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.