Biz: Gannett rewards its executives for shedding a crapload of jobs
- Were the job cuts needed? After a report came out yesterday on the unofficial Gannett Blog noting the executive pay of the company’s chief executives, there’s definitely some deserved anger due to the number of layoffs that the newspaper company had. Truth is, though, their salaries, while high, are only a dent in a much larger pie, and from one perspective, they did their jobs well.
Executive salaries vs. 2009 job cuts
- 6,000 number of jobs that were lost throughout the company in 2009 through cuts and layoffs; many workers were also furloughed
- $4.7M the amount Gannett’s chairman and CEO, Craig Dubow, made in 2009, up $1.6 million from 2008 (including a $1.5 million bonus)
- $4M the amount president and COO (and former CFO) Gracia Martore made in 2009, up $2.6 million from 2008 (with a $950,000 bonus)
Would lower executive pay help? Not really
- $240M the amount the laid-off workers’ collective salaries would be if they were each paid $40,000 per year, around average for journalists (though some are paid higher)
- $700 the amount each laid-off worker would get if that $4.2 million difference between 2008 and 2009 executive pay was spread out evenly amongst them
Where the cuts helped most: Stock prices
- 907% the increase in stock price since 2009
Uncomfortable reality
- » The business consideration: Truth of the matter is, from an investing and financial perspective, Craig Dubow and Gracia Martore look very smart for cutting off some of the dead wood, even if it screwed over thousands of journalists as a result.
- » The real problem? Same as many other newspaper conglomerates: Gannett’s simply too big. It holds jurisdiction over many markets large and small, and as a result of heavy debt burdens from the financial crisis, it and companies like it, including McClatchy and Tribune, have had to make some tough decisions to protect the whole beast. Seems like all these mergers and buyouts had the effect of damaging local newspapers and local journalism. Financial sense and editorial sense are two different senses. source