CEO Craig Dubow and his hapless sidekicks will likely get multimillion-dollar payoffs known as "golden parachutes'' if they leave Gannett unwillingly. Corporate raider Carl Icahn, now dueling with Yahoo's management, wrote about them yesterday on his blog.
"A golden parachute is a binding agreement between a company and an employee (most often a CEO but in some cases all the employees) detailing considerable benefits for the employee if the employee is terminated or retires," Icahn writes. "The overwhelming flaw with this system is that they may secure an egregious level of compensation regardless of performance. This is absurd."In an e-mail, one of my readers says: "If I read Carl's blog right, the golden parachute is established when the individual is hired -- not when they leave. I wonder if shareholders can get access to all details of the contract, including the parachute Craig stands to earn upon his departure. And I agree with Carl: these are ludicrous given the significant size of the annual salary and bonuses."
Contemplating Dubow's exit strategy isn't just wishful thinking: The company's steep quarterly losses Wednesday sent GCI shares into a tailspin, adding to the billions of dollars in lost equity over the past year. The company's stock is now down nearly 70% from a year ago.Does anyone have access to Dubow's employment contract, with details of his severance agreement? Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.
Earlier: GCI's market value has now dipped to $3.8 billion. Plus: Progress -- GCI stock on Dubow's third anniversary
[Photo of Dubow: Gannett]
I would not be surprise if little Dubow's contract surprises, plus others, are published somewhere. Just not here and not now?
ReplyDeleteSince they are public information, I would guess any mediocre reporter would put their hands on them in minutes. Why anyone would care, though, is only a mystery. If as you say, they are signed upon hire, they are no different than any pre-hire negotiation. So what's the big deal.
ReplyDeleteObviously, there are a lot of excessive ones out there --- Home Depot comes to mind --- but really, would you do anything different if you were presented with the opportunity? Fact is, the average tenure of CEOs hired since 1990 is less than 6 years according to a report I read.
The deal is, down in the trenches, few of us even have the opportunity to negotiate our daily wage, let alone our severance contract.
ReplyDeleteIn the newsroom, the attitude is that we should be grateful for the job and our 1% to 3% raise as a reward for a year full of 60-hour weeks. We are shuffled around, from job to job, regardless of our desires or talents. We're the pegs expected to fit corporate's square, round and triangular holes. If we don't like it, we can leave. Sit down, shut up and write something we want in the paper tomorrow.
I suspect the reason the company quit printing the annual report and sending it around to newsrooms for the newsies to read was that they were embarrassed about how much the upper echelons received for their labors and how little they were paying us.
I remember feeling sick to read that one of the CEOs received millions of dollars the year I got bumped UP to $24,000 at a smaller Gannett paper.
A buyout ... "here, take some money and go away" ... is the closest thing to a parachute a newsie can pray for.
Seems all the information is readily available under "investor relations" on the Gannett site. Go to the executive compensation committee report in the proxy statement.
ReplyDelete"Why anyone would care, though, is only a mystery."
ReplyDeleteThanks for stopping by, Craig.
Here's my question: Is anyone hearing any noises about regime change or sale of the company from the large institutional holders of Gannett stock? They seem weirdly quiet. What about that California-based AXA company that recently bought a lot of stock? When Tribune Co. and Knight Ridder stock fell to record lows, the big investors took swift action.
ReplyDeleteDubow- $36,294,236
ReplyDeleteGracia-$18,262,467
Davidson-$11,692,985
Moon- $13,015,870
So the company would have to pay out about $80 million to get rid of the top 4. That's a kind of poison pill right there.
ReplyDeleteHas anyone tried to communicate directly and confidentially with the board? Gannett extends that invitation to shareholders and other interested parties. (Or at least that's what it says on the official Website)
ReplyDeleteFor the record, Gannett's stock price is down 57% from a year ago. Jim keeps saying 70% ... Not that 57% is anything at all to cheer about. But I fear if we let Jim get away with lazy facts on the easy stuff, like this, he'll take great license with the bigger issues...
ReplyDeleteI learned long ago on this blog Jim plays fast and loose with "facts" and slants numbers and data to fit whatever negative model he is spinning that day.
ReplyDeleteGannett's stock closed at $53.49 on july 18, 2007 and $16.87 yesterday. Would you please, Anon 6:30PM, tell me how you get your 57%?
ReplyDeleteThanks.
Yeah!
ReplyDeleteWhat Anon 7:35 PM said!
It was higher ... a lot higher.
Now it is low ... a lot lower.
That, you tiresome nags, is the point.
imagine what the $80 mil parachute money could do if invested in:
ReplyDeletemore reporters/copy editors/photographers/artists
cell phones/laptops/cameras/training
work on perfecting e-paper. (imagine getting your newspaper on something that looks like tabloid-size paper, downloads via cell phone technology like a kindle and folds and tucks into your purse or briefcase to be read on the bus. yes, e-paper will be too expensive for most people to buy outright --BUT buy them by the thousands and LEASE them to readers on autopay and keep the content of the paper from which it is leased "free" -- users could download other papers for a subscription fee.
nah, better to keep on doing the same old stuff and going down the same old tubes, right craig?
To @6:30 p.m. and @7:03 p.m.: For the record, here's the data, and the results:
ReplyDeleteGoogle Finance says Gannett closed at $51.81 a share on Friday, July 20, 2007. It closed at $16.87 this past Friday. That's a decline of 67.4%. Here's the formula: (51.81-16.87)/51.81, which you can see here: http://tinyurl.com/55xoyf
Now, when I use Google's graphics tool -- where I can't see the raw data -- I get a slightly higher percentage decline: 69.5%. Here's how Google shows it: http://tinyurl.com/6klhe4
So, whether it's 67.4% or 69.5%, the results support what I wrote: The company's stock is now down nearly 70% from a year ago.
Now, it's your turn, @6:30 p.m. What's your data source?
And 7:03 p.m.: If you think I play "fast and loose with the 'facts,'" why do you read this blog?
Do you suppose the posters who calculated the stock decline at 57% rather than the correct 70% down figure are the ones who did the math on all those incorrect pension statements?
ReplyDeleteHi-yo!
ReplyDeleteNumbers don’t lie, people do. And, apparently some readers of this blog want to do just that.
ReplyDeleteContinuing to attack the messenger shows some are either incapable of doing the math or worst yet, trying to obfuscate the depths to which Gannett has declined. Either you don’t want to hear it or you’re incapable of dealing with it even if you do – both, traits of Gannett’s top leadership.
Sorry to burst bubbles more, but the decline started well before the internet challenge and recent economic conditions. And, even if the strategic plan works – which shareholders have confirmed it won’t, Gannett’s still too big to act small and nimble, let alone strong enough to look at its own character to finally rid itself of those who’ve wreaked havoc and acted badly for too long. And, my guess is that the latter is a little too close home for the attackers.