Oh, what a difference four years makes! Business weekly Barron's gushed over GCI's prospects in its Dec. 1, 2003, cover story, "Gannett's Good News: A reviving ad market should boost the shares of a hungry media giant." (Paid subscribers should be able to get the story here.)
Gannett's stock traded at $86 a share at the time. Barron's portrayed then-CEO Doug McCorkindale (left) as an uber-confident media mogul on the prowl. Now, listen here: "Dow Jones is a great franchise, and if it ever came into play, I'd be very interested,'' he dictated to the weekly.Institutional investors were, of course, bullish: "This is a company with some of the highest margins in its business, some terrific assets and a proven first-class management team focused on doing the best for stockholders," said Henry Berghoef, director of research for the Oakmark Fund, which counted Gannett among its 20 holdings. "Not only should this industry see a good bounce back, but Gannett should bounce back harder and faster than others."
Or, not.
As we now know, McCorkindale's stewardship (Internet? Is that a new country club?) left Gannett in terrible shape when he turned over the CEO's job to Craig Dubow, 18 months after that Barron's story. Nonetheless, McCorkindale is still on the payroll: Gannett is paying him $150,000 a year for five years "to enable the company to benefit" -- totally LOL now! -- "from his many years of experience,'' the proxy report to shareholders for 2006 says. Plus, the board of directors also gave him that $1.3 million parting bonus, just for being an all-around swell guy.
And whither his coveted Dow Jones, owner of Barron's and The Wall Street Journal? News Corp. Chief Pirate Rupert Murdoch snapped up that sucker -- and is now using it to threaten Gannett flagship USA Today. As Barron's noted last year, in an April 9 follow-up: Given industry challenges, GCI might have to rethink its conservative financial and corporate strategy. Unlike the New York Times Co. and Washington Post Co., Gannett doesn't have a controlling family or super-voting stock. "If the company doesn't move, it could attract activist investors who would seek to force change,'' the story said.
Postscript
I decided Barron's was drinking the Kool-Aid in 2003, so I sold all my Gannett stock -- some $25,000 worth -- a few days after that story was published. I now own just enough to be admitted to the annual shareholders meeting, scheduled this year for April 30.
Maybe someone who is not a Gannett employee, but still a shareholder (HINT, HINT), could inquire at the meeting about specific examples of vision and leadership from Dubow in 2007. I mean, given his whopping $1.7 million bonus, there ought to be plenty of examples, despite the huge decline in stock price. Why else would the board grant him the bonus?
ReplyDeleteYes, attend the shareholder's meeting and ask some tough questions -- if they let you.
ReplyDeleteAlso, how much stock ownership is required for the privelege of attending a shareholder's meeting?
I thought I opted out of buying GCI stock when I worked for a Gannett paper, but looking at my 401k papers, I apparently own some of the turd stock. It's the biggest loser in my portfolio.
Congrats to Doug. He bailed before his stock portfolio became worthless. He supported Watson and his regime of fear. Life at Corporate was like walking around on eggshells. The demeanor today may not be as harsh...but the culture, and the reputation remain the same.
ReplyDeleteWhat's the tee time today Doug? Lunch comes off the back of your loyal servants.
This isn't the first time that commentators of the Gannett Blog have expressed surprise in GCI stock ownership ... even though they didn't "buy" it.
ReplyDeleteIt's your company match, folks.
The 25% of the first six percent that they gift you for contributing to your 401k is paid in GCI stock. And with today's prices, the share numbers are growing.
If the GCI stock ever appreciates, rises to even half its former value, that will be a good deal.
But if you're a person who wants to retire but who saved GCI in your 401k portfolio at $86, you are SOL ...
Can Doug help out on the sale of under-performing assets? How about $2 per share? Worked for Bear Stearns and the Feds...thanks to your money. Shall we start with Nashville or Phoenix?
ReplyDeleteIsn't it interesting that McCorkindale was award a lump sum "CASH" payment instead of stock options because he already owned so much GCI stock upon his retirement.
ReplyDeleteWhat about the Fiduciary responsibility of those at corporate in charge of the 401K program. Is forcing GCI stock in lieu of "CASH" as the company match legal? The stock becomes worth less as soon as it hits your 401 K account.
I for one lost significant $$$
in my GCI stock before we were allowed to move it to other investments in 1995.
How much have you lost in your 401K
Gannett stock?
...does not compare with the stress, pain, and dispair. Ask those who tried to make new adjustments, new careers, and re-engineered lives.
ReplyDeleteBut life outside is very, very well worth it.
Show me the love Doug!!!
When I get my quarterly 401k statement, first thing I do is go online and shift the Gannett stock into other funds.
ReplyDeleteNot necessarily hatin' on GCI -- it's just that as a general rule, it's a lousy idea to have a large chunk of your retirement savings invested in your company. Ask the folks at what was Enron.
Damn I'm glad I dumped all my Gannett Stock! Unfortunately, I waited until right before I quit - I lost thousands of dollars within the last six months alone. Good luck Gannetteers. If Murdoch buys it and splits it up - or, God forbid, Sam Zell, (who probably won't since he has that other nightmare on his hands) or the shareholders force a sale, you guys really will be SOL.
ReplyDeleteI am SO GLAD I LEFT.
Speaking of 401(k)s and such -- I worked for Gannett for 6 years, leaving in '95. Some months after I left the company, I was surprised to get a letter informing me that I was vested in the pension plan and qualified for $288 a month at retirement age (which, for me, is in about 15 years).
ReplyDeleteI wonder if Gannett will be good for my $288 by then?