'Baltimore Sun' Guild Files Motion Against Tribune Bonus Plan

By Joe Strupp
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1004000231

NEW YORK: The Newspaper Guild unit at The Baltimore Sun has filed an objection in bankruptcy court to Tribune Company plans to award some $69.9 million in bonuses to top executives, claiming the move is unfair to rank-and-file employees.

The objection was filed in U.S. Bankruptcy Court in Delaware on Tuesday, according to a copy of the motion. It states: "the proposed bonuses to top executives are excessive and may, in fact, have a detrimental effect on motivating others who contribute to the bottom line. Indeed, the payment of disproportionate bonuses to a select group of executives may have the opposite effect on the rank-and-file employees."Bill Salganik, president of the guild unit, said in an e-mail that the company's action is unacceptable: "If Tribune has $69.9 million available to spend, we think it would be better spent on providing more and better news and service for readers and viewers and advertisers. That would not only serve the public better, but would be better for the business in the long run."A hearing on the Tribune request for the bonuses is set for Aug. 11.

Tribune filed for bankruptcy protection last December.

Joe Strupp (jstrupp@editorandpublisher.com) is a senior editor at E&P.

Tribune Co. bonus Plan To Be Heard In Court

(AP) — A Delaware bankruptcy judge agreed Thursday to hear arguments next week in a dispute over the Tribune Co.'s request to approve bonuses totaling about $70 million for the company's top managers.

Judge Kevin Carey agreed to a Tribune Co. request for an expedited hearing on its motion seeking to prevent the release of a compensation consultant's report to a labor union challenging the bonus plans. The judge is scheduled to hear arguments Tuesday, in conjunction with a previously scheduled hearing in Chicago-based Tribune Co.'s Chapter 11 case.

In an objection filed this week, the Washington-Baltimore Newspaper Guild said the bonuses are unwarranted and requested access to the compensation report that Tribune has filed under seal.

"At a time when media businesses are suffering incomparable losses and struggling to survive, the debtors have proposed spending $69.9 million to reward their top management for financial performance that, year-over-year, evidences declining fortunes," attorneys for the guild wrote. "While creditors face limited recovery on their claims, and most rank-and-file employees live with frozen pay and benefits, the debtors believe a proper exercise of business judgment results in millions of dollars distributed to management."

The guild is joined in its objection by the Newspaper Guild of New York, which represents 29 employees at television station WPIX, International Brotherhood of Electrical Workers Local 1212, representing just under 100 staff and freelance broadcast engineers at WPIX, and by two Baltimore-based Teamsters locals.

Tribune, which owns the Los Angeles Times, Chicago Tribune, The Baltimore Sun, The Hartford Courant and other dailies, as well as 23 TV stations, sought bankruptcy protection in December because of dwindling advertising revenues and a $13 billion debt. Much of that debt was amassed when real estate mogul Sam Zell took the Tribune Co. private in late 2007.

Tribune Co. contends that the incentives are based on specific performance targets and are needed to retain key employees facing significant industry challenges while working toward a successful reorganization, and to attract top-tier management talent if needed.

Tribune Co. attorneys say they have offered to share the compensation report with the guild, but that the guild has refused to agree to confidentiality provisions. The company has argued that the report needs to be kept under wraps because disclosure of compensation information and confidential business goals it contains could provide an advantage to competitors.

"Moreover, such information likely would affect employee morale and potentially create resentment among certain employees of the debtors as they compared their compensation to that of their peers, and could adversely impair the debtors' ability to negotiate and maintain favorable employment agreements in the future," Tribune Co. attorneys wrote in seeking to keep the report under seal.

Tribune Co. notes in court filings that its creditors committee, which includes a representative of the guild, supports the bonus plan, as does a steering committee of the company's senior lenders.

The U.S. trustee in the case, while not formally objecting, has said Tribune Co. has not provided sufficient information to justify the bonus plans or the sealing of the consultant's report.