Monday, April 11, 2011

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 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.

1 comment:

Anonymous said...

This is a sad, altogether common story in the newspaper industry. Corporate leadership in America has lost their way. Whatever happened to stewardship, and making money slowing over time? These executives are over paid. Worse, they seem to have an attitude of entitlement. Kind of like Charlie Sheen, don't you think?