Craig A. Dubow has resigned as Gannett's chairman and chief executive because of chronic health problems, the company announced moments ago, and is being replaced as CEO by Gracia Martore, the company's No. 2 executive and former chief financial officer.
The announcement, which had been expected after Dubow's second medical leave starting three weeks ago, ends one of the shortest and most tumultuous management tenures in the company's 105-year history. With USA Today, GCI is the nation's biggest newspaper publisher by circulation.
The board of directors said it had elected Marjorie Magner, 61, a director since 2006, as non-executive chairman. Martore also was elected to the board, the statement said.
The board's selection of Martore, 60, had been forecast since her promotion to president and chief operating officer in February 2010. While her elevation to CEO shows the board wants to continue the conservative management style and business plan developed during Dubow's term, it's likely there will be broad, company-wide changes nonetheless.
The business plan is focused on cutting costs to stabilize profits, while pushing digital initiatives to boost revenue, which has been declining for years. Inevitably, many executives will use today's CEO change as reason to retire, either voluntarily or under pressure -- creating a company-wide ripple effect down the ranks.
Because of her age, Martore is virtually guaranteed to be CEO for just five years. She turned 60 last month, and GCI's mandatory retirement age is 65. However, the board could make an exception and extend her term for a short time -- as it did for Dubow's predecessor, Doug McCorkindale.
Martore is GCI's seventh CEO, and the first woman to occupy the job. She joined GCI in 1985, and has spent nearly all her career in finance.
Dubow could collect $37 million
The board said Dubow, 56, had resigned "due to disability," a circumstance that paves the way for him to collect as much as $37.1 million in retirement and disability benefits, company documents show. The benefits are worth considerably more than what he would get, $22.5 million, if he left in a traditional retirement.
In the company's statement, Magner said: “We are very fortunate to have an executive of Gracia’s tenure and caliber in place and ready to lead the ongoing transformation of the company for long-term growth. She is smart, straightforward and committed to Gannett’s mission to provide trusted news and information and serve our many communities. Gracia has a proven track record and has demonstrated effective leadership over 26 years at the company. Most importantly she has an incredible sense of responsibility for ensuring Gannett’s continued success.”
The announcement came after stock markets closed. Investor reaction was muted in late trading; GCI's shares were virtually unchanged.
Named CEO in 2005, Dubow led GCI during the most difficult period of its history, one where the newspaper industry entered a steep decline during the Great Recession. Although advertising losses have moderated in recent quarters, GCI remains challenged in a new media landscape now dominated by more nimble competitors such as Facebook and Twitter, operating with much lower cost structures.
Stock fell to $10 vs. $72
The company's stock was worth $72 a share when Dubow became CEO. But it plunged alongside other newspaper stocks, trading as low as $1.85 in March 2009 amid fears the company was headed for bankruptcy. It closed today at $10.45, down a penny.
The board did not say what it is paying Martore or Magner in their new roles; that will likely be disclosed in a regulatory filing in the days ahead. Dubow's base pay as board chairman and CEO has been $1.2 million. In 2010, the most recent year available, he got paid a total $9.4 million, which included the estimated future value of stock awards and options. That was double his pay in 2009.
As COO, Martore's base pay was raised to $950,000. Her total compensation for 2010 was $8.2 million -- also twice as much as she got the year before. (Summary compensation table for top six earners.)
Magner's term could be short as well, based on recent history. Dubow's predecessor as chairman, McCorkindale, held that position for just a year while Dubow settled into his new job. It would not be surprising if Martore were elected chair after Magner.
Magner role may be key
The chairman's role can be very important, as they largely control the agenda for the governing board, which hires the CEO; approves the appointment of other top executives, and reviews the company's strategic plan. Governance experts generally urge boards to separate the positions of chair and CEO, but like many companies, GCI has combined the two for decades.
Magner is managing partner of Brysam Global Partners, a private equity firm investing in financial services firms with a focus on consumer opportunities in emerging markets, GCI's statement says. She left Citigroup in 2005 after 18 years, most recently as chairman and CEO of the Global Consumer Group. She is also a director of Accenture and Ally Financial.
Martore was chief financial officer for seven years before being named COO. She joined GCI in 1985 as assistant treasurer. She was named vice president for treasury services in 1993. She was given responsibility for Investor Relations in 1996, became treasurer and vice president for investor relations in 1998, and was named a senior vice president in 2001. She holds a bachelor's in history and political science from Wellesley College. Over the years, Martore has directed more than $100,000 in Gannett Foundation grants to the college.
With Martore at Dubow's side, GCI's annual revenue plunged to $5.4 billion in 2010, from $7.6 billion in 2005. Net income dove to $588 million from $1.2 billion during the same period. Battling for survival, the company slashed expenses through layoffs as it consolidated finance, printing, marketing and other work.
The company's global workforce fell to 32,600 at the end of 2010 from 52,600 in December 2005, the end of Dubow's first year as CEO. (The 2010 year-end figure is the most recent available.) More than 11,000 of those job losses came during 2007-2009 alone. Combined, the layoffs and other cutbacks have made Dubow and Martore among the company's most polarizing figures.
Controversial foundation grants
Dubow's reputation was tarnished amid Gannett Blog revelations that he had steered $40,000 from the company's charitable arm, the Gannett Foundation, to a scholarship fund named for himself and his wife. The fund is off limits to virtually all company employees. More recently, Dubow's health has been poor, the result of major back problems. Since the fall of 2009, he was often seen at work on crutches or in a wheelchair.
Of his tenure, Magner's statement said: “During the past six years, Craig has repositioned Gannett as a leading media and marketing solutions company during an extremely challenging time for our industry. Craig championed our consumers and their ever-changing needs for news and information. He was instrumental in building a strong management team combining talent from within the company as well as from the outside -- a team that shares a common passion and vision for Gannett’s future. We thank Craig for his dedication and for the solid foundation he has laid for the company going forward."
Dubow was quoted as follows: "I’ve been with Gannett for 30 amazing years. I am extremely proud of where we are today as a company. We have always maintained an unwavering focus on the consumer. As a result, we have evolved into a digitally led media and marketing solutions company committed to delivering trusted news and information anywhere, anytime. For me, the decision to step down was difficult, but I must now focus on my health and my family. I will miss working with the talented team at Gannett and firmly believe the company’s best days lie ahead. Gannett is in good hands under Gracia’s leadership and well positioned to succeed going forward."
Publisher of nearly 100 dailies
Martore now leads a company founded in 1906 by Frank E. Gannett and associates. As the first woman CEO, Martore becomes one of the very few female executives at the top of a Fortune 500 company, albeit one that's fallen in the magazine's rankings. Since GCI's start, all its CEOs came from within the company.
Dubow was made CEO in July 2005, and board chairman a year later. Prior to becoming the top executive, he was president of GCI's broadcasting division, which now includes 23 television stations plus other media properties.
GCI publishes about 100 daily newspapers in the U.S., Guam and the U.K. Its flagship property is USA Today. Other leading dailies include The Arizona Republic in Phoenix; The Des Moines Register, and The Courier-Journal in Louisville, Ky.
Other holdings include No. 1 jobs site CareerBuilder, advertising services firm PointRoll, and hundreds of other weeklies and media properties. The company is based in McLean, Va., outside Washington. Its shares are traded on the New York Stock Exchange under the ticker GCI.
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.
 |
| Dubow |
The board of directors said it had elected Marjorie Magner, 61, a director since 2006, as non-executive chairman. Martore also was elected to the board, the statement said.
The board's selection of Martore, 60, had been forecast since her promotion to president and chief operating officer in February 2010. While her elevation to CEO shows the board wants to continue the conservative management style and business plan developed during Dubow's term, it's likely there will be broad, company-wide changes nonetheless.
The business plan is focused on cutting costs to stabilize profits, while pushing digital initiatives to boost revenue, which has been declining for years. Inevitably, many executives will use today's CEO change as reason to retire, either voluntarily or under pressure -- creating a company-wide ripple effect down the ranks.
 |
| Martore |
Martore is GCI's seventh CEO, and the first woman to occupy the job. She joined GCI in 1985, and has spent nearly all her career in finance.
Dubow could collect $37 million
The board said Dubow, 56, had resigned "due to disability," a circumstance that paves the way for him to collect as much as $37.1 million in retirement and disability benefits, company documents show. The benefits are worth considerably more than what he would get, $22.5 million, if he left in a traditional retirement.
In the company's statement, Magner said: “We are very fortunate to have an executive of Gracia’s tenure and caliber in place and ready to lead the ongoing transformation of the company for long-term growth. She is smart, straightforward and committed to Gannett’s mission to provide trusted news and information and serve our many communities. Gracia has a proven track record and has demonstrated effective leadership over 26 years at the company. Most importantly she has an incredible sense of responsibility for ensuring Gannett’s continued success.”
 |
| Magner |
Named CEO in 2005, Dubow led GCI during the most difficult period of its history, one where the newspaper industry entered a steep decline during the Great Recession. Although advertising losses have moderated in recent quarters, GCI remains challenged in a new media landscape now dominated by more nimble competitors such as Facebook and Twitter, operating with much lower cost structures.
Stock fell to $10 vs. $72
The company's stock was worth $72 a share when Dubow became CEO. But it plunged alongside other newspaper stocks, trading as low as $1.85 in March 2009 amid fears the company was headed for bankruptcy. It closed today at $10.45, down a penny.
The board did not say what it is paying Martore or Magner in their new roles; that will likely be disclosed in a regulatory filing in the days ahead. Dubow's base pay as board chairman and CEO has been $1.2 million. In 2010, the most recent year available, he got paid a total $9.4 million, which included the estimated future value of stock awards and options. That was double his pay in 2009.
As COO, Martore's base pay was raised to $950,000. Her total compensation for 2010 was $8.2 million -- also twice as much as she got the year before. (Summary compensation table for top six earners.)
Magner's term could be short as well, based on recent history. Dubow's predecessor as chairman, McCorkindale, held that position for just a year while Dubow settled into his new job. It would not be surprising if Martore were elected chair after Magner.
Magner role may be key
The chairman's role can be very important, as they largely control the agenda for the governing board, which hires the CEO; approves the appointment of other top executives, and reviews the company's strategic plan. Governance experts generally urge boards to separate the positions of chair and CEO, but like many companies, GCI has combined the two for decades.
Magner is managing partner of Brysam Global Partners, a private equity firm investing in financial services firms with a focus on consumer opportunities in emerging markets, GCI's statement says. She left Citigroup in 2005 after 18 years, most recently as chairman and CEO of the Global Consumer Group. She is also a director of Accenture and Ally Financial.
Martore was chief financial officer for seven years before being named COO. She joined GCI in 1985 as assistant treasurer. She was named vice president for treasury services in 1993. She was given responsibility for Investor Relations in 1996, became treasurer and vice president for investor relations in 1998, and was named a senior vice president in 2001. She holds a bachelor's in history and political science from Wellesley College. Over the years, Martore has directed more than $100,000 in Gannett Foundation grants to the college.
With Martore at Dubow's side, GCI's annual revenue plunged to $5.4 billion in 2010, from $7.6 billion in 2005. Net income dove to $588 million from $1.2 billion during the same period. Battling for survival, the company slashed expenses through layoffs as it consolidated finance, printing, marketing and other work.
The company's global workforce fell to 32,600 at the end of 2010 from 52,600 in December 2005, the end of Dubow's first year as CEO. (The 2010 year-end figure is the most recent available.) More than 11,000 of those job losses came during 2007-2009 alone. Combined, the layoffs and other cutbacks have made Dubow and Martore among the company's most polarizing figures.
Controversial foundation grants
Dubow's reputation was tarnished amid Gannett Blog revelations that he had steered $40,000 from the company's charitable arm, the Gannett Foundation, to a scholarship fund named for himself and his wife. The fund is off limits to virtually all company employees. More recently, Dubow's health has been poor, the result of major back problems. Since the fall of 2009, he was often seen at work on crutches or in a wheelchair.
Of his tenure, Magner's statement said: “During the past six years, Craig has repositioned Gannett as a leading media and marketing solutions company during an extremely challenging time for our industry. Craig championed our consumers and their ever-changing needs for news and information. He was instrumental in building a strong management team combining talent from within the company as well as from the outside -- a team that shares a common passion and vision for Gannett’s future. We thank Craig for his dedication and for the solid foundation he has laid for the company going forward."
Dubow was quoted as follows: "I’ve been with Gannett for 30 amazing years. I am extremely proud of where we are today as a company. We have always maintained an unwavering focus on the consumer. As a result, we have evolved into a digitally led media and marketing solutions company committed to delivering trusted news and information anywhere, anytime. For me, the decision to step down was difficult, but I must now focus on my health and my family. I will miss working with the talented team at Gannett and firmly believe the company’s best days lie ahead. Gannett is in good hands under Gracia’s leadership and well positioned to succeed going forward."
Publisher of nearly 100 dailies
Martore now leads a company founded in 1906 by Frank E. Gannett and associates. As the first woman CEO, Martore becomes one of the very few female executives at the top of a Fortune 500 company, albeit one that's fallen in the magazine's rankings. Since GCI's start, all its CEOs came from within the company.
Dubow was made CEO in July 2005, and board chairman a year later. Prior to becoming the top executive, he was president of GCI's broadcasting division, which now includes 23 television stations plus other media properties.
GCI publishes about 100 daily newspapers in the U.S., Guam and the U.K. Its flagship property is USA Today. Other leading dailies include The Arizona Republic in Phoenix; The Des Moines Register, and The Courier-Journal in Louisville, Ky.
Other holdings include No. 1 jobs site CareerBuilder, advertising services firm PointRoll, and hundreds of other weeklies and media properties. The company is based in McLean, Va., outside Washington. Its shares are traded on the New York Stock Exchange under the ticker GCI.
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.
Christmas came early.
ReplyDeleteYes!!!
ReplyDeleteThis is great news. Rght? Hopefully. Gracia can't be any worse. Here's hoping she makes some positive changes.
Dumping moms like me is a good step.
Nice start.
ReplyDeleteGarcia will be worse. This is not a day for celebration. A number cruncher just took control of a media company.
ReplyDeleteYes Gracia could be worse. She was the CFO and only seems to care about how to cut cost.
ReplyDeleteI am not a fan of what Craig Dubow allegedly accomplished with GCI, but it's obvious that he's a broken man physically. I hope he feels better someday soon.
ReplyDeleteI like Gracia. I don't think she's particularly good for our company, but she has a lot of energy and passion. I'll take that over ambivalence any day.
I really hope someone steps forward with ideas about how we can innovate.
ReplyDeleteWe can't just keep cutting people ("costs") and hoping for better returns. That's not how it works. We need to decide what we do best and allocate all available resources in that direction.
Craig has been heavily medicated for years. Gracia has been leading the charge for a while, but now decisions won't take so long.
ReplyDeleteAm anxious to see how Wall Street takes the news when the market opens tomorrow.....after making an allowance for the job numbers.
ReplyDeleteDing Dong, the Witch is dead!
ReplyDeleteWhich Old witch?
The wicked witch.
Ding Dong the wicked witch is dead!
I was surprised when CD took another medical leave recently, rather than just retiring. The cynic in me wonders if they jumped with the retirement because there was a bigger business news story today to give him cover.
ReplyDeleteThis comment has been removed by a blog administrator.
ReplyDeleteGracia has been running the company for awhile anyway.
ReplyDeleteThe King is dead. Long live the Queen! Seriously though this is not good news. It's at best neutral. Martore has led the "cost cutting" (ie layoffs) for years so any hope that she will be a better or more lightened manager is a pipe dream. If anything, layoffs are likely to accelerate and severance packages get worse. Buckle your seat belts, it's going to be a bumpy ride.
ReplyDeleteOther media say Magner is 62 -- a figure apparently supplied by Pence.
ReplyDeleteI've used 61 because that's the figure on Corporate's website, which was updated only today.
CD helped GCI weather a hurricane. Don't sell him short... The stock will at least double in the months ahead - given the sanity - not of wall st - this is assured. Maybe groupon can be had cheap??? All those local sales reps needs something else to sell!
ReplyDeleteHe was instrumental in building a strong management team combining talent from within the company as well as from the outside -- a team that shares a common passion and vision for Gannett’s future.
ReplyDeleteWow. That's it? Building a team? Six years as #1; nearly his whole career as an employee of Gannett, and the best they can do is give him credit for building a team? A lesson to us all. Cast off like the rest of us (but he gets $35MM). Amazing.
GM going to start fast. It's her co. now!
ReplyDeleteLife is short. With his declining health, he's gonna enjoy his $35 million. The employees can get lost.
ReplyDeleteThis is not good news. It's status quo. The board clearly doesn't give a shit about the fate of the company. If it did it would have taken this opportunity to seek out an innovative CEO with success in the realm of digital media. By sticking with Martore they have assured more cost cutting to maintain profits and ultimately signed the death warrant of the corporation. She won't last five years because the company will be split into pieces before then.
ReplyDeleteDubow's personal greed will be his legacy. It is a morale destroyer that makes GM's job geometrically harder.
ReplyDeleteGracia knows as much about journalism as my cat. Which should mean any sort of innovation will be nil. Let's hope for better. Any change from dubow has to be a positive, no?
ReplyDeleteIs this a great country or what? $37 million for driving
ReplyDeleteG the co. Stock into the ground, gutting thousands of workers and looting the coffers for huge paydays and pet causes. Oh, and freezing pensions and cutting health benefits. Happy retirement, Craig.
At least Craig gets lifetime healthcare bennies for himself and the fam.
ReplyDeleteGOOD RIDDANCE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
ReplyDeleteLoooooooooooong overdue departure but no surprise. Is My Boss around?
ReplyDelete11:41 journalists ran the company when the web came into being and they/you ignored it. Nuff said.
ReplyDeletehere's the new boss. same as the old boss.
ReplyDelete7:23 Doug mccorkindale was a lot of things, but no journalist. Dubow and martore were in key positions under his watch. You must have short term memory issues or are simply ignoring company history.
ReplyDeleteGracia has been groomed for this for several years. And she's been running the company for the past two, at least. This is not news to us at Gannett, only to Wall Street.
ReplyDeleteTheir seem to be very little out their about Gracia Martore personal life? Is she married, kids, have a partner, a lover? Does the people on this blog, who knows her thinks, that she may have slept her way to the top?
ReplyDeleteRmichem@11:39 I'm confident that she was promoted over the years because of her financial skills.
ReplyDeleteAs to your other question, in 2002, when she was promoted to chief financial officer, Gannett said in a news release: "She is married to Joseph Martore and has two children."
Jim her married, was mention 9 year ago. It seem funny, their would be no mention of it recently, even a little footnote. Which makes me wonder if she was divorce and why?
ReplyDeleteDubow was dangerous because he did nothing. Martore is dangerous because she will be actively doing things.
ReplyDeleteNow that Gracia is CEO, will there be a regime change? Jim, what's your guess as to which execs win vs. who loses?
ReplyDeleteIf she is at all interested in improving employee morale and the newspaper product itself, she will get rid of Dickey and his cronies. Ex: Crotchfelt, Hurst, Hollingsworth, Zildich, etc., and let the reign of unreasonableness end.
ReplyDeleteShe does not care about the newspaper. It is all about digital. Profits are higher in digital so the attention is going to be there. Drive digital revenues or lose your job. period.
ReplyDelete11:32 -- Profits aren't higher in all digital areas if you charge the content creation against them. Obviously, I'm not referring to Careerbuilder, Pointroll, etc. But the digital side of newspapers would probably be losing money if forced to cover the cost of producing the product.
ReplyDelete@11:41 ...Journalists didn't ignore the web. Get the facts right. Some many not have been fanatical about it, but it wasn't ignored by journalists. The falls squarely to advertising and top leaders who didn't know what to do with it or how to make it part of the company's portfolio. Nothing was invested nothing in innovation and R/D and got burned. Ad folks got on board once they got served their lunches, but they were not at the forefront. Circulation folks didn't want it at all, mainly because of fear and not understanding innovation and transformation.
ReplyDelete35 Million????????????????? I get on disability as an employee and they get me filling out forms and try to exempyt me from payments. Waht a golden contract that the poor employees will have to pay with "Give backs and Toil" for years so he gets paid . If they don't sell out and not pay the pensions and come up short on the 401k"s hello my congressman in washington, enron set the standard you money saving fools!!!!!!!!!!!
ReplyDelete