When Corporate announced Craig Dubow's resignation as chairman and CEO on Oct. 6 for medical reasons, it deferred details of his severance agreement until later.
Now, those details have finally emerged, in the company's 155-page annual report to the U.S. Securities and Exchange Commission, filed Wednesday. Near the end of that 10-K report, starting on Page 92, you'll find the severance agreement Dubow signed that Thursday in October.
Among the details: Dubow, 57, is to receive a $5.9 million cash payment in early April -- six months after he signed the deal.
The agreement doesn't explain the payment's purpose. But it appears to be part of the estimated $37.1 million in disability and retirement benefits GCI said last year Dubow would be due in the event he was forced out for health reasons.
Dubow resigned because of back and hip problems, ending a 30-year career that included six as the company's top executive -- a period of huge revenue and profit declines as the newspaper industry nearly collapsed. Amid massive layoffs on his watch, GCI's workforce plunged to 31,000 employees by the end of last year vs. 52,600 the year Dubow became chief executive.
A 'secret' agreement
Much of the 11-page severance agreement consists of the mind-numbing boilerplate language usually found in such legal documents. Still, a few paragraphs jump out.
For one, Dubow and Gannett agreed to keep the agreement more or less a secret -- although GCI reserved the right to disclose its contents to the SEC. Which, of course, it did. That paragraph says:
"You and Gannett agree not to disclose or discuss the existence or the details of this Agreement with anyone other than our respective attorneys, accountants and/or your immediate family members, unless required by law. You hereby acknowledge and agree that Gannett may disclose this Agreement and/or the terms hereof in any investor communication or filing with the Securities and Exchange Commission (or other communication related thereto)."
No trash talk allowed
And both GCI and Dubow promised to not bad-mouth each other:
"You also agree that you will not make any statements, oral or written, or cause or allow to be published in your name, or under any other name, any statements, interviews, articles, books, web logs, editorials or commentary (oral or written) that is critical or disparaging of Gannett, or any of its operations, or any officers, employees or directors of Gannett, or of any of its operations."
It continues: "Likewise, Gannett, agrees that it will not make, and will instruct its current directors and executive officers not to make, any statements, oral or written, or cause to be published in Gannett’s name, any statements, interviews, articles, editorials or commentary (oral or written) that is critical or disparaging of you. Merely because a statement is made by a Gannett employee does not mean that it is made 'in Gannett’s name.'"
Did I miss anything? Please review the severance deal, then post any other details in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.
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| Dubow |
Among the details: Dubow, 57, is to receive a $5.9 million cash payment in early April -- six months after he signed the deal.
The agreement doesn't explain the payment's purpose. But it appears to be part of the estimated $37.1 million in disability and retirement benefits GCI said last year Dubow would be due in the event he was forced out for health reasons.
Dubow resigned because of back and hip problems, ending a 30-year career that included six as the company's top executive -- a period of huge revenue and profit declines as the newspaper industry nearly collapsed. Amid massive layoffs on his watch, GCI's workforce plunged to 31,000 employees by the end of last year vs. 52,600 the year Dubow became chief executive.
A 'secret' agreement
Much of the 11-page severance agreement consists of the mind-numbing boilerplate language usually found in such legal documents. Still, a few paragraphs jump out.
For one, Dubow and Gannett agreed to keep the agreement more or less a secret -- although GCI reserved the right to disclose its contents to the SEC. Which, of course, it did. That paragraph says:
"You and Gannett agree not to disclose or discuss the existence or the details of this Agreement with anyone other than our respective attorneys, accountants and/or your immediate family members, unless required by law. You hereby acknowledge and agree that Gannett may disclose this Agreement and/or the terms hereof in any investor communication or filing with the Securities and Exchange Commission (or other communication related thereto)."
No trash talk allowed
And both GCI and Dubow promised to not bad-mouth each other:
"You also agree that you will not make any statements, oral or written, or cause or allow to be published in your name, or under any other name, any statements, interviews, articles, books, web logs, editorials or commentary (oral or written) that is critical or disparaging of Gannett, or any of its operations, or any officers, employees or directors of Gannett, or of any of its operations."
It continues: "Likewise, Gannett, agrees that it will not make, and will instruct its current directors and executive officers not to make, any statements, oral or written, or cause to be published in Gannett’s name, any statements, interviews, articles, editorials or commentary (oral or written) that is critical or disparaging of you. Merely because a statement is made by a Gannett employee does not mean that it is made 'in Gannett’s name.'"
Did I miss anything? Please review the severance deal, then post any other details in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.
"Secret" ...you never disappoint. That is similar language found in every separation agreement. S good business reporter knows that. Oops sorry, didn't mean to offend
ReplyDeleteEvery time I see Dubow and his "Devo-do", I'm reminded of the scene in "Porky's" where the principal has a couple students and Miss Ballbricker in his office, and he keeps saying, "Can we please call it a 'tallywacker'?"
ReplyDeleteAll the while the camera does a slow zoom past the characters in the room, into a close-up of a smiling Ike portrait on the wall.
One of the ad campaigns for "Porky's" showed the smiling-Ike picture with the caption: "Why is this man smiling?"
I want to vomit.
ReplyDelete6:18 -- Come on. Defend the agreement. Defend Dubow's reward. I'd really like to hear it.
ReplyDeleteThe man was an utter disaster as a leader and a shameless greedhead as a person. He drove the stock down from a high of $90 to a low of $1.85, collected millions, fired thousands. He couldn't formulate a business plan, even with the many consultants he hired.
The only real comfort is that the Internet is forever -- and 50 years from now, people will know him as the hapless, venal idiot he is.
@8:11 - I can't defend the huge sums of money CD is getting. That is ridiculous. But to say that he single-handedly drove the stock price down is also ridiculous.
ReplyDeleteIn case you haven't noticed, there has been a huge recession. Thousands of companies have seen their stock prices plummet. Yes, CD fired thousands, but so have thousands of other companies as they tried to right their ship (and balance sheets). Cold? Sure. Unfair? Sure. But don't act like CD is some outlier compared to many, many other CEOs.
Add in the dramatic changes in the newspaper industry, and I doubt any CEO could have prevented a similar tumble to the one Gannett took. Look at other large media companies - most are in a similar (and usually much worse) boat compared to GCI. It's not like CD crashed Gannett while every other newspaper company was soaring.
Dubow was a disaster. No doubt about it. His compensation is ridiculous considering the struggles across the company. And his departure was long overdue. But to say everything bad that has happened to GCI in the past five years is due to him and his decisions is unfair and small-minded. Stop acting like one of the crazed villagers waving your torch in the air demanding retribution and start looking at the big picture of the company, the industry and the national economy. It's not as satisfying as just bitching about CD, but it makes your arguments more sound.
I take comfort knowing the guy is in pain. Maybe that's wrong, but I do. He's certainly hurt enough people to justify the karma.
ReplyDeleteAgree that it wasn't all dubow's fault. Heartily agree that his compensation is beyond whack. We are doing furloughs and buying out some of our best employees, yet he's getting nearly $6 mil in April. That is criminal
ReplyDelete8:11 -- Poor Craig. Just a victim of circumstances. Why do all those mean people blame him?
ReplyDeleteWhen you're CEO, and accepting millions in pay, you also accept that you're in charge. There's no one above you to blame. That's why you get the big bucks.
Yes, many companies fared badly. But you know what? Some companies are coming through this better than others, and better than Gannett. According to Gannett's 2011 annual report, the comany's stock lagged its own peer group by a wide margin.
The New York Times has had financial troubles, but it consistently produces better content and graphics, both in print and online, than any Gannett paper. Bloomberg is hiring many of Gannett's best reporters and editors. So is Reuters.
Dubow had no plan, other than collecting a large paycheck. That's why his regime was such a disaster. Would there have been some suffering anyway? Sure. Could someone with a brain have done better to reduce that suffering -- both from employees and shareholders? You bet.
No sane person would say it's all CD's fault. But he was an inept, uninspiring 'leader' seemingly without a single original marketable idea who eagerly filled his pockets at the trough while he aggressively reduced the value of his own products.
ReplyDeleteWould any rational person on this board dispute any of those facts?
At the very least, GM outwardly positions herself better as a leader. As for the rest of the package ... Jury still out.
Craig "Dumbow" was part of the problem, but there are others still holding their executive positions that are also to blame. I couldn't help but think during the town hall meeting how they received big bonuses while my co-workers and I had to take furloughs, have not received a decent raise (or a raise, period) or have just been laid off.
ReplyDeleteWere is my extra money for my 27 years of hard work mmm . I think Dubow got it and got shown the door in June
ReplyDeleteIt may not be Debow's fault but is also not my fault. CD gets 10's of millions of dollars, I haven't gotten a raise in 4 years and have had to take several weeks of furlough. Others have been cut loose completely. Anyone that doesn't see how unfair and immoral that is is blind.
ReplyDeleteExcellent news on Dumbow. Revenue is in freefall and our brands are whithering away, but let's send him another 6 mil. And while we're at it, let's hire another senior exec like our new President of Sales. The consultants strike again! And we're dumb enought to go along.
ReplyDeleteSo this payment is just part of the $37 mill, not a substitute or settlement for it?
ReplyDeleteNot defending this by any means, but this is typical US corporate crap. But at the same time good riddance. This man would have caused more than 5.9M damage this year if he were still there.
ReplyDeleteSo, I get one month's severance for sticking it out to the end, when we get laid off for the move to the design hubs. How does that make you feel, Craig?
ReplyDeleteMartore the beancounter deserves blame, too. But the bottom line is how many other companies jettisoned 40% of its workers while its leaders were collecting six and seven figure bonuses?
ReplyDeleteThe suits (and designer skirts) are systematically looting the company for their own personal gain. The board of directors should be prosecuted for not upholding their fiduciary responsibilities, and they should join those bandits with the fancy titles in jail.
ReplyDelete6:18 Perhaps you missed my description of this as boilerplate language.
ReplyDeleteThat doesn't mean, however, that it isn't interesting reading.
I think the "secret" deal stuff was over the top. The language is why lawyers exist. That is all boiler plate
DeleteAre you kidding? Martore would have paid him 10x that amount to get his fat ass out the door. She doesn't regret it for a moment. It's an outstanding career move.
ReplyDeleteTo the best of my knowledge, the following has never been made public before now:
ReplyDeleteDubow's back and hip problems followed an accident where he lost his footing on the last step while exiting the corporate jet, according to a Gannett Blog reader.
My reader says he learned that information from Dubow himself.
@ Jim: as usual the kind of excellent reporting that those of us left in the trenches of Gannett have come to depend on.
ReplyDelete@ 6:18 - To quote harry Truman "The Buck Stops Here." If you're the boss/CEO, that means you own those decisions. If you're stupid enough to ill informed choices before getting all your information, that is your fault.
The fact that Craigy-Poo took the big golden handshake and ran says it all. He cared nothing for the company, it's stockholders and least of all the employees. He got his. I wonder if there is a "clawback" clause in the "secret" part of the agreement that allows Gannett to take back some of the $37 million if sudden Craig is seen out on the golf course, riding a bike, running a 5K or jogging? We can dream can't we?
Happy Furloughs and buyouts everyone, love Craig the flop
Jim - guess there's some symmetry to that.
ReplyDeleteFitting that the fat cat slipped while using the company. Only at a company luke Gannett could a guy like this have flourished. the damage he caused to the company and thousands of lives can never be repaired. Martore isnt much different. just a better career killer.
ReplyDeleteCraig's story is an example of what is wrong with the American corporate model. Loyalty to workers does not matter. "Loyalty" to shareholders is all that matters. Until the model itself is transformed, you're only going to see more of the same.
ReplyDeleteMore good news for Craig, he has got 150% increase on the dividend on his shares.How's that handicap doing Craig
ReplyDeleteWhat do you expect when you take a television guy and put him charge of what was America's largest newspaper company?
ReplyDeleteThe guy came up in TV ad sales. What in heavens name did he know about running 90 newspapers? Nothing. That's why the company shrank 40 percent during his ineffective, miserable tenure.
Cd was a lot of things. but he was no friend of shareholders. at least until he departed.
ReplyDeleteI'd like to see Mitt Romney or another Republican defend why Craig Dubow deserves to have his taxes cut.
ReplyDeleteNot one positive comment even from the usual "You people just don't understand business" crowd. We're sure CD is reading too, so take a careful look CD:
ReplyDeleteNotice how much utter contempt the people you were paid to 'lead' have for you. It's far, far, far beyond the fact that you cost so many their jobs/careers/livelihoods. It's that you tore down perfectly good products to greedily line your own pockets -- a purely morally indefensible act, and bad business too.
It's that you never had any real idea about transforming the company; you just rearranged some deck chairs and trotted out buzzwords. When you spoke in public, it was painful to watch ... THIS is the guy who's supposed to take Gannett into the 21st Century?
And it could also be that you didn't even bother to hide your own contempt of the people who served under you in your day-to-day interactions. I know. I worked at the CP. You'd barely make eye contact with people there, much less engage and inspire them. Y'know, like leaders are supposed to do.
Lets hope the Boy King is happy in retirement.
ReplyDeleteNice going, Jim. Jim Romenesko picked up your reporting! David Folkenflik tweeted it.
ReplyDeleteBut nobody reads this blasted blog.
ReplyDeleteJim, he slipped getting out of a van on a corporate trip, not a plane.
ReplyDeleteUltimately, an inept overpaid doofus was taken out by the ultimate corporate extravagance. Appropriately ironic.
ReplyDeleteGood riddance. Let's hope Hunke and his gang of titled do nothing's are next. They bring nothing to the table. The salaries of heather franks management team could pay for more than a dozen reporters.
ReplyDeleteExactly what do they do now since they have nothing to do with the verticals?
I was forced out of Gannett during one of those rif's but once upon a time there were guidelines for executive bonuses according to grade levels. HR would print these confidential laminated cards with all the grades represented, their minimum, midpoint and maximum salary ranges, and a defined bonus percentage for those salaries, i.e., a grade 21 didn't qualify for a bonus but starting at grade 22 you could get 0-20%, with higher grades earning higher percentages, rising to 0-60% for grade 30 and higher. But as Gannett started raining cash the leadership became greedy and 60% just wasn't enough. They ditched this system because it wouldn't let them award themselves the windfall bonuses you see reported every year in the annual proxy statement. If you're paid $500,000annually why wouldn't a maximum $300,000 bonus be enough? For an industry struggling to survive on what planet is an $800,000 salary not enough? And this excess runs parallel to continuing furloughs and a seriously understaffed workforce. You might ask, where the hell is HR in this compensation bs? They abdicated the responsibility to create equitable and reasoned compensation programs because they're responsible for managing executive compensation, and if HR takes care of the execs they take care of themselves too. I'd bet my meager savings that HR has some of the highest bonus percentages compared to any other operation. THIS is what boards all over corporate America must fix, including Gannett's.
ReplyDelete