Friday, March 16, 2012

Value of Dubow's severance package lowered

A year ago, Corporate estimated that Craig Dubow, 57, could collect $37.1 million in retirement and disability benefits if he left the company for medical reasons -- which he did, last October.

In today's new proxy report to shareholders, Corporate produced a new, lower figure, which reflects a decline in the estimated future value of his stock awards and options.

But it's still a whole lot of loot:



  1. Absolutely sickening
    The guy destroyed the company and a lot of lives and he gets that kind of money.
    Corporate America is really F'd up.

  2. Glad to see him tightening his belt. Every little bit helps!


  3. In other words, Jim and everyone else who ran wild with that $37.1 million amount was wrong. Not only that, but either they knew they were wrong or should have known they were wrong. Yet they ran with it anyway.

    Care to explain yourself, Jimmy? Just saying: "That's what Corporate said last year" is weak and disingenuous. Don't waste our time with that excuse.

  4. Jim merely reported the higher end of the estimated payout, which is what every business or sports reporter does when reporting things like salary, bonuses and such.

    The number remains staggering.

  5. He didn't report it that way, 1:34. He said Dubow was getting $37.1 million, even though he obviously wasn't.

    It wasn't the "higher end," as you claim. Gannett had to list that figure in its report for SEC reasons, but Dubow was never going to get all of the money.

  6. 1:34 In fact, in today's report, Corporate updated the retirement/disability figures for all the executives -- not just Dubow.

    For example, a year ago, the estimated value of Martore's retirement and disability payout was $23.6 million.

    In today's report, on Page 47, Corporate revised it downward, to $22.3 million.

    Likewise, the payout estimates were revised for Paul Saleh, Bob Dickey, and Dave Lougee.

    I haven't compared them yet, but I expect Corporate also published new estimates for the value of Golden Parachutes for Martore and the other so-called named executive officers.

    All these numbers change annually with the issuance of new proxy reports. In between, the only correct numbers we can cite are the most recent ones published.

  7. God Bless Craig Debow....he's gonna need it

  8. Nobody will report that Payton Manning will get at least league minimum $925,000 annually when he signs his next contract. The number that will be reported is the maximum value of the contract - with totaled bonuses and enhancers for the term of the deal. Even the signers of the contract don't think he'll win five Super Bowls in a row, but if the spiff is a million each, that's 5 mil added to the contract total in the reporting.

    Seriously, the guy is only getting 6 million less. But he's still getting a MAXIMUM (happy, 1:24?) of $31,829,480 - not one thin dime of which is enhancing Gannett future profitability.

    That's the real issue, and why people are upset that CD walked away with millions while we sat on furloughs.

  9. Actually, he's not getting a maximum of $31,829,480 ... because the number could be adjusted *up* if stock awards and options become more valuable in the next year.

    Oh, wait. This is Gannett. There's no way the value will go up. I guess that number is the maximum.

    Poor guy.

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  11. Dubow also gets lifetime medical insurance and all sorts of other helpful bennies.

  12. "So Jim was off by a few million."

    Nice job of encapsulating what people here think. In other words, so Jim was wrong. So what? After all, the version he told was better at stirring people up.

  13. Yep, sickening amount of money. But it mystifies my why Jim insisted on running with "the published" number, even though I (and others) argued regularly and at length that the number was not ever going to be correct. Would it really have been so hard to do some math (it was right in front of you) and say he would likely get around $30M? You wouldn't be in this stupid place now where people can, correctly, call you stubbornly incorrect.

  14. 10:15 I remove comments that make fun of people's names, including spelling the former CEO's name as Dumbo.

  15. Corporate America is seriously messed up. Millions lost in stock value, tens of thousands laid off, and the guy goes out like he was a winner.

    He did not do anything to advance the company.

  16. Perhaps I can turn this into a useful lesson in the benefits and importance of attribution -- and of precision in reporting facts and figures.

    In September, when I was the first to report he was in line for an eight-figure payout, I wrote:

    "Gannett would pay Chairman and CEO Craig Dubow $37.1 million in disability benefits, stock awards, pension and other payments if his new health problems force him from his job permanently, according to company documents filed with federal regulators." (Emphasis added.)

    To have instead reported that Dubow would receive "about $30 million" would have been hugely incorrect, and still would be today -- whether the figure was attributed or not. In September, that figure would have been off by 24%.

    As of yesterday, the new revised and correct figure is $31.8 million, according to company documents filed with federal regulators.

    Using precise figures and attributing them to public documents is more convincing to readers. It anticipates their reasonable question: "How do you know that's true?"

    To be sure, the ultimate amount paid to Dubow will almost certainly be yet another one. That's because, as with all such figures, this is a point-in-time snapshot, not unlike the monthly jobless rates and employment counts, which the Labor Department is constantly revising.

    The value of Dubow's retirement and disability benefit eventually will depend on factors including, most importantly, how long he lives.

    For example, here's what the company said on Page 52 of yesterday's proxy report about one portion of his severance:

    "Mr. Dubow is entitled to a disability benefit, payable monthly, whose estimated present value as of October 6, 2011 was equal to $6,213,523, calculated applying the following assumptions: (i) Mr. Dubow remains eligible to receive disability benefits for the maximum period provided under the plan; (ii) the disability benefits are reduced by certain offsets provided for under the plan (e.g., a portion of Mr. Dubow’s SERP benefits); and (iii) certain IRS-prescribed mortality and interest rate assumptions."

    That's today's lesson. You may now go back to your Local Information Center and focus on your Passion Topics.

  17. But you knew the $37.1 million figure would not be correct, and yet you ran with it anyway.

  18. 2:15 To extend your argument to my example, the media would never report the monthly jobless data because it's almost always subject to revision.

  19. 2:15. Also, how do you feel about the accuracy of Corporate's new figure, $31.8 million?

    If you disagree with that figure, what is the correct one -- and how did you arrive at it?

  20. It appears all you were concerned with was being first (you were), and after that publishing the most damning number. Had you said in the original story, or in one shortly after, the type of things you said at 1:42 you would be bullet proof. But from afar it looked like you were intoxicated with the attention you got from other outlets picking up $37.1M. That became YOUR number, and you stuck with it. But again: you could have and should have been more precise. You had the opportunity to explains things, but you spent your time damning an overpaid exec, even if the numbers were only kinda correct.

    And I'm puzzled by your last sentence at 1:42: "You may now go back to your Local Information Center and focus on your Passion Topics."

    Is that a way to say "all you little people out there in your meaningless jobs suck?"

    Or is that just a playground retort, the kind when you are stuck but feel like you need to scream something, such as "well, your mother's fat"?

  21. By 2:15's logic, whoever signed off on the corporate document that went to federal regulators also supplied information they knew to be incorrect. Call the attorney general.

    There is no accuracy issue here. The early reporting was attributed to information provided by a source, as was the update. If the the quote is correct, the accuracy blame lies with the source, not with reporter. It's reasonable to assume that it is customary for businesses to give accurate information to the government.

    I could see the concern of 2:15 if Jim had found a way to inflate CD's payout - perhaps by choosing a wildly optimistic stock value or having him live until 114.

    Again - this is pointless. What is germane is that we are making a monthly payment to a person who is making ZERO contribution to the company's value. These payments may go on for decades, and whether the final price in 2045 is $30 million or $36 million is a sideshow.

  22. Say -- just how did Dubow injure his back? And what state was he in when he did it? I'll bet some people know. But they won't tell.

  23. 3:45 Dubow told one of my readers he slipped while exiting the Corporate jet, according to that reader. I wasn't given the geography, however. 

    In a comment, another reader said this happened while he was exiting a transport van.

  24. The defenders here keep trying to find other things to downplay this.

    Jobless stats and other reports are irrelevant. Jim knew the $37.1 million figure was inflated. He used it anyway. That is the only relevant issue here. Either stick with that and find a way to defend it, or admit defeat. Don't bring up other irrelevant issues.

  25. As public relations strategies go, shooting the messenger is fairly ineffective.

  26. Dear god, 4:48, give it up! He gave them numbers that Gannett presented and attributed them to Gannett. There is no more accurate number to give. End of story.

    If you're arguing beyond that, maybe you need to learn a little about how journalism works. You must be a Gannett bigwig to be that clueless.

  27. 5:19 To understand the emotions here, bear in mind that Gannett Blog amplifies information that Corporate would often prefer to keep quiet.

    The $37.1 million figure received widespread attention after it appeared here, including in The New York Times and The Washington Post. That is no doubt frustrating for some people at a time when Gannett is trying to restore its public reputation.

    But this is business in a world made more democratic by social media.

  28. Interesting that Craig would attack Jim here for reporting what Gannett Estimated the patent to the failed CEO would be. As if $32 million were more defensible?

    Craig, its your fault all your stock options lost their value, No one else's. Had you even a clue of managing the company, the stock price would not have collapsed.

    Go back to recuperating from your disability.

  29. Nope. None of that is a defense of what you did. You used information you knew to be less than accurate.

    You must not have a defense. Just admit it.

  30. Pfft whatever. Guess what you've just discovered - the first number is what sticks in people's minds, not the correction.

    Two years from now people will still be saying $37 mil and you'll still be "but, but, but..." - and we'll have two more years of estimated cost. See you next year when it rises to $42 mil and you castigate Jim for going too low.

  31. A long missed point is, that, despite what you feel about Dubow, the man had a pension coming from more than 30 years with company, higher than others obviously, but he gets that whenever he left. It was a vested benefit. Similarly, he gets disability like many who become disabled. If you make $50k a year, become disabled at age 55, you get $300,000 in disability payments plus your lump sum pension payment of probably something like that etc. etc. In other words, more than a half million. When you add it all up probably more than that, considering matches to 401k and so forth. So anyone who goes out with long service and a disability will get a lot of money. Period. Keep it real, ya'll.

  32. 7:19 It's likely that Gannett won't be producing any more updated estimates after this year. Once an executive is no longer employed, the reporting obligation ends.

    7:23 makes and excellent point.

    The Washington Post now has an Associated Press story on its website under this headline: Former Gannett CEO leaves with $32 million package after resigning for health reasons.

  33. 7:19, if people are still saying "$37 million" two years from now, then that's the problem with Jim's reporting.

    Good of you to illustrate that while trying to defend him.

    Guess there's no good defense. People have had all day to offer a defense, and they have yet to succeed.

  34. Since none of Jim's critics (you KNEW the number was wrong . . . ) seem to understand contracts, let me explain them in a way even YOU can understand.

    Let's take the typical NFL contract between a team and a player. One of the most talked-about was the contract Donovan McNabb signed with Washington in late 2010. Everyone knew McNabb was on the downside of his career (as a Viking fan, I saw the BOTTOM) and yet, McNabb was offered (and signed a FIVE YEAR DEAL WORTH $70 - $78 MILLION according to the headlines).

    Now, since McNabb left Washington to "play" for Minnesota, how much of the $70-$78 million did he get? A LOT LESS. Less than Dubow. About $3.75 million from Washington. Then $5 million with Minnesota.
    Read the original story at the link.

    As for Dubow (and any other high muckety-mucks), the future monies aren't etched in stone. As a wise man once said, "Hard to say . . . always in motion, the future is."

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  36. Following is an edited version of 11 p.m.'s comment:

    Dubow fell down the corporate plane's steps. For that, he got more than $30 million.

    You could argue that he deserved more for his disability than his tenure as CEO. Part of his difficulties as CEO may have stemmed from the painkillers he had to use. (And I don't fault him for that; back pain is excruciating.) Still, you'd think that a CEO [using] painkillers would be something that the board of directors would address, and that shareholders should have been informed of.

  37. From the WSJ:

    Mr. Dubow's tenure as Gannett's CEO coincided with deep cutbacks in staff, triggered by a sharp decline in print advertising, the main source of revenue in the company's publishing division. Gannett's revenue from print advertising plunged from $5.2 billion in 2005 to $2.5 billion last year. Gannett's stock price plummeted by 86 percent while Mr. Dubow was CEO, dropping from $72.69 to $10.45.

  38. 9:03, none of that has anything to do with this issue. If anyone does not understand it, you would be the one.

    Clearly you and the others have no defense. You embarrass yourselves when you continue to bring out unrelated issues.

  39. Is dubow still playing golf at Trillium? Nice track in the Blue Ridge mountains. Can you claim a disability, rake in $32 mil and still play golf?

  40. 11:53 - you embarrass yourself by not realizing that your point has gathered no traction.

    I believe your point was that Jim shouldn't have reported the $37 million corporate estimate because he should have known that in time that number would have been proven incorrect.

    Several different respondents (including Jim) have pointed out that a)corporate provided the numbers, b)contracts based on assumptions can change, c) it's common practice to report the good-faith estimate and follow with updated estimates (i.e. jobless claims), d) there is no other way to estimate these costs outside the proxy reports.

    Jim reported what the company told the government. Look up last year's proxy report. The table on page 46 lists potential payment obligation upon disability as 37,089,036 to Mr. Dubow.

    Is your whole complaint that the lede to Jim's post last year said Gannett would pay versus could pay? That flies in the face of what proxy reports are for - to outline reasonable expectations of the company's obligations.

    If the company hadn't a reasonable expectation last year that Mr. Dubow's payout could reach $37 million, there would have been no benefit to putting that number in the report.

    You continue to ask for a defense of a year-old word choice that doesn't need defending.

    Instead, you should defend spending $31 million on an ex-employee with no future worth to the company - and why he should see any more money than any other 30 year employee who leaves on disability.

  41. If Dubow was getting $150 instead of more than $30 million, this debate might matter. The fact is his severance was, and still is, the type of reward that should be illegal. Most of us couldn't figure out how to spend that much if we tried. But we have former colleagues, and co-workers, who are struggling to pay rent/house payments and grocery bills. We have "valued" employees who are given raises that don't cover inflation, then lose those to furloughs, then are told they shouldn't count on raises in the future unless then win the Pulitzer or something, then are told that all the savings from layoffs and furloughs went to exec bonuses. There is a special place in Hell for these people, if it isn't already booked with reservations for Neuharth and other Gannettoids.

  42. 9:08, you can write another novel, but the point still is that Jim either knew or should have known the $37.1 million figure would not hold up.

    That has been explained here several times. Either you don't get it, or you choose to ignore it.

  43. 9:08 Is correct. I should have written "could" instead of "would."

    Here's why. A year ago, the company said:

    "If the employment of a NEO is terminated upon the executive’s disability, then the executive would be entitled to the following post-termination benefits."

    Then it listed dollar amounts for Dubow and the other named executive officers below this heading: "Potential Payment Obligation Upon Disability."

    The word "potential" indicates the dollar amounts might change.

    This illustrates why Gannett needs to retain assignment editors and copyeditors. Someone needs to stand between the reporters and the public.

    With all this in mind, I've now tweaked the language in this post.

  44. Well, Jim, then you should have used the word "potentially" a year ago. Then you should have clarified that Dubow was never going to get $37.1 million.

    You did none of that.

  45. 2:03 What do you think about the construction of this Associated Press lede, from a story that moved yesterday?

    By Associated Press, Published: March 17

    MCLEAN, Va. — Former Gannett Co. CEO Craig Dubow’s received a severance package valued at about $32 million after chronic health problems prompted his resignation from the largest U.S. newspaper publisher.

  46. I think there should not be an apostrophe and an s after Dubow.

    But AP has its own problems. Again, though, other examples have nothing to do with this issue. Clearly you have no defense.

  47. 2:34 How do you feel about this sort of SEC information being made more widely available on blogs such as mine?

  48. If you reported it accurately, it would be a good thing.

  49. The Truth Teller3/19/2012 12:26 AM

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  50. Here's an edited version of 12:26's comment, minus name-calling:

    Sorry, but you can't find a positive spin for Craig getting $37 million or $31 million based on his performance (or lack there of).

    And to take Jim to task for reporting information that was out in the public domain is shameful.
    I have a chronic back issue and pay out of pocket fro my chiropractor until I reach the $3K deductible mark, when our wonderful health care plan kicks in. Do you think Mr. DuBow has to satisfy the same requirements as the worker drones who at least provide some benefit to the company? No, he can play a round of golf and get the best care (our) money can buy.

    So have a care, because you'll get little sympathy here either for you or the under performer who was your boss.

    Bottom line, $31 million is still too much money for that failure.

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  52. Golf is good for his "condition.."

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  54. While everyone here argues over "would" and "could" Craig Dubow walked away with an ungodly amount of money from a company he did nothing for. WAKE UP all you Gannett apologists....that's the issue.

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  57. Craig Debow is a startled deer standing infront of a bigass truck named KARMA

  58. THE SAD THING is that Gannett's Board continued to reward such terrible performance (for example, a sharp decline in print advertising, Gannett's revenue from print advertising plunged from $5.2 billion in 2005 to $2.5 billion last year. Gannett's stock price plummeted by 86 percent while Mr. Dubow was CEO, dropping from $72.69 to $10.45... pulled from the WSJournal) by giving him hugh raises and options plus year after year "bonus"... during those years of decline over declines in so many business categories.

    Shame on the Gannett Board...and it continues.

  59. No, 1:01, the issue is that Jim reported a number that wasn't accurate. You and others keep trying to shift away from that. It shows you have no defense.

  60. 6:26 To use one of my favorite PR phrases: We've moved in. Please join us.

  61. Jim, I have no interest in joining with someone who runs with inaccurate info.


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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