As fortunes sank, GCI paid director Williams $892K

[Gannett-paid fees to board's current nine independent directors]

Chairman and CEO Craig Dubow isn't the only one raking in big bucks from the board of directors, despite Gannett shares plunging 79% last year. Public documents reveal another group enriching itself, too: the directors themselves.

Led by Karen Hastie Williams (left), the nine independent directors have paid themselves $3.1 million in fees over the past 11 years. Williams, 64, the longest-serving, collected nearly 30% of the haul: $891,724, since joining the board in December 1997, Gannett's annual proxy reports to stockholders show.

Last year, the retired Washington, D.C., attorney got paid $167,887 in cash and company shares, the new proxy report says. That was on top of $223,144 Chubb Group said it paid her, in a new regulatory filing today; the insurance giant is one of four other companies where Williams holds board seats. She's also one eight directors up for re-election on the 10-person board at next month's annual meeting.

As a public company, GCI pays a board of directors to guard the interests of shareholders, by keeping an eye on management. Gannett's board elects a chairman and hires a CEO; sets key compensation, and reviews big initiatives. Above all, the board's duty is guarding shareholder interests. Dubow is the board's lone employee-member; as such he does not get paid director fees.

Actual amounts higher
In fact, GCI paid Williams and other directors more, according to my review this morning of GCI's 1997-2009 proxy statements, filed annually with the U.S. Securities and Exchange Commission.

For my review, I treated as income only the annual retainer fee paid to directors through 2005, when it was $45,000. I didn't count additional fees paid for attending meetings, or for serving as committee chair, because Gannett didn't break these out by director until 2006. That year, GCI started publishing a separate compensation table for directors, one that details each member's total fees and whether they were paid in cash or stock. Adding the earlier fees, Williams' income over the past 11 years approaches $1 million.

No. 2 on the list: Donna Shalala, 69 (left), a director since 2001. The former Health and Human Services secretary in the Clinton White House got paid at least $666,142. But that figure includes the estimated value of stock options that have declined in value with the share price.

Williams is the presiding independent director, a position akin to deputy chair that she's held since 2004; she is elected by the other non-employee directors. Williams also sits on more corporate boards than any of her co-directors -- four, taxing her ability to fulfill all duties. Among them: Chubb, which disclosed the $223,144 in 2008 fees to Williams earlier today, in a new fee table.

Since the start of her first full year on Gannett's board, shares have fallen 96% vs. smaller declines of 86% at New York Times Co., and 15% for the S&P-500 index, according to Google Finance.

Williams is among eight members of the 10-director board seeking re-election at the April 28 annual meeting. The other seven are Dubow, Shalala, Marjorie Magner, Duncan McFarland, Neal Shapiro, and the two newest members: Howard Elias and Scott McCune.

How they get paid
The compensation year for directors begins at each annual meeting of shareholders, and ends at the following annual meeting of shareholders, the proxy says. Here's the current fee schedule:

• Annual retainer fee of $45,000
  
• Additional retainer fee of $15,000 to committee chairs
  
• $2,000 for each board meeting attended
  
• $1,000 for each committee meeting attended
  
• a long-term award, of either 1,250 restricted shares or 5,000 stock options, granted on first day of compensation year
  
• travel accident insurance of $1 million
  
• a match from the Gannett Foundation of charitable gifts made by directors, up to a maximum of $10,000 annually

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