Tuesday, December 14, 2010

Urgent: GCI grants first 2010 executive stock pay; Dubow's 110K RSUs could be worth $1.7M in 2014

Gannett has just disclosed an important part of this year's annual pay to 13 of the company's top executives: so-called restricted stock units.

RSUs are promises of company stock that can be claimed at a future date. They are significantly different from stock options, where executives buy shares from the company at a discounted price. RSUs are outright awards that don't require the executive to pony up any money.

RSUs and options have the same purpose: to encourage executives to stay in their jobs, while working to boost the company's stock price.

Today, for example, the company said the board of directors had awarded CEO Craig Dubow 110,000 RSUs, according to this Form 4 filing with the U.S. Securities and Exchange Commission. They may be redeemed for actual company shares on Dec. 10, 2014. If GCI's shares are worth the same on that date as they are at today's closing price -- $15.43 -- Dubow's 110,000 RSUs would be worth nearly $1.7 million. If GCI is worth more, so, too, are his RSUs. (And ditto if GCI's value sinks.)

RSUs are just one of several components of annual pay for senior executives. In addition to cash, they get stock options. I expect the company will disclose the options grants fairly soon.

Last year, Dubow got paid a total $4.7 million. Of that, an estimated $1.3 million was in RSUs, and $585,000 was in conventional stock options. (Pay last year for Dubow and other highest-paid executives.)

The chart, below, lists the RSUs granted to executives, based on today's filings. You may also download a copy of the chart. The board of directors granted all the RSUs last Friday. They all may be redeemed on the same December 2014 date. (List of all SEC filings.)


  1. Poor word choice in the original headline. I've now taken it out.

  2. Jim, posts such as this one are a major reason why I continue to contribute to your earnings. The stock awards and salaries of these so-called leaders of Gannett are shameful. Stock price is down, employee count is down, morale is miserable, reporting quality is down, readers and subscribers are far fewer, yet, Craig receives $1.7 million of additional compensation. It is apalling and I don't understand how any of the people on this list can look in the mirror without recoiling. Do they ever think of anyone other than themselves?

  3. This makes me absolutely sick to my stomach.

  4. The problem is in the Board of Directors who is allowing this. We as shareholders do not have any leverage until we reach 51% as one voice to make changes to the board and the executive staff.

  5. These people need to be fired, not rewarded!

  6. They can use the savings to throw holiday parties at the hubs.

  7. Well Mr. Hunke, your grant is somewhere between the head of HR and the lame performing President of Digital Ventures...Now if that is not a sign, I do not know what is!

    Also, it is interesting that Gannett BOD, chooses to reward the CFO more than anyone of the Divisional Presidents (Dickey, Hunke, Lougee). Clearly, Gannett is a finance and operations company...not a media business.

    In the end, these fat cat slobs will be slaughtered. They are not good leaders, businessmen.

    What also concerns me the the relatively low count of women and minorities on this special entitlement executive team. This board should wake up.

  8. I also contribute because you do these reports. Keep it up. No one else is doing it for us.

  9. Sadly, this does not surprise me in the least. They could care less that some of their employees are on the verge of poverty. They don't care that employees are having to choose between healthcare and buying food for their families. As long as their pockets continue to get deeper, that's their only concern.

    How difficult would it be for these executives to share the wealth with their employees. I mean, it wouldn't hurt them to give each employee a $1,000 bonus at the end of the year. But oh not, they prefer to remain selfish and self-centered.

  10. Harriet von Beaverbottom12/15/2010 2:04 AM

    In Gannett Leadership, the employees do not matter. They can be replaced, or simply let go and not replaced. The quality of the newspapers obviously suffer greatly, readership decreases quickly, employees become suspicious of each other since "leaks" always occur, people who have dedicated their lives to Gannett are suffering (if they are still employed). The ex-Gannett employees suffer even more as their unemployment runs out and they come to the stark realization of how much their pensions are actually worth. But from on high in McLean, Virginia no one in the top leadership positions cares one bit for the people who are often contemplating suicide as the scum in management keeps fattening their coffers and removes hope from those already thrown out with the trash-- or those who know it's coming very soon.

  11. I am a little surprised Deboiws is so much higher then the reast ad that Dickey is lower then the 2 CFOs, the newspapers still bring in the most revenue by far and you would think the person that heads up that division would get more.
    That said they are all too high, they need to start investing in the local propeties so they can grow.

  12. The total comes to about $7.4 million. How does that compare to RSUs awarded to top executives at other newspaper companies?

  13. Dickey is considering a one-man strike to protest his grant. He's really upset apparently.

  14. What? Dickey wants more?

    I can't imagine any of these turkeys giving a second thought as they feed at the trough.

    Like other posters I question the practice of rewarding bad behavior.

    Is Gannett capable of surviving without deeper cuts into its staff? I don't think so. UNLESS the spoiled brats at corporate tighten their belts and recognize that profit margins of the past are just that, of the past.

    This executive suite needs a major attitude adjustment.

    Does anyone of the Board of Directors care enough to do anything? Speak up. We'd like to hear from you!

  15. The board has NO business granting any of these managers free stock or bonuses. What is the point? No one is going anywhere.

  16. And this THIS is what's wrong with America.

    In the corporate world it's ALL about your company's stock price. Never mind the employees if some can be cut to create a temporary TEMPORARY rise in stock prices.

    And companies MUST overcompensate their intelligent, highly-sought-after bigwigs. If they don't, said bigwigs will take their services to another company to be overcompensated before they even lift a finger to prove their worth. Then at said new company, if it's not performing well (due in no way to bad decisions from said bigwigs (wink)) they'll just move on to the next company.

    And there's nothing to stop it because, hey, you know, it's capitalism. And capitalism is what Amuhrika is all about, right??

  17. Pretty funny (sad) that the Board feels the need to reward a CFO who has been with the company 1 month $771K in stock plus what he has already had recieved. Not a bad months worth of work.

  18. You got it, 11:05 a.m....That must really tick off some of the others. Guy just walks in, hangs up his coat and gets a barrel of $ rolled out to his car.

    God bless America!

  19. Journalism credo: Comfort the afflicted and afflict the comfortable.
    Gannett executives' credo: COMFORT THE COMFORTED.

  20. After reading this, I'm so ill I'll need to take a sick day.

  21. Only at Gannett could a bunch of do-nothing execs actually be rewarded. This would be funny if it weren't so tragically sad.

  22. Bad enough people like Dubow and Martore and Hunke and Dickey are getting fat stock rewards. Why would the head of HR get any kind of bonus? For overseeing the ouster of hundreds of employees? She's already loaded with stock options. You could say the same thing about the general counsel and other underlings.Does this board of directors have any common sense?

  23. And there is no way for stockholders to put an end to this? I refuse to believe that. There must be something employees can do en masse. These people are sucking the company dry.

  24. That's exactly what McCorkindale did: Suck the company dry. And he's still grabbing bucks to spread to his favorite charities!

    The guy had something like $250 million worth of stock when he retired, plus his cash and bennies, and yet he feels entitled to the extra charity cash stashed away in the executive play pen.

    Instead of properly staffing and equiping its papers, Big Al, Corkie, et al pulled the bucks to corporate and split up the spoils.

  25. Could someone who regularly posts on these subjects please, PLEASE, get an MBA?

    Then you could come back to inform us how it's a good thing for top management to have lots of company stock, to have lots of company options, to have lots of RSUs. Then you could come back to inform the proletariat that in a capitalist economy, you want the executive's incentives and motivations to align with those of their owners--namely, the shareholders.

    Then you could tell us how--gasp!-- the board was being wise to tie the executive's financial future to the performance of the stock, and how the performance of the stock is an imperfect, but nevertheless useful, proxy for the company's ongoing performance in the economy. You could recognize that the board would have been irresponsible if executive compensation was more skewed towards cash (as is the case for the rank and file).

    With said MBA in hand, and with your new, keen knowledge of how business works you can also explain to us how the motivations of a company's owners (to maximize profit) do not always align with those of the company's employees (namely to remain employed and to maximize salary). You would then point out that we've come full circle, and you would wisely observe that the shareholders are looking out for their own best interests by rewarding the executives in the same medium that lines their own pockets.

    But then, if you had gotten an MBA, and if you were capable of understanding these things, you'd probably be working for Bloomberg, the Journal, Reuters, the FT, or any of the other publications who are actively hiring knowledgable financial reporters.

    But since you haven't gotten an MBA, and since nothing reviles you more than thinking about all of the ill-gotten rewards, properly earned by real businessmen, you will probably continue spending your free time posting anonymously on internet message boards about how life is so unfair and how the powers that be are so unsympathetic to your plight.

    You are likely an "at will" employee. If your superior skills are so in demand in the work force economy, you are free to leave to pursue your vast riches and satisfaction in greener pastures.

  26. "But since you haven't gotten an MBA, and since nothing reviles you more than thinking about all of the ill-gotten rewards ..."

    No, but I do have a master's in journalism and I know how to use revile correctly.

    Should I bother to point out that you, 11:39 PM, are also posting anonymously?


  27. Way to miss the point, 12:56. But it's good you found a way to work in the repetitive retort of "You post anonymously, too!"

    Now leave the board and let the adults post.

  28. I still don't think McCorkindale left with $250 million. Based on my research, it was much closer to $20 million. That's still a lot of loot, but no where near $250M.

  29. Everyone, and I mean everyone, knows and understands the value of stock incentives.

    But this is a company that handed over cash to its top execs when the stock was inches from the penny market.

    The point here is: How much more do you give the same execs who have failed miserably time and time again?

    Is the board there to reward the genius of the layoff iniative, or to pony up when (and if) the executive suite actually comes up with an innovative and profitable venture?

    The stock holders are in no way benefitting from the largess of the Board of Directors.

  30. 11:39. It doesn't take an MBA to know that restricted stock is a gift for just sticking around. Unfortunately, it has nothing to do with how well an executive performs. Dont give me the excuse that RSUs are designed to keep talented managers from seeking other jobs. Do you actually think Dubow, Hunke and others are going to be recruited elsewhere? Pure and simple, this isnt any different than a bonus. The only thing you have to do to get it is stick around until the stock vests. If the board wanted to create incentives, it would grant stock options at a higher price than Gannett shares now trade at and incentivize managers to create more wealth for shareholders. Then everyone wins.

  31. Personally, I've met lots of people with MBAs and Masters degrees in journalism. The MBAs lack common sense and can't articulate simple business concepts. The journalists? Can't write or report as well as reporters and editors who've worked their way up the ladder.

  32. McCorkindale left a legacy when his greed bled down to all those listed above who were employed at GCI during his reign. Personality wise, these folks who were once decent people have become quite a bunch of SOBs.

  33. 11:39,
    Your arrogance is breathtaking. Sounds like you spend your day shilling for these incompetents. Back to work now sonny....Mama Martore is calling.

  34. 9:50 : It's pretty clear that you don't understand how an option works. If you grant an option at a strike price higher than the current market price, the option is "out of the money" and for practical purposes (w/o considering a Black Scholls model) worthless.

    Let's suppose the stock is trading at $15. You grant options at a strike price of $20. The executive works hard, the employees work hard, profits are made, the stock rises to $20 over 4-5 quarters, repersenting a 33% IRR. Now, if the executive goes to cash in his options, he gets to pay $20 for a stock worth $20. Where's the incentive?

    Now suppose you grant that same option at the current trading price of $15. Now the executive is motivated because he knows that when the options vest, each dollar that the stock has appreciated, represents a dollar of capital gain. So when the stock goes to $20, the executive ponies up $15 a share and instantly pockets the $5 paper profit. Since these options are usually nontransferable, that creates the added benefit of making the executive increase his stock holdings in the company in order to generate the profit. And since Wall Street is keenly aware every time a named officer makes a stock sale, that executive will be disincentivized from immediately selling the stock (he's already thinking about the next year's options, and doesn't want to hurt the stock price).

  35. 5:18 Thank you. That's a good stock option explainer.


Jim says: "Proceed with caution; this is a free-for-all comment zone. I try to correct or clarify incorrect information. But I can't catch everything. Please keep your posts focused on Gannett and media-related subjects. Note that I occasionally review comments in advance, to reject inappropriate ones. And I ignore hostile posters, and recommend you do, too."

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