Big Paydays for the Chiefs in the Media

By JOSEPH PLAMBECK

The New York Times
Published: May 2, 2010

The media industry may be going through some rough times, with the landscape changing day to day, but at least one aspect is business as usual: big paydays for the people at the top.

Top executives at the country’s largest media companies continued to reel in multimillion-dollar pay packages in 2009, a year of widespread cost-cutting throughout the industry. In several cases, the packages even increased from the year before.

At the top of the list is Leslie Moonves, chief executive of the CBS Corporation, whose pay package in 2009 totaled almost $43 million, more than twice what he made in 2008, according to an analysis by Equilar, an executive compensation research firm.

Not far behind was Viacom’s chief executive, Philippe P. Dauman, who was paid nearly $34 million, a 22 percent increase over 2008. Sumner M. Redstone, who controls CBS and Viacom, was paid more than $33 million from the two companies combined.

“Anybody who reads the business section knows the margins are being squeezed at media companies, so the fact that there are these huge packages makes no sense,” said James F. Reda, the founder of James F. Reda & Associates, a compensation consulting firm with offices in New York and Atlanta.

At Comcast, the two highest-paid executives, Brian L. Roberts and Stephen B. Burke, were paid $25 million and $31 million. Mr. Roberts’s pay was essentially the same as the year before, while Mr. Burke’s increased about $12 million, much of it because of one-time bonuses related to the company’s purchase of NBC Universal.

For several executives, it was more lucrative to be running a media company in 2009, however wobbly it might be, than a large financial firm, where many boards cut executive pay after the federal financial bailout.

John G. Stumpf, the head of Wells Fargo, was the highest-paid financial executive, earning an $18.8 million package, according to an analysis by Equilar. Lloyd C. Blankfein, the head of Goldman Sachs, made $41 million in 2008 and less than $1 million in 2009, Equilar said, not including a $9 million payout he received this year that was deemed to be for work done the year before but is not included in Equilar’s calculations.

The bankers’ pay will most likely return to past levels if financial reform passes, Mr. Reda said, as Washington’s spotlight will shift elsewhere and the banks will have less incentive to stay in the public’s good graces.

Mr. Reda said, “What is the government going to do after financial reform? Take away their birthday?”

Despite the hard times at many media companies and the uncertainty of maintaining revenue in the digital future, investors did not shy away last year. The stock of CBS jumped 74 percent in 2009, and Viacom’s stock rose 56 percent.

In the case of many of the media executives, including Mr. Dauman at Viacom, most of the compensation is based on the company’s performance. Mr. Dauman’s base salary in 2009, $2.5 million, was unchanged from the year before.

The media industry did rebound in 2009 after a particularly tough 2008, but for many companies that largely meant cutting expenses, including labor costs. Overall revenue declines remained commonplace, but in many cases profits rose.

At Viacom, revenue in 2009 declined 7 percent compared with the year before but the company’s profit rose to $1.6 billion, a 29 percent increase, not far off from Mr. Dauman’s 22 percent pay raise. CBS returned to profitability in 2009 — $227 million — after a huge write-down in 2008.

“Right now, the executive compensation is not what’s driving people to invest or not invest in these stocks,” said Rich Greenfield, a media analyst at BTIG in New York. “Shareholders are more focused on the underlying growth prospects of the companies than executive compensation.”

The pay packages for executives at public companies are made available in corporate filings. Equilar’s calculation includes base salary, discretionary and performance-based cash bonuses, the grant-date value of stock and option awards and other compensation.

Pay increases extended beyond the handful of large media conglomerates to some of the largest newspaper companies as well.

Craig A. Dubow, the head of Gannett, the country’s largest newspaper publisher, was paid $4.4 million in 2009, up 17 percent from the year before.

At The New York Times, Janet L. Robinson, the chief executive, was paid $4.9 million in 2009, 26 percent more than the year before, and Arthur Sulzberger Jr., the chairman, made $4.8 million, a 171 percent increase. Gary B. Pruitt, the chief executive of McClatchy, was paid $2.6 million last year, up 61 percent.

But pay did not increase across the board.

Both Rupert Murdoch and Roger Ailes at the News Corporation had declines in pay, 40 percent for Mr. Murdoch — to about $18 million — and 21 percent for Mr. Ailes, the head of Fox News, who was paid $14.6 million.

Other top executives’ pay fell, too. Robert A. Iger, head of Disney, was paid $21.6 million in 2009, 58 percent less than the year before, and his counterpart at Time Warner, Jeffrey L. Bewkes, earned $19.4 million, a 10 percent drop.

Several analysts said the shifting marketplace and uncertainty surrounding the media business could actually contribute to the large payouts, making companies even more determined to hold on to people they see as gifted executives.

“When you have an industry going through so much tumult, it puts upward pressure on pay because so many people are moving around,” said Don Delves, the president of the Delves Group, a compensation consulting firm in Chicago. “People are looking around a lot, people are moving around and there’s a concern about losing talent.”

He added that big compensation figures were “one of the difficulties in the whole business model.”

A version of this article appeared in print on May 3, 2010, on page B1 of the New York edition.

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