Friday, March 16, 2012

Bulletin: dramatic '11 pay cuts for Martore, others; directors acknowledge investor unrest over pay, but 'significantly' higher stock awards set this year

[Updated at 10:59 p.m. ET with more details, including end of executive lunches.]

Corporate has just disclosed 2011 executive compensation figures in this regulatory filing that show the significant impact of a new compensation formula, a decline in revenues and profits -- and investor unhappiness with big pay packages in recent years.

Gracia Martore, promoted to CEO in October from COO, got compensation valued at $4.7 million vs. $8.2 million in 2010, the proxy report to shareholders shows. At her request, she received a cash bonus of $1.2 million, less than the $1.5 million the board said she deserved, the report says.

Craig Dubow, who resigned as chairman and CEO for medical reasons in October, was the lone executive to get more: $12.3 million vs. $9.4 million. That included a previously disclosed $5.9 million payment under his disability plan.

The other four highest-paid executives from this table:
  • Paul Saleh, chief financial officer, $2.2 million vs. $2.9 in 2010.
  • Bob Dickey, president of the U.S. newspaper division, $2.7 million vs. $3.4 million
  • Dave Lougee, head of the broadcasting division, $1.7 million vs. $2.2 million
  • David Payne, hired in March as chief digital officer, $1.6 million. That included a $125,000 hiring bonus, solely for agreeing to join the company.
This is the first time the highest-paid executives took across-the-board pay cuts since 2008, when the economy started entering what became the Great Recession.

Facing investor unrest
Management at Gannett has been scrutinized for eye-popping pay packages amid massive layoffs and other austerity measures. That was reflected last year in the results of a non-binding "Say on Pay" shareholder vote, where a significant minority said they disapproved of pay practices.

In today's report, the board's executive compensation committee said it "took note of the minority vote against the Say on Pay proposal last year, which reaffirmed the committee’s desire to undertake a comprehensive review of the company’s long-term incentive program."

In another sign the top brass may be taking that seriously, the board noted that "all 12 senior executives who serve on the Gannett Management Committee volunteered to forego 2012 base salary increases."

The belt tightening also reflects what appears to be a change in management style under Martore, who has through several earlier gestures indicated she wants to improve the image of the CEO's office, which was badly tarnished under her predecessor, Dubow. Today's report reveals, for example, that the long-standing practice of providing lunch to senior executives ended in November, a month after Martore became chief executive.

The lower compensation amounts show a change in practices, formalized last fall, that effectively delays some stock awards now called Performance Shares. They are subject to the company's stock hitting certain performance targets over the next three years. (Here's the executive summary of the changes.)

In Martore's case, for example, she got restricted shares -- stock she won't receive until a later date -- valued at $1.7 million in 2010; last year she didn't get any. Her stock options were valued at $2.8 million in 2010. Last year, the got half as much: $1.4 million.

Bonuses get reduced
Indeed, the board said that while last year's pay was lower than it might have been under the old system, the portion that is stock awards "will be significantly higher in 2012."

Bonuses were cut, "reflecting declines in the company’s revenues and profit notwithstanding strong operating cash flow generation, significant debt reduction, and meaningful progress toward the goals of its strategic plan,'' the report says.

Plans for the new stock-based pay formula first emerged in April 2011, the report says, with more details disclosed in the recently filed annual 10-K report to U.S. Securities Regulators.


  1. This is SO sad.....

  2. Just $4,699,999 more than she's worth!

  3. Come on people can't you acknowledge any effort to change things.

  4. Effort is a start, but as they keep cutting the shit out of our newsroom and forcing good people to "retire" and making us all take pay cuts (furloughs)), they should do something dramatic, like cut bonuses altogether for a year.

  5. Wipe those tears away with your designer scarf, GM!

    Don't worry, you and your sycophants still won't drop into the 2%.

  6. @6:47 p.m...... keep on drinking that kool-aid, as a manager at a daily paper for Gannett, I am working 6 days a week since my department was consolidated, no raise last year, had to take a furlough while the sales department (which aren't pulling in revenue) didn't have to because it was based on salary, and did not include their commission. And I got no bonus, so no I don't think they have done anything extraordinray by taking less, if they really cared about the company, that money could of been used in alot of more efficient ways.

  7. Why didn't you get a raise when so many others did? Just asking.

  8. @8:28 all raises were frozen at our site...probably thanks to our wonderful sales staff who wander in at 9, sit around and talk to each other go to lunch at 11 and wander back in at 3 and sit talk until 5, or they come in at 9 and have to go home because they or their children are ill, so that way they get paid for the whole day since they are salary.

    1. Why sale when the ads run wrong or not at all or people just dont get there paper or customers fuss.about what is in the paper . I after 330

  9. And Banikarim gets paid for doing what?

  10. Reading documents like this is like reading Greek. For example:

    "On January 1, 2012, the first day of the Performance Share Incentive Period, the long-term equity award value for each NEO was translated into an award of Performance Shares based on the present value per share of the expected payout as calculated using the Monte Carlo valuation method and an award of RSUs based upon the Company’s closing stock price on December 30, 2011."

    "Monte Carlo" valuation method?

  11. Fun fact: Dubow's final payout included $60,000 for accrued and unused vacation.

  12. Monte Carlo valuation was created by academics and economists to help define the value of stock options when variables are uncertain.

  13. Fun fact II: USA Today Publisher Dave Hunke took a big pay cut last year, too, but we don't know exactly how much. It appears it could be in the neighborhood of $1 million.

    Here's how I get to that:

    Today's proxy report lists the six highest paid executives last year. Of those, Chief Digital Officer David Payne was the lowest paid, at $1.6 million.

    That means Hunke earned still less.

    What did he make in 2010? About $2.5 million, including the $452,100 estimated value of stock awards and $520,960 in options.

  14. Hunke will be dumped before the end of Q2.

  15. Wow Jimmy.

    You can't acknowledge any positive change when it comes to senior management at this company.

    When, EVER, did the executive pay numbers GO DOWN year over year????

  16. Craig Dubow ruined this company
    Gracia is trying to fix it but it's beyond repair

  17. 10:27

    1. It's not at all clear that these reflect any kind of permanent re-setting of executive pay. We won't know until a year from now, when we see the first measurable impact of the new Performance Shares awards.

    For those reasons, I hesitate to characterize these as positive or negative.

    2. In fact, overall executive pay fell in 2008 vs. 2007. See this table.

  18. Why do any of them deserve ANY bonus? What a joke.

  19. This comment has been removed by a blog administrator.

  20. I vote for no bonus
    I didn't get one
    I worked just as many hours, probably more
    My furlough hurt my bottom line a hell of a lot more than their furloughs hurt them
    Why in the fuck does anybody deserve a bonus? Especially someone already making an obscene amount of money while ordering one cutback, layoff and buyout after another?

  21. Where else would any of these managers be making even 25% of these wages anywhere but Gannett? Criminal.

    Hunke? Deputy chamber of commerce director in poughkeeepsie.

    Banikarim? Greeter at a Reno casino.

    Marymount?copydesk chief at the Fresno Bee.

    Beusse? Ringmaster at Barnum & Baileys b. team troupe.

    Heather Frank? Costco food sampler.

    Bat Boy? T ball assistant coach.

  22. Dickey: assistant night manager, 7/11
    Silverman: Gov.Chris Christie impersonator.

  23. Typical commenter on this blog: unemployed.

  24. @ 7:12

    I was, because they laid me off even after numerous positive reviews. I'm not anymore. And
    I make a LOT more.

    And I STILL think it's a hard pill to swallow. There should be ZERO raises and ZERO bonuses for corporate management, including collective salary decreases for them all in an amount equal to the pay of all the employees laid off that year.

  25. Bonuses for these mismanagers and liars are like free booze for alcoholics.


  26. Is it lost on everyone that she may also be getting paid less because she is a .... she?


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