The U.S. newspaper division is making progress on the Web, President Bob Dickey told employees in a memo last week. "Online revenues will post year-over-year gains in the first quarter,'' he said.
But public documents tell a different story on the pure-digital side, a select group of operations overseen by Chief Digital Officer Chris Saridakis (left); they likely include Pointroll, Captivate, Ripple6 and MomsLikeMe. In regulatory filings, Gannett hasn't identified the specific operations, except to say they aren't CareerBuilder, Topix, Classified Ventures, fish4 and s1 in the U.K.
The new shareholders proxy report reveals that, for the second consecutive year, the Saridakis operations failed to reach minimum, or "threshold," revenue and profit goals last year. The goals were set under a four-year bonus contract created for Saridakis soon after he was hired in late 2007. His contract is called the Digital Long-Term Incentive Plan, or DLTIP; it's outlined in the annual 10-K report for 2008 (look for Exhibit 10-16-1).
"The company did not achieve the threshold DLTIP performance goals for either 2008 or 2009," the new proxy report says on Page 34, so no "DLTIP award" for Saridakis was earned for either year.
The shortfall is significant news. Subsidiaries such as Pointroll, an advertising software company, are meant to be crucial revenue engines in an increasingly competitive market led by Google, Facebook and other tech ventures. Moreover, CEO Craig Dubow's $3.1 million in 2008 pay was based partly on his hiring Saridakis, U.S. Securities and Exchange Commission documents show.
Under the DLTIP, Saridakis is to get a targeted payment of about $4 million in February 2012 -- if the revenue and profit goals are met. However, the new proxy report shows Saridakis actually could earn up to $6 million. For competitive reasons, Gannett is keeping the revenue and profit targets confidential, under an accord reached last month with the SEC.
There's little time to waste, the new proxy report says: "The company believes that achievement of the DLTIP performance goals over the next two years will require significant effort and substantial progress toward the goals of the company’s strategic plan."