Two new directors
In electing Howard Elias and Scott McCune, the board is adding two men with expertise in technology and marketing, areas where Gannett sure could use some help. Elias is an executive vice president at EMC Corp., a giant hardware and software maker. McCune is a vice president at beverage giant Coca-Cola Co. (McCune apparently is taking the seat left vacant last spring after Coke executive and GCI director Charles Fruit died.)
I'm a little surprised that Chairman and CEO Craig Dubow (left) would want to bring two new players on the board when there's already so much upheaval in the company. But maybe that's the point: He wanted more advice. Or, perhaps Dubow agreed to expand the board at the request of other directors.In any case, the board has now grown to 10 members.
(Corporate governance 101: a company's board of directors looks out for the interests of shareholders by hiring and supervising key executives, starting with the chief executive officer. Directors also review and approve major business deals, and other strategic initiatives.)
Dividend payout
The board approved payment of another 40-cent dividend -- punting, apparently, any decision about reducing the payout until a later time. Chief Financial Officer Gracia Martore suggested strongly last week that the dividend might be cut when the board met this week. Whether directors gave that serious consideration is unclear.
Speculation about a dividend cut focused on Gannett's unusually rich yield: nearly 15%. Investors were clearly happy with today's news: GCI's stock closed at $10.76 today, up 82 cents, or 8.3%.
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I'm confused. Electing three board members is on the agenda for the April, 2009 meeting. There's even a November, 2008 deadline given for shareholders to submit names for possible board members.
ReplyDeleteSo, who voted yesterday? Was it the current board or the shareholders? And, does the November deadline for submitting names still hold?
But I thought the were cutting the dividend. Help me understand why not. WHy wouldn't they want to make shareholders unhappy. Could it be the new directors insisted on waiting until they were trenched in before cutting it.
ReplyDeleteI voted last week. It was easy and fun, just like filling in HR forms.
Adding seats could be a defensive move in anticipation of a hostile takeover attempt. The current pps is tempting
ReplyDeleteIn any event, the major shareholders may have been involved/consulted in the decision to add board seats.
wow! 40-cent dividend again. let's see -- that means i'll get about $56 on the 140 shares i bought through the company plan (not 401k). other than that $56, their only value now is the big fat loss i'll take when i sell them. it'll help offset having to dip into my ira much sooner than planned, thanks to big g screwing w/my pension and health care.
ReplyDeletebut hey -- now we've got TWO MORE directors to pay fees and expense for. happy days are here again!
I have to ask, is there anything, anything, that would satisfy you 9:11 a.m.
ReplyDeleteHow about if everyone in command just left?
Then you could run the company.
You seem to have all the bright ideas. Let's see, how about cut the Board members down so we don't pay their fees, let's get Journal Register, McClatchy, Gatehouse, even NYT management in to run Gannett, that would be good. Heck all the other Newspaper companies are doing great while Gannett isn't. Let's do it.
Listen to Elias talk about EMC and IT management:
ReplyDeletehttp://www.emc.com/collateral/demos/microsites/mediaplayer-video/video-elias-ir.htm
Think about how many jobs might have been saved if Gannett paid a more realistic dividend.
ReplyDelete8:31 a.m.: How does expanding the board by two seats constititute a defensive move in the event of a hostile takeover?
ReplyDeleteScott McCune is a highly repected marketer who was with Anheuser Busch before Coke.
ReplyDeleteHe has played on the world marketing stage at a very high level.
By expanding the board by 2 seats: 1) it "packs" the board with people hand picked by Dubow who would resist a takeover, and 2) dilutes the voting power of individual director's votes in the event a challenger attempts to add one or more of its reps to the board.
ReplyDeleteThe Yahoo experience with Ichan may be a good case study.
Looking at it another way, why did GCI add seats versus replacing board members? GCI makes a case for the expertise of the new board members, but why add seats?
They didn't add seats. Didn't they go from nine to ten members?
ReplyDeleteOne member, Chuck Fruit, passed away and he is being replace by Scott McClune.
ReplyDelete