Gannett CEOs since the company was founded in 1906, from top row: Frank Gannett, Paul Miller, Al Neuharth; bottom: John Curley, Doug McCorkindale, Craig Dubow.
With history as a guide, Gracia Martore's recent promotion to president and chief operating officer makes her a natural candidate to replace CEO Craig Dubow -- possibly, fairly soon.She certainly has the experience: An employee for 25 years, and chief financial officer since 2003, Martore (left) was made acting CEO by the board of directors during Dubow's medical leave of absence last summer. Moreover, insiders have always been favored: The company's five CEOs since Frank Gannett died in 1957 all rose through the ranks. Dubow has been CEO since 2005, and chairman since 2006.
Across Corporate America, CEO turnover has been rising for years, according to Forbes magazine. Their average tenure fell to 4.8 years in 2009 from nine years in 1990. Dubow, 55, still recovering from two rounds of back surgery, will have been CEO five years in July. His predecessor, Doug McCorkindale similarly served five years. (See chart, below.)
Corporate boards like to keep their options open, so they seldom formally declare a successor in public. Instead, they telegraph their intent to Wall Street via promotions such as Martore's. Directors are known to switch horses, too. Then-USA Today Publisher Tom Curley was widely seen as a successor to McCorkindale until his unexpected departure in 2003 to become CEO of the Associated Press. Age, too, can be a factor. Martore is 57. With rare exceptions -- McCorkindale, for example -- mandatory retirement age is 65.
Her 'tremendous financial skills'
True to form, Gannett's board played their intent close to the vest when Martore got promoted Feb. 1. Directors didn't explicitly anoint her Dubow's heir-apparent.
"Craig has brought new vision and direction to our company,'' lead outside director Karen Hastie Williams (left) said in a statement. "As the economy continues to move ahead, we look forward to furthering the many changes under way and setting the course for what our company will look like in the years to come. This move will allow Craig to concentrate on Gannett's long-term strategic planning while Gracia manages the day-to-day operations of the business. Craig and Gracia have been exceptional leaders for Gannett and work in tandem as an outstanding team."Whatever the board's hedging, Martore's intimate familiarity with GCI's capital structure as finance chief could give her an edge. After all, companies in shrinking markets depend more on cutting costs to maintain profitability. "She has tremendous financial skills and extensive knowledge of our business operations,'' Dubow said in announcing Martore's elevation. "She's earned this opportunity and I couldn't be more pleased that she will serve as our president and COO."
Moreover, Wall Street isn't expecting dramatic changes in GCI's strategic plan -- indeed, investors don't want that. They seek steady, reliable profits, the sort Gannett once delivered. For that, you need an executive who can manage earnings and who has the intestinal fortitude to make tough decisions, such as laying off thousands of employees. That describes Martore to a tee.
Who would you like to see as the next CEO? An insider? Someone from outside? Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.
"Strategic planning" is often a code-word for m&a, and Dubow made a point of telling the financial analysts that m&a responsibility was staying with him.
ReplyDeleteI don't know if that's significant. But frankly it didn't appear to me like Dubow was left enough to do for what they are paying him, unless he comes up with an eye-popper of a deal, or they expect the situation to not last very long (say not much more than a year).
It could be a way to ease him out while providing some support to Gracia while she gets her sea-legs.
It could be a way to restructure the executive team so if Gannett became somebody's else property Craig could ride off into the sunset with his golden parachute and Gracia could run the Gannett piece inside a larger entity.
I would look for Dubow to give up the CEO's job within a year, maybe less, depending on his health recovery. He'd then stay chairman for perhaps another year -- that's been the pattern in past successions. Then, finally, Martore would be named chairman.
ReplyDeleteOr, not. The board could reach down in the ranks for a younger candidate, or one with different experience. Laura Hollingsworth in Des Moines or Michael Kane in Indianapolis are possibilities. Chris Saridakis lacks operational experience on a big scale, so that's a problem, but he's the most skilled in digital on the Gannett Management Committee.
This is a very cautious, conservative board, so it seems unlikely they would go outside the company -- unless big investors press for that.
If they look inside of the executive ranks, then they really only have Saridakis to choose from if the board wants to really make a change. He is young, smart and has built many successful businesses. The board might not want to take a risk and make such a dramatic change. Interestingly, Saridakis does not have any political ties to anyone in Gannett (which I am not sure helps or hurts him as a candidate).
ReplyDeleteThey could go with a Steady Eddie like Bob Dickey and not rock the boat, then they would be able to go back to their roots as a newspaper company. I would think that before they would choose Hollingsworth or Kane, they would choose Mr. Dickey. No disrepct to Hollingsworth and Kane, but they are over their heads with their current jobs.
I would say that Jack Williams, David Lougee and David Hunke could be interesting choices for very different reasons, but Mr. Lougee is almost a guaranteed "no" as we already have a "broadcast" executive as the CEO and we see where that got us.
As for Mr. Hunke, he is an old timer and an old fashioned newspaper publisher that lacks broad experience. Although Mr. Hunke does have a good understanding of unions, he would need to prove his ability to move USA Today forward.
As for Mr. Williams, not sure he has respect among the employees and he is not an operator. I do not know him well, but I think he is least possible.
Maybe they are splitting up the "day-to-day" role (President & COO) so they can bring someone that can grow Gannett and move it forward in the digital realm, while someone manages the cash register (Martore).
I think it would be difficult for Gracia Martore to be named CEO as she does not appear to have any practical sales, marketing, product experience on any scale.
I think you are right Jim. Saridakis would be the obvious choice, but the board might be too conservative to choose him or even look outside of this executive team.
The Executioner will be just as greedy, as McCorky was, to take over as CEO and President. No way will it be an outsider; there's no room for anyone to outsmart her and the rest of her mafia.
ReplyDeleteI don't think there is any question they don't want to lose Martore at this point, because Gannett needs her too badly to continue to manage the debt issues the next few years. So one could look at her new gig as both potential stepping stone, or as consolation prize if she doesn't get the top job. They may be trying to preserve their options while Martore trains up a new CFO far enough to not be quite as nervous about what happens if she walks.
ReplyDeleteExcellent points. 5:11 pm raises another question: Will the next CFO come from inside, or outside? Is Evan Ray a possibility? Meanwhile, what will it be like to hold that job while Martore is watching over their shoulder?
ReplyDeleteIf you'll recall, Gary Watson was considered a front-runner to succeed McCorkindale. When Dubow out-maneuvered him and jumped over from the broadcast side, Watson bolted. That said, I figure Martore has the inside track. She knows where all the bodies are buried. The next few years are going to be rough (if the company even survives) and those in charge of picking CEOs won't want a newbie looking under rocks.
ReplyDeleteJim said...
ReplyDeleteExcellent points. 5:11 pm raises another question: Will the next CFO come from inside, or outside? Is Evan Ray a possibility? Meanwhile, what will it be like to hold that job while Martore is watching over their shoulder?
2/18/2010 5:19 PM
Now, Jim, I thought you were smarter than that. Evan Ray? I just cannot imagine Mr. Ray taking the reigns of Gannett and Bob Dickey reporting to him. That would be fun to watch! That job will go to Michael Hart, hired by Gracia personally and groomed for this position. Trust me, Gracia wants somebody from her clique - that's what Gannett is famous for. And as next CEO & President it will be Gracia. The board is eating out of her hand. As one poster already mentioned they need her to manage the debt (in whatever disastrous way looking back) and what better way than to use a bean counter? Practicality before Innovation. That's the motto now and will be for a long time.
Michael Hart as CFO? You've got to be kidding me! These comments are way too funny!!!
ReplyDeleteIt's financial and it's digital. Nobody with a print-based background has a chance.
ReplyDeleteWho would I like to see running the company? Someone with a heart, brains and the nerve . . . to undo what's been done on the past few years!! Oh, I forgot, this is not OZ.
ReplyDeleteHey 12:06 PM
ReplyDeleteTell me please. How would you label Jim Hopkins? Does he have a digital or print background?