Last year, Gannett gave CEO Craig Dubow a platinum package of extra benefits -- including use of the company jet, plus personal legal and financial services -- worth nearly $160,000. They were part of the $9.4 million he got paid in overall salary, bonus and stock awards, according to a new report to shareholders this week.
At least five other senior executives got very similar bennies, too. They are COO Gracia Martore; Chief Financial Officer Paul Saleh; U.S. newspapers President Bob Dickey; USA Today Publisher Dave Hunke, and broadcasting President Dave Lougee.
These benefits are included in a pay category known as "all other compensation,'' a round-up of goodies often given to executives across Corporate America to make their jobs more attractive in a competitive labor market. Dubow's "all other" was the richest of the six executives. Martore's package was worth $110,652. Saleh, hired as top finance executive in November, got the smallest: just $4,608 worth.
Dubow's $52,090 life insurance premium is for a policy worth about $4.1 million, according to a formula in the proxy report. For Martore, GCI paid $29,450 for a policy worth about $3.3 million, according to the formula. Dubow and Martore own these policies, so their heirs would get any payoff.
The report doesn't list insurance policies for the other four executives.
Corporate disclosed this latest round of benefits on Thursday in the annual shareholders proxy report, a 61-page document filed with the U.S. Securities and Exchange Commission.
$25K of legal, tax advice?
In addition to occasional personal use of Corporate's jet, the benefits included company-paid automobiles; supplemental medical care; $15,000 in Gannett Foundation money to the execs' favorite charities; and (for most of them) $7,350 in company matches to their 401(k) retirement accounts.
One of the most interesting benefits, apparently for all the executives, is "legal and financial services," possibly worth up to $25,000 a year. The report doesn't spell out those services, but I imagine they include advice on how to reduce their annual income taxes; preparation of federal and state income tax returns; estate planning advice, and the like.
A few of the benefits were one-offs. Hunke, who was promoted to USAT publisher in April 2009, got $19,473 to pay for the closing costs on his new home near Corporate's headquarters outside Washington. Plus, he got another $13,084 "gross-up" payment to cover taxes owed on that $19,473, the report shows.
The money was paid under Corporate's relocation policy for management employees. Hunke's promotion required him to move from Detroit, where he had run the GCI-controlled Detroit newspaper publishing partnership since 2005.
In 2009, GCI reimbursed him $250,000 for a loss he incurred when he sold his Detroit-area home. The area was devastated by the near-collapse of the automobile industry.
Hunke's total pay last year was $2.5 million. That included a $375,000 cash bonus, plus the estimated future value of stock awards, including options.
In the fine print
The report breaks out the individual cost to shareholders of some -- but not all -- the benefits, in a footnote to the Summary Compensation Table. That closely-watched table lists salary, bonuses and stock awards for each of the six highest-paid executives as far back as 2008. And it includes the "all other" compensation details for those years.
The value of the legal and financial services isn't specifically detailed for any of the executives. I found the $25,000 amount in Footnote 2 to another table on Page 44.
Of Dubow's $159,465 in all other compensation, I was able to account for about $99,000 of the total -- leaving $60,000 unspecified.
This spreadsheet shows all other compensation for Dubow, Martore, Saleh, Dickey, Hunke and Lougee. Where available, I've included the value of individual items.
Related: the board of directors' Executive Compensation Committee report starts on Page 32 of the proxy report.
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| Dubow |
These benefits are included in a pay category known as "all other compensation,'' a round-up of goodies often given to executives across Corporate America to make their jobs more attractive in a competitive labor market. Dubow's "all other" was the richest of the six executives. Martore's package was worth $110,652. Saleh, hired as top finance executive in November, got the smallest: just $4,608 worth.
Dubow's $52,090 life insurance premium is for a policy worth about $4.1 million, according to a formula in the proxy report. For Martore, GCI paid $29,450 for a policy worth about $3.3 million, according to the formula. Dubow and Martore own these policies, so their heirs would get any payoff.
The report doesn't list insurance policies for the other four executives.
Corporate disclosed this latest round of benefits on Thursday in the annual shareholders proxy report, a 61-page document filed with the U.S. Securities and Exchange Commission.
$25K of legal, tax advice?
In addition to occasional personal use of Corporate's jet, the benefits included company-paid automobiles; supplemental medical care; $15,000 in Gannett Foundation money to the execs' favorite charities; and (for most of them) $7,350 in company matches to their 401(k) retirement accounts.
One of the most interesting benefits, apparently for all the executives, is "legal and financial services," possibly worth up to $25,000 a year. The report doesn't spell out those services, but I imagine they include advice on how to reduce their annual income taxes; preparation of federal and state income tax returns; estate planning advice, and the like.
 |
| Hunke |
The money was paid under Corporate's relocation policy for management employees. Hunke's promotion required him to move from Detroit, where he had run the GCI-controlled Detroit newspaper publishing partnership since 2005.
In 2009, GCI reimbursed him $250,000 for a loss he incurred when he sold his Detroit-area home. The area was devastated by the near-collapse of the automobile industry.
Hunke's total pay last year was $2.5 million. That included a $375,000 cash bonus, plus the estimated future value of stock awards, including options.
In the fine print
The report breaks out the individual cost to shareholders of some -- but not all -- the benefits, in a footnote to the Summary Compensation Table. That closely-watched table lists salary, bonuses and stock awards for each of the six highest-paid executives as far back as 2008. And it includes the "all other" compensation details for those years.
The value of the legal and financial services isn't specifically detailed for any of the executives. I found the $25,000 amount in Footnote 2 to another table on Page 44.
Of Dubow's $159,465 in all other compensation, I was able to account for about $99,000 of the total -- leaving $60,000 unspecified.
This spreadsheet shows all other compensation for Dubow, Martore, Saleh, Dickey, Hunke and Lougee. Where available, I've included the value of individual items.
Related: the board of directors' Executive Compensation Committee report starts on Page 32 of the proxy report.
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ReplyDeleteJim: Hopefully this was inadvertent but "to insure Dubow's life' in the headline can be read as vaguely threatening. Sure you didn't mean it that way, but ...
ReplyDeleteI hate this f******g company.
ReplyDeleteI did not mean it in any threatening way.
ReplyDeleteHaving said that, I don't know how else to characterize life insurance. Suggestions, anyone?
Here's the exact language from the footnote: "Amounts for 2010 reported in this column include (i) annual life insurance premiums paid by the Company for Mr. Dubow in the amount of $52,090 and for Ms. Martore in the amount of $29,450."
Glad to see that upper management is suffering with the rest of us.
ReplyDelete8:22, you are missing an important point. Craig, Gracia, Bob and the others are being rewarded for their ability to achieve results through others. They didn't have to do the cost-cutting; they merely directed Bob to tell the group presidents to tell the local site managers to do the dirty work, thereby freeing the executive leadership of getting their hands dirty.
ReplyDeleteIn essence, they are being rewarded because they were able to retain and motivate a lower-management infrastructure who could execute these initiatives. If you think about it, it's brilliant: They got local publishers to take salary cuts and furloughs, then got them to make round after round of expense cuts, yet somehow also made them feel lucky to still have a job. Sure, the local publishers got a "bonus" too, but nothing nearing the generational wealth that the company has bestowed on these individuals in a single year. Amazing.
As has been reported on this site earlier, there are several properties in Gannett who will labor all year to return a NIBT at or near what we paid out to one of these individuals (Craig counts as the NIBT of several sites combined).
I would imagine that Craig, Gracia and Bob feel entitled to such largess. After all, they are "taking the heat from the Street." And I am sure they feel these amazing pay-and-perks packages are just compensation for the "hard decisions" they had to make about our future. Yet none of these guys had to look loyal employees in the eye and tell them that their 20-plus career was over so we could save $25k or $35k a year for the company. None of these guys had to watch employees box up years of their lives as they were sobbing. None of these guys had people point fingers in their faces. None of these guys had to go home at night, exhausted, emotionally spent and unable to tell the kids what you did at work today.
I know we're no Apple, but how I long for leadership like Steve Jobs. When he came back to that company, he turned down a salary and was paid only in stock. The better he did his job, the more money his stock was worth. No one there faults Jobs for being a rich man, because his vision, leadership and cultivation of a spirit of innovation has made the company prosper and bolstered the spirts and wallets of his employees.
Most of us in GCI could live like kings for the rest of our lives off on year of Craig's salary. He and his management team are multi-millionaires and, most likely, they could stop working right now and never have another need or want (especially given their parachutes). How refreshing and inspirational it would be if Craig, Gracia and Bob opted to foresake the bonus, forsake the salaries, foresake the luxury perks and be paid in stock and stock options only.
But that's not going to happen. They obviously feel their large compensation packages are earned and justified. And, like I said, they did get it done without getting their hands dirty. At the end of their careers, after years of multi-million dollar salaries and an exit package that would be akin to hitting the lottery, they will have riches enough to pass to their children and grandchildren.
Congratulations!
To be fair, Hunke had to leave Detroit and sell his house during a horrible real estate market when he was promoted to USAT So I'm sure he took huge losses on that. At least balance your reporting.
ReplyDeleteYou'd really think that their salaries would be enough. Free cars, plane trips, professional legal advice (how to avoid paying taxes) and life insurance...It's all too much!
ReplyDeleteActually 10:22, I would consider what Gannett did for Hunke a huge favor. Pulling him out of that hellhole that is Detroit where the population actually decreased by 25%, and also giving him $ to offset the loss, that in all likelihood he probably would not have made back for decades, if ever, in that housing market. In fact, the only way I see any property increasing in value in the greater Detroit area is if they legalized pot, and even then the increase probably would still not be all that significant! If you think about it, they really bailed him out. Not to mention the rebound of housing prices here in the DMV area which are far greater than most of the US. So if he decides to sell at any time in the future, he'll probably end up making money - making this a double win for him.
ReplyDeleteThey don't comp all employees for home losses due to relo. It is selectively applied or negotiated.
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ReplyDeleteFollowing is an edited version of a comment posted at 11:24 a.m.:
ReplyDeleteHunke is a boob who was AWOL during the meat of the so-called "transformation" this summer. While back-office vultures like [XXXXX] made decisions regarding a business they knew nothing about, Hunke toured the country talking to local Rotary chapters. His hands-off management style is not a vote of confidence in his subordinates, it's a manifestation of his complete inability to see strategically, past the next ad sale.
Yes, that is worth paying millions for... on Bizarro World.
10:22 raises a good point about Hunke's losing money on his home when Detroit's real estate market collapsed with the auto industry.
ReplyDeleteI've added that detail plus a link to a Detroit Free Press story that says 23% of Detroit houses are now vacant, up from 10% a decade ago.