The announcement, made moments ago, puts CFO Gracia Martore (left) more firmly in position to succeed Chairman and CEO Craig Dubow, 55, the company's top executive since July 2005. The news came as Gannett reported fourth-quarter earnings that exceeded expectations.But investors nonetheless hammered Gannett shares. GCI closed this afternoon at $15.02 a share, down $1.13, or 7%, according to Google Finance. It had been down nearly 13% earlier in the day. Barrington Research analyst James Goss told Reuters news service that he was impressed by the company's financial results and surprised at the stock decline. He suggested it could be a reaction to the stock's run-up since last spring, Reuters said.
In addition to her new duties as the company's No. 2 executive, Martore retains the CFO post until her replacement is appointed, and she will continue reporting to Dubow (left). In her new role, Martore will handle Gannett's day-to-day operations, while Dubow focuses on longer-term strategy. In addition to being chairman and CEO, Dubow held the president's title; the chief operating officer's job has been vacant for a number of years.In 2008, the most recent year available, Martore was paid about $1.4 million, including a $700,000 base salary plus a $300,000 cash bonus, according to the last proxy report to stockholders. Annual pay for Gannett's five highest-compensated officers in 2009 likely will be disclosed in mid-March.
Martore led layoffs, other cuts
GCI did not provide Martore's age in today's announcement. Forbes says she's 57. She has been with the company since 1985, and was named the top finance executive in 2003. In that role, she has been the chief architect of a series of cost-cutting campaigns that included broad layoffs last year and in 2008, as well as the consolidation of printing, accounting and other functions at central hubs across the nation. Martore's influence in recent years has been so great that some observers have regarded her as Gannett's de facto CEO.
There had been speculation in recent days that an executive shake-up was in the works because of Dubow's health problems; he took a medical leave of absence from June to October after receiving back surgery. During that period, Martore took Gannett's top reins. Her temporary appointment to that post, at a time of great challenges for GCI, suggested the board of directors saw her as the next likely executive to succeed Dubow once he leaves the 104-year-old company.
Other CEO contenders
"Craig and Gracia have been exceptional leaders for Gannett and work in tandem as an outstanding team,” Karen Hastie Williams, Gannett’s presiding board member, said in GCI's statement.
To be certain, my succession scenario isn't carved in stone. The board could consider other internal candidates, including Chief Digital Officer Chris Saridakis (left); he has been groomed for increasing leadership roles since he was appointed to the top digital job in January 2008.Martore's elevation comes as Gannett continues wrestling with turmoil in the digital transformation of the newspaper and television industries. Based in the Washington suburb of McLean, Va., the company is the nation's biggest publisher of newspapers, with 84 dailies in the U.S., including USA Today, and 17 dailies in the United Kingdom's Newsquest division. In the U.S., it owns 23 television stations, plus the top jobs site, CareerBuilder, as well as hundreds of other media properties. Its official worldwide employment is 41,500. Layoffs over the past year will likely show the workforce has fallen below that mark, when new figures are released in the weeks ahead.
Related: In a letter to the Romenesko blog, former New York Times tax beat reporter David Cay Johnston raises interesting questions about Gannett's accounting in today's earnings release. Plus: The Wall Street Journal's quarterly earnings story
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.
I can't help but feel this is very bad news for regular employees.
ReplyDeleteMy understanding is that she's the evil genius behind the layoffs, terminations and so called "transitional pay" arrangement. With this promotion she's going to be able to storm through the newspapers like the Visogoths sacking Rome.
Excellent reporting, Jim. Thanks! Did notice one typo: she took the reins, not reigns. You needn't post this.
ReplyDeleteSo. Someone who forks over a boatload of company money to a college that doesn't have a Gannett property gets a promotion while regular hardworkers get pink slips? This is wrong.
ReplyDeleteThe blush is off wunderkind Chris Saridakis. His operation isn't producing the sort of revenues that corporate wanted to see. Ad rates for the Internet are declining, and the social networking idea isn't catching on. There are too many competitors, including Facebook. Read the quarterly report and you see:
ReplyDelete"Digital operating revenues totaled $157.7 million in the quarter and were 7.2 percent lower compared with $169.9 million in 2008. This reflects primarily softer employment advertising demand that impacted CareerBuilder’s results offset partially by significant revenue increases at PointRoll and ShopLocal. Operating expenses excluding special items were $131.7 million, 8.4 percent lower than last year on a comparable basis."
Does anyone else find this appointment totally disturbing? Gannett lays off thousands and furloughs those left; properties struggle daily to provide at best a mediocre product to served communities, and in Corporate's infinite wisdom what Gannett needs is another and additional highly paid and perked staffer. This further expands an already top heavy and ineffective leadership; no wonder the stock is reacting. Way to go Gannett!
ReplyDeleteFitting that the Queen whose response to everything is "off with their heads" would rise to the top in an "Alice in Wonderland" company. Lewis Caroll's description seems apt:
ReplyDeleteI pictured to myself the Queen of Hearts as a sort of embodiment of ungovernable passion - a blind and aimless Fury
I'd like to ask the board to define "leadership."
ReplyDeleteThis is from the digital division section in today's earnings statement: "Operating expenses for the Digital segment also include costs accrued for an employee incentive compensation plan tied to the performance of certain digital businesses."
ReplyDeleteWas this "employee incentive compensation plan" for one employee -- i.e., Chief Digital Officer Chris Saridakis -- or was it for several executives, including possibly Jack Williams of digital ventures?
Who cares, Jim? The big news here is that Gracia (i.e. bean-counter extraordinaire) is not now only calling the money shots - she's firmly in grip of the corporate cock.
ReplyDeleteSounds like a really bad porno that results in everyone feeling 'down' and unsatisfied.
Great. Country's largest newspaper company, formerly run by a TV ad salesman, is now run by a bean counter. If you have any doubts about newspapers being on the road to extinction, this should bring you resolution and closure.
ReplyDeleteI would like to see Saradakis run this company. He is liked, he is smart and he is tough. I also believe they need someone with vision and passion. He has all of that. He is also not a TV suit or a newspaper guy.
ReplyDeleteDon't the big corporations get the connection between the economy and massive layoffs? the economy won't improve until places like Gannett put a hold on the cuts.
ReplyDeleteShe's blood sucking bad news; the disliked ones always rise to the top.
ReplyDeleteI suspect that Martore's promotion was due partly to Dubow's continuing recovery from back surgery last summer. I'm now told that he is experiencing significant ambulatory problems, which likely limit his ability to travel to Gannett's far-flung worksites in the U.S. and U.K.
ReplyDeleteDubow experiencing ambulatory problems? The corporate jet and all GCI sites have wheelchair ramps, don't they?
ReplyDeleteSeems pretty huge to me that the beat writer questioned the financials. I too owuld like to know the reasons behind the higher than expected taxes.
ReplyDeletethis continues the Gannett tradition of promoting and grooming women for top posts - terrible women, professionally. could never cut it in a quality media company.
ReplyDeletesorry to see what is happening at GCI. was always a third-tier company with the women and minorities who could not gain employment elsewhere.
sigh.
It is unbelievable that Gannett is now being run by an accountant and the CEO is from the broadcast segment. So, who has any vision for this company? The CEO? The President? I am just a worker bee here at Gannett, but I am worried that there is no future for Gannett when the two top executives have no relevant experience for where this company needs to go.
ReplyDeleteAs a separate point, the only positive here is that Gracia Martore Is a woman and I am glad to see a woman move up the corporate ladder. The only problem is that Ms. Martore is not qualified to to run a major media company unless their strategy is to just cut costs.
A pat on the back and endorsement from Karen Hastie Williams, what a complete joke. She's on the board for one reason only...political correctness. What the hell has she ever contributed that was worth a damn. Amazing!
ReplyDeleteMy longtime readers know that I'm no fan of Williams, either. I've seen little evidence that she's done the job she's paid to do: represent the interests of shareholders. Instead, she's collected big director's fees while acting way too cozy with the folks she's supposed to supervise: top management.
ReplyDeleteDoes the nonsense ever end? Saw this coming when Dubow went on medical leave last year. Remember getting the e-mail from corporate. Big Deal I thought. Who cares? It's over... very soon. Fascinating though... Gannett is like a train wreck... horrible to see but you just have to keep looking back at it!
ReplyDeleteJim, I believe you are little bias when it comes to Hastie-Williams. The whole top brass is cozy with each other - not just her. Never saw a vulture eating another vulture.
ReplyDeleteHonestly, do you really believe they "supervise" top management??????????? If that would be the case, Dubow would have been send into retirement or some other lie they present to the employees, Gracia would still be the same bean counter and clique/personal friendship promotions wouldn't happen.
The board of directors is a joke and they are only there to strip the carcass of Gannett as are top brass at Gannett. Nothing else!
I can't wait to read that Craigy collected his golden parachute, while we deal with wage freezes, furloughs lay-offs the price of everything going up, up, up! The new American dream for the middle class is a winning lottery ticket, the Puritan work ethic is dead!
ReplyDelete