The directors: Starting on the top row, left to right, with powerful executive committee members in boldface: Dubow, Elias, Harper, Louis, Magner, McCune, McFarland, Shalala, Shapiro and Williams.
Weighing an unprecedented dividend cut, Gannett's board of directors has shifted dramatically under Chairman Craig Dubow, the chief executive since 2005, public documents show. Except for Karen Hastie Williams, a board member since 1997, few of Dubow's other nine co-directors have much history with GCI. That's good or bad, depending on whether you want directors voting with their heads -- or hearts, during their two-day meeting, which starts today.Six of the nine directors joined after Dubow became CEO, so they may be unduly swayed by him because they owe their lucrative board seats to his favor. Corporate governance experts have long criticized such clubby boardrooms, saying their members function exactly the opposite as they should. These critics are especially scornful of companies like Gannett, which concentrate too much power by combining the board chairman and CEO positions.
Not so independent: Williams
I'm not persuaded Williams is sufficiently independent of Dubow to qualify as a strong enough presiding director, the de facto deputy chair. For one thing, Williams is one of three directors who were on the 2005 board that hired Dubow as CEO, then elected him chairman a year later. Her reputation is tied to Dubow's success -- or failure. (Duncan McFarland and Donna Shalala were the other two.)
Plus, it's hard to imagine Williams, 64, a retired Crowell & Moring attorney, can devote enough time to Gannett, given her directorships at four other large, publicly traded companies: insurance giant Chubb Corp.; Continental Airlines; WGL Holdings, parent of Washington Gas Light Co., and SunTrust Banks. Amid the finance industry meltdown, SunTrust alone could occupy her attention full-time; its shares are down 87% from a year ago.Boardroom basics 101
Directors represent shareholders, and management serves at their pleasure. The board retains a CEO; sets key compensation, and reviews big initiatives. Above all, its duty is guarding shareholder interests. Liquidity trumps sentiment (i.e., the First Amendment).
There are about 8,900 Gannett stockholders, but the board is principally concerned with the views of the biggest investors, including No. 1 AXA Financial of New York, and No. 2 Brandes Investment Partners of San Diego, Calif. They are "institutional" investors, managing money on behalf of small investors in mutual funds and retirement plans.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.
This is a quid pro quo board. Each selected by CD with a promise of Gannett cash & prizes (along with very little work or actual thinking required) in exchange for loyalty to the Chair. Shalala known for cleaning out her purse during the middle of a board meeting. That is her level of engagement and typical of the entire disengaged board.
ReplyDeletesix? you sure? i count only four since dubow became ceo.
ReplyDeleteHave you checked the dates when directors joined the board? I've listed them in the far-right column of the table with this post.
ReplyDeleteOnly 8,900 shareholders? Is there a zero or two missing from that statistic?
ReplyDeleteNo, that's probably right. If you have an account at Fidelity, and have a share of Gannett stock, and if I have 100 shares, that's still only one "Fidelity controlled shareholder". In other words there may be 100,000,000 shareholders, but if they have that stock in an account at a holder only the holder counts in the 8900 level.
ReplyDelete5:08 am: I double-checked the 8,900 shareholder figure last night, because it seemed too low to me, too. There are about 40,000 employees, so you would expect the number to be much higher. But it's not.
ReplyDeleteDoes this somehow miss the shares held by employees in 401(k) plans?
ReplyDeleteThe markets have already factored in a GCI dividend cut (Management sent a pretty clear signal a month ago that the dividend would be reduced) and if it's substantial, we can probably expect a nice bump in stock price. Not just Gannett, and not just the publishing industry, almost all companies are now looking to conserve cash in the tightest credit conditions any of us have ever seen.
ReplyDelete