At one time, it was called firing workers, then to the more genteel it became downsizing, but even that was too good for GateHouse CEO Michael Reed. In a company report filed November 2, Reed (pictured at left) used a new term that certainly makes the act seem much more civilized:
Over the past several years, and in furtherance of the Company’s cost reduction and cash preservation plans outlined in Note 1, the Company has engaged in a series of individual restructuring programs, designed primarily to right size the Company’s employee base, consolidate facilities and improve operations. These initiatives impact all of the Company’s geographic regions and are often impacted by the terms of union contracts within the region. All costs related to these programs, which primarily reflect severance expense, are accrued at the time of announcement.
Apparently, that right sizing was just the right size for GateHouse's Board of Directors.
Michael Reed, whose management of GateHouse Media continues to leave the company billions in debt, received a $750,000 bonus, including information that was buried at the bottom of the company's annual report, filed March 2 with the SEC.
President and Chief Operating Officer Kirk Davis pulled down a cool $275,000, while Melinda Janik, senior vice president and CFO received $160,000, senior vice president, secretary, and general counsel Polly Sack, $140,000, and Mark Maring, treasurer, $80,000. The top five Gatehouse officials were awarded $1,415,000.
Last year, Reed received a $500,000 base salary and a $500,000 bonus giving him a cool million. This year, he will receive at least $1,250,000.
Unlike the reporters, advertising salespeople, and others who have fallen victim to his "rightsizing," Reed has absolutely no worry about losing his job. If the company sells and the new owners send him packing, Reed is guaranteed three quarters of a million, including $500,000 in severance pay, a $200,000 bonus and continued health insurance payments.
COO Kirk Davis isn't far behind Reed. SEC records indicate Davis will receive $726,000 if new owners rightsize him, including a $461,000 severance payment and a quarter of a million dollar bonus.
GateHouse Media must be doing extremely well since this year's bonuses are over a quarter of a million more than the company awarded in 2010. At that time, Reed received a half-million dollar bonus, more than twice the $200,000 bonus stipulated in his contract. Ironically, that bonus was awarded the same time the GateHouse CEO trumpeted the news that his company was initiating more cost-cutting moves:
“We are in the process of implementing additional cost saving initiatives in order to better align our overall cost structure with current revenue trends.”
Not surprisingly, Reed did not mention the half million dollar bonus as he was talking about downsizing, whoops, rightsizing valued employees and shortchanging the customers at the more than 300 newspapers owned by GateHouse, including The Carthage Press, Neosho Daily News, and Pittsburg Morning Sun.
How can we expect the media to give us the lowdown on what is going on in today's economy, when the head honchoes of the media company are riding the gravy train while steering their products down the path of destruction?
(Note: The first source, and sadly, the only source until now to report on this, was Billy Dennis in Peoria, another town that has been slighted by GateHouse Media. Check out his story at this link.)