Someone had to take a stand against ridiculous bonuses and high executive pay and that person was Gannett CEO Gracia Martore.
A definitive proxy statement filed Friday with the Securities and Exchange Commission shows that Ms. Martore, who ascended to the CEO position this year after the resignation of Craig Dubow, asked that she not be given the $1.5 million bonus the Executive Compensation Committee wanted to give her.
Thanks to that selfless act of generosity, the Gannett CEO, who required all employees in the newspaper division to take an unpaid one-week furlough during the first quarter of 2011, will only receive a $1.2 million bonus and the top five company executives will only receive $3,070,000 in bonuses.
Although the committee determined that Ms. Martore should receive a bonus of $1.5 million to reflect her performance in 2011, her promotion to CEO and her leadership in executing on the company's strategic plan, Ms. Martore requested that her 2011 bonus be less then her 2010 bonus, and the Committee honored her request by reducing the amount of her 2011 bonus to $1.2 million.
While the tone of the proxy report makes it sound as if this is some form of belt-tightening on the part of the executive compensation committee and Ms. Martore, the committee had decided last year that Ms. Martore's bonus target should be $900,000. It surpassed its own guideline by $600,000, though the final amount was set at $300,000 less.
Oh, and by the way, Ms. Martore's total pay package for 2011 was only $4.6 million. Imagine what it could have been if she hadn't taken a furlough. And while Gannett continues to reduce its workforce on a frequent basis with meager severance packages and limited employment opportunities, Ms. Martore has no reason to worry that the same thing will ever happen to her. The proxy statement indicates she will receive a $14 million severance if she is ever shown the door, her family will get $21 million if she dies and she will receive $22 million if she is disabled and unable to continue her duties.
Ms. Martore's base salary has been cut from $950,000 to $900,000 ($300,000 less than her bonus), according to the statement, while her salary was decreased an additional 6 percent because she, too, had to take a furlough.
All 12 members of the management committee agreed not to take a salary increase, according to the proxy statement. Of course, they really don't have to worry about it since none of them appear to be heading toward the soup kitchen any time soon.
In addition to Ms. Martore's $4.6 million, the other top executives were paid as follows:
- CFO Paul Saleh approximately $2.2 million.
- Robert Dickey, president, newspaper division $2.7 million.
- David Lougee, president, broadcasting division $1.6 million.
- David Payne, chief digital officer $1.5 million.
The biggest payout of 2011, of course, went to former CEO Craig Dubow, whose pay package totaled $12.2 million, including $5.9 million when he retired.
Company officials also received quite a few perks as part of their compensation including the following:
Amounts for 2011 reported in this column include (i) annual life insurance premiums paid by the company for Ms. Martore in the amount of $31,650, for Mr. Lougee in the amount of $31,172 and for Mr. Dubow in the amount of $49,465; (ii) matching contributions of $7,350 to the 401(k) accounts of Ms. Martore, Mr. Dickey and Mr. Dubow and matching contributions of $11,250, $12,250 and $10,938 to the respective 401(k) accounts of Mr. Saleh, Mr. Lougee and Mr. Payne; (iii) Company contributions into the DCP accounts of Mr. Saleh and Mr. Lougee in the amounts of $21,500 and $36,101, respectively (for an explanation of these payments, see discussion of the Deferred Compensation Plan beginning on page 32); (iv) premiums paid by the company for supplemental medical coverage for all NEOs other than Mr. Payne; (v) company-provided automobile, (vi) occasional personal use of company aircraft; (viii) payments to Mr. Payne in the amount of $47,921 to reimburse him for travel costs following his hiring; (vii) company-provided lunch during working hours, as needed (this practice was discontinued in November 2011); (viii) legal and financial services; (ix) Gannett Foundation grants to eligible charities recommended by each NEO of up to $15,000 annually; and (xi) premiums paid by the company for travel accident insurance.
The NEOs also occasionally receive tickets to sporting events for personal use if the tickets are not needed for business use, for which the company does not incur incremental costs.
And that doesn't even compare to what Craig Dubow received after he left the company:
Mr. Dubow resigned from the company due to disability effective October 6, 2011. In connection with his resignation due to disability, Mr. Dubow entered into a separation agreement and release with the company dated October 6, 2011 discussed under the "Additional Information Regarding Summary Compensation Table and Grants of Plan-Based Awards Table" and the "Post-Termination Payments to Mr. Dubow" sections of this Proxy Statement.
Amounts for 2011 reported in the All Other Compensation column for Mr. Dubow include, in addition to the benefits described in footnote 6, a cash payment of $5,900,000 payable to Mr. Dubow following the six-month delay following this termination of employment required by Section 409A of the Internal Revenue Code, $350,769 paid to Mr. Dubow under the company's disability plans, $60,000 paid to Mr. Dubow for accrued and unused vacation and the following additional post-employment benefits: (i) prior to Mr. Dubow becoming eligible for Medicare, health insurance coverage under the company's retiree medical policy,(ii) a Medicare supplement and reimbursement for the cost of Medicare Part B coverage, (iii) ownership of existing computer and other home office equipment at the time of his termination of employment, and (iv) reasonable access to company facilities, including the use of an office and secretarial assistance.
Nice unemployment if you can get it.
It's a shame that Gannett can't show the same dedication to its customers, the readers of its community newspapers and USA Today and the people who have made the company millions despite these hard economic times that it shows to the people whose answer to every problem it seems is to cut jobs and service and then to try to convince readers they are actually receiving a better product.
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