

While I am sure Springfield News-Leader Publisher Tom Bookstaver, in a column in today's edition, is sincere when he says the newspaper iis "strong and healthy," it would have been nice if he had addressed some moves the corporate heads at Gannett have made in recent months.

Not once in the column does Bookstaver mention the two weeks of unpaid furloughs that every News-Leader employee has had to take. Is this an indication of a problem throughout the Gannett chain or is this just another one of those cases where local readers have had to settle for less because of companywide problems?

I have no doubt that Bookstaver fully believes what he writes:

Let me assure you - we are going to be here for a long, long time. There still appears to be no end in sight to people having a strong desire to know and understand what's going on in their community. Unless that stops, we will be here. We reach over 75 percent of adults on a weekly basis and will continue to do that with our growing family of products.

Of course, it would be nice to know how Bookstaver arrived at that 75 percent figure. If his newspaper is truly reaching 75 percent of adults, he needs to tell his secret to other newspapers, especially in his own company, so that they can duplicate that kind of success.

Gannett to axe 1,400 employees by next Wednesday

Gannett newspapers, including the Springfield News-Leader, already hammered by layoffs and two unpaid furloughs, are being hit again.

A memo sent to newspaper publishers from division head Bob Dickey Wednesday spelled out what is coming:

To: U.S. Community Publishing Employees
From: Bob Dickey

I want to talk with you about our restructuring efforts, as we continue to battle these difficult economic conditions and the impact on our advertisers. With your help, our various cost savings initiatives are making a difference.

Nevertheless, we will need to implement job reductions to align our resources with the revenue realities we face. Currently each location is finalizing its plan, taking into consideration the local economy, results so far this year and the prospects going forward.

Each plan is different and designed to address the ongoing local needs. All of them, however, involved extremely difficult decisions. Approximately 1400 employees will be impacted by the job reductions across the division. Your publisher or general manager will communicate the local plans, and we expect the vast majority of the reductions will take place by July 9. In a select few cases, the implementation may take longer. There will not be any furloughs for the rest of the year.

I want to stress that the job reductions are not a reflection on these employees or their work. We truly value their many contributions and thank them for their efforts over the years.

Unfortunately, we must take these steps because the advertising environment remains challenged. There have been some promising signs of a recovery, but the reality is the improvements are not broad-based and the economy continues to be fragile.

Even so, we know the economy will improve. To be ready, we need to continue our transformation and maintain a strong financial position. We must publish our newspapers, produce our Web sites and pay down our debt. By taking all these steps today, we will be stronger tomorrow.

Measured against our peers in the media industry, we are healthy and capable of moving forward. We are in this position because we have proactively responded to the financial conditions with actions such as these.

We continue to see good ideas coming from all of you, and we are becoming more innovative everyday. This combination of forward thinking and good fiscal management will, I believe, ultimately result in a return to success for our company.

So, please keep those thoughts and ideas coming. As always, you can email me or call with your comments.

Anyone with information on the News-Leader, e-mail me or leave a comment.

Forty-one percent pay hike for Gannett CEO

When the Springfield News-Leader's parent company Gannett lifts its company-wide pay freeze in April, does anyone want to bet that employees will not receive 41 percent pay increases?

That's what an Associated Press analysis shows Gannett CEO Craig Dubow received a 41 percent pay increase in 2009, including pay, bonuses, and perks, which would seem to call for an end to the company's efforts to make it look as if Dubow was suffering along with his employees, when he cut his base pay from $1.2 million to $1 million.

At the same time Dubows pay increased 41 percent, he was firing more than 6,000 employees and requiring all other employees to go through two weeks of unpaid furloughs.

Link provided to Gannett quarterly conference call transcript

You won't find any hard-hitting questions from business reporters about the bonuses offered to company executives, including CEO Craig Dubow, at a time when many are losing their jobs and all are having to take unpaid furloughs, but you can read the transcript of Gannett's quarterly conference call at this link.

Blog notes problems facing Springfield News-Leader owner

Reports noting an improved bottom line at Gannett Co., owner of the Springfield News-Leader, are somewhat misleading, Alan Mutter writes in his Reflections of a Newsosaur blog.

Mutter, a former editor at the Chicago Sun-Times and San Francisco Chronicle, points out that the profits came as a result of company cutbacks, including layoffs and the furloughs that all company employees were required to take:

Gannett’s inability to reduce costs fast enough in recent years to sustain its traditionally high operating margins illustrates the grave challenge facing the newspaper industry:

Unless ad sales rapidly and vigorously rebound, the unavoidably high fixed costs associated with printing and delivering newspapers eventually could eat publishing companies alive.