|Gannett CEO Craig A. Dubow|
Monday, April 11, 2011
New York Times reporter David Carr wrote in an April 10, 2011 article " Just in case Gannett employees thought 2011 might bring better news after years of layoffs and furloughs, the year was just four days old when a note landed in the in-box of people who work for the community news division saying, once again, they were required to take an unpaid week off."
Carr goes on to report " After explaining that revenues at the newspaper giant continued to be soft and the outlook was uncertain, Robert J. Dickey, Gannett’s president of U.S. Community Publishing, said, “I know furloughs are very hard on you and your families and I thank each of you for the continued commitment and great work.”
Mr. Dickey made it clear that not only did the company’s executives feel their pain, they would share the sacrifice, noting that he too would take a furlough and that Craig A. Dubow, the chief executive, and Gracia C. Martore, the president and chief operating officer, “each will be taking a reduction of salary that is equivalent to a week’s furlough.”
Carr wrote "Revenues have declined at the company four years in a row and the stock price is down more than 70 percent, but even divine intervention could probably not fix all that is wrong with Gannett and publishing in general. The company has 23 television stations, but with 82 newspapers, many of them dailies in small and medium-size cities, the company was bound to be clobbered by a recession on the one hand and a systemic flight from advertising in newspapers."
Gannett, a company best known for publishing a newspaper mostly only read in hotels, and for decimating and demoralizing community newspaper staffs across the country, saw a marginal revenue drop last year and, according to the company, operating cash flow was $1.3 billion, up 19 percent from 2009, while debt was reduced by $710 million, to $2.35 billion. That’s a testament to what Wall Street would call “aggressive cost management.”
But out in the rest of the world, we know that generally means dumping bodies overboard, and Gannett is a high achiever when it comes to downsizing. In the five years that Mr. Dubow has run the company, its work force has gone from 52,000 employees to just over 32,000.
Most of its employees are nonunion, so the leadership is free to manage as it sees fit, including telling some people their careers are over and telling the people that remain not to come to work. Under Craig Dubow, who became CEO in 2005, the company has now eliminated 20,000 jobs -- more than one in every three.
Although CEO Craig A. Dubow took a 17 % pay cut for 2011, this gesture was offset by a cash bonus of $1.75 million for 2010. COO Gacia C, Martore received a $1.25 million bonus. They were also received stock, options and deferred compensation rasing their combined compensation packages to $17.6 million. The top six executives at Gannett will take home compensation packages of more than $28 million, if certain financial projections come to fruition.
Two years of mandatory week long furloughs for the rest of Gannett employees saved the company $33 million, harships for Gannett workers that covered less than half the executive compenseation of the top six bosses over the same period.
“It has been incredibly galling to watch them lining up for these big compensation packages while they have squandered every opportunity to make the kind of changes necessary for the company to survive,” said an employee of USA Today. "Meanwhile, we have had furloughs three years in a row, so you can’t help but feel exploited and angry.” Mr. Carr noted that employees he interviewed feared there would be retaliation if they spoke for attribution.
In announcing Dubow's hefty package, double the previous year, Gannett was very clear about was driving the certainly generous award: “The company achieved substantial expense reductions through a variety of efforts, including continued centralization and consolidation efforts and salary freezes, positioning the company for growth as economic conditions improve.”
On the Gannett Blog, gannettblog.blogspot.com an independent site about the company, employees have expressed a high level of frustration and outrage about the compensation going to the folks at headquarters while people in the field watch newsrooms and their compensation shrink. “Pure and simple, a laugh in every employee’s face,” said one anonymous poster on the day the packages were announced.
Another posted, "Have they (the CEO, COO and others) no shame? It takes no leadership skills to layoff people, to order furloughs or to cut expenses. Why is the New York Times rolling out significant changes for new media and Gannett does little beyond layoffs, furloughs and expense reductions?"
Posted by Robert Daraio at 10:53 AM