Dear Co-workers:
We are about to begin the second quarter without any real relief in sight from this unprecedented economic downturn and its challenge to our company. Despite all of your truly remarkable efforts to reverse the trend, our revenue numbers continue their downward slide and we have been faced with more difficult decisions.
One of those choices was between more layoffs or another round of furloughs. We chose, for most employees, a furlough program consisting of at least one week of unpaid leave to be taken in April, May or June.
The program will differ from the first quarter’s in a couple of important ways:
* The length of the furlough for employees will vary somewhat by division or location, depending on the division’s operating needs and results.
* Our higher salaried employees will be asked to make an additional sacrifice. This could be a second furlough week or a week’s furlough plus a temporary salary reduction equivalent to one week’s pay for the quarter, depending on the division and/or location.
* Some hourly employees will not be required to take a full week. Each division or location will have different requirements for employees in this category.
Because of the variations, your division head will be the main source of information about your particular program. Memos will be going out shortly to each of you with specific details.
Corporate employees will be participating, as with the first quarter’s program, including all of our company officers and me. Corporate’s memo will come from Gracia.
There will be some exemptions, similar to the first quarter’s program. For instance, some locations that recently have had, or are in the midst of, layoffs or significant salary reductions will be exempt. Represented employees again will be asked to participate in lieu of layoffs.
As with our first program, we are doing furloughs to hopefully mitigate the need for layoffs and to preserve our operations in the face of these extraordinary economic times. We believe this is the best possible course, given the alternatives.
We also need to keep innovating, selling ads and reaching out to audiences to prepare for the return of the economy. When that happens, I believe we will be well prepared to move quickly and take advantage of the new opportunities.
Again, I must thank you all for your hard work, loyalty and dedication. I am truly looking forward to the day I can send an email that congratulates you on getting us through these hard times.
That day isn’t here yet, but I believe it will be. So we must continue to do whatever we can to keep Gannett strong and prepare for the future.
Sincerely,
Craig
Monday, March 23, 2009
Thursday, March 19, 2009
Dubow slashes his own pay to $60,000 per week in wake of corporate free-fall
By MICHAEL LIEDTKE/ AP Business Writer
Gannett Co. slashed its chief executive’s pay package by 60 percent last year, passing along the financial misery that has tormented the largest U.S. newspaper publisher as its stock price and profit shrank amid an industrywide drop in advertising revenue.
CEO Craig Dubow was granted 2008 compensation valued at $3.1 million, based on The Associated Press’ analysis of figures Gannett filed with the Securities and Exchange Commission Wednesday. That’s down from 2007 compensation of $7.9 million, which included estimates provided by the company of stock options that overstate what they are currently worth.
As big as the decline in Dubow’s 2008 pay package was, it still fell short of the 79 percent plunge in Gannett’s market value that erased $8 billion in shareholder wealth last year.
The AP calculations include executives’ salary, bonus, incentives, perquisites, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. It is based on an amended SEC filing that includes changes Gannett made to explain the value of Dubow’s stock awards more clearly than the McLean, Va.-based company’s initial disclosures on Tuesday.
Gannett, which publishes USA Today and more than 80 smaller daily newspapers, has been scrambling to cope as the recession has exacerbated revenue declines from a years-long shift of advertising from the print medium to less expensive alternatives on the Internet, particularly with classified ads. Gannett’s annual ad revenue from publishing fell 21 percent since 2006 to $4.15 billion last year.
Although it’s considered to be in better financial shape than many newspaper publishers, Gannett still lost $6.6 billion last year. Most of the loss stemmed from non-cash charges to account for the crumbling value of Gannett’s newspapers and the costs of eliminating more than 4,000 jobs last year, or about 10 percent of the company’s work force.
Girding for even tougher times ahead, Gannett last month decided to cut its stock dividend for the first time in its history. The 90 percent reduction in the quarterly payout will deprive shareholders of about $325 million during the next year.
Beginning this year, the company also has stopped paying for Dubow’s home security to save money.
Dubow’s 2008 pay consisted mostly of a $1.17 million base salary and a $875,000 bonus.
The salary reflects Dubow’s decision to lower his own annual base pay to $1 million in November from $1.2 million, a 17 percent reduction that will remain in effect through 2009. He also is relinquishing another $19,200 this year under a cost-cutting program requiring most of Gannett’s U.S. employees to take an unpaid week off before April.
Gannett’s board cut Dubow’s 2008 bonus in half, to $875,000, after concluding that an even more drastic reduction wouldn’t be appropriate because he and his top lieutenants had already been punished by the company’s falling stock price.
All of the stock options that Gannett has awarded its top executives during the past eight years wouldn’t generate a profit now because their cost to exercise the options is higher than the current value of the stock. The phenomenon, which is affecting more executives and even some rank-and-file workers throughout the country, is known as being “under water.”
Dubow’s compensation included another 235,000 stock options that were valued at $817,800 when they were awarded in February 2008. The options have an exercise price of $31.75, meaning Gannett’s shares will have to rise by about 13-fold for Dubow to have a chance to profit from them. Gannett shares rose 2 cents on Wednesday to $2.46.
In December, Gannett gave Dubow 100,000 shares of restricted stock valued at $132,000.
The company estimated that restricted stock that Dubow received in previous years have plummeted by about $3.5 million, or 87 percent. Dubow hasn’t been able to sell his restricted stock because of Gannett’s rules requiring its executives to own significant stakes in the company.
Dubow’s 2008 compensation package was rounded out by $144,002 to pay for his life insurance, company car, personal use of the corporate jet, lunches and home security.
Gannett Co. slashed its chief executive’s pay package by 60 percent last year, passing along the financial misery that has tormented the largest U.S. newspaper publisher as its stock price and profit shrank amid an industrywide drop in advertising revenue.
CEO Craig Dubow was granted 2008 compensation valued at $3.1 million, based on The Associated Press’ analysis of figures Gannett filed with the Securities and Exchange Commission Wednesday. That’s down from 2007 compensation of $7.9 million, which included estimates provided by the company of stock options that overstate what they are currently worth.
As big as the decline in Dubow’s 2008 pay package was, it still fell short of the 79 percent plunge in Gannett’s market value that erased $8 billion in shareholder wealth last year.
The AP calculations include executives’ salary, bonus, incentives, perquisites, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. It is based on an amended SEC filing that includes changes Gannett made to explain the value of Dubow’s stock awards more clearly than the McLean, Va.-based company’s initial disclosures on Tuesday.
Gannett, which publishes USA Today and more than 80 smaller daily newspapers, has been scrambling to cope as the recession has exacerbated revenue declines from a years-long shift of advertising from the print medium to less expensive alternatives on the Internet, particularly with classified ads. Gannett’s annual ad revenue from publishing fell 21 percent since 2006 to $4.15 billion last year.
Although it’s considered to be in better financial shape than many newspaper publishers, Gannett still lost $6.6 billion last year. Most of the loss stemmed from non-cash charges to account for the crumbling value of Gannett’s newspapers and the costs of eliminating more than 4,000 jobs last year, or about 10 percent of the company’s work force.
Girding for even tougher times ahead, Gannett last month decided to cut its stock dividend for the first time in its history. The 90 percent reduction in the quarterly payout will deprive shareholders of about $325 million during the next year.
Beginning this year, the company also has stopped paying for Dubow’s home security to save money.
Dubow’s 2008 pay consisted mostly of a $1.17 million base salary and a $875,000 bonus.
The salary reflects Dubow’s decision to lower his own annual base pay to $1 million in November from $1.2 million, a 17 percent reduction that will remain in effect through 2009. He also is relinquishing another $19,200 this year under a cost-cutting program requiring most of Gannett’s U.S. employees to take an unpaid week off before April.
Gannett’s board cut Dubow’s 2008 bonus in half, to $875,000, after concluding that an even more drastic reduction wouldn’t be appropriate because he and his top lieutenants had already been punished by the company’s falling stock price.
All of the stock options that Gannett has awarded its top executives during the past eight years wouldn’t generate a profit now because their cost to exercise the options is higher than the current value of the stock. The phenomenon, which is affecting more executives and even some rank-and-file workers throughout the country, is known as being “under water.”
Dubow’s compensation included another 235,000 stock options that were valued at $817,800 when they were awarded in February 2008. The options have an exercise price of $31.75, meaning Gannett’s shares will have to rise by about 13-fold for Dubow to have a chance to profit from them. Gannett shares rose 2 cents on Wednesday to $2.46.
In December, Gannett gave Dubow 100,000 shares of restricted stock valued at $132,000.
The company estimated that restricted stock that Dubow received in previous years have plummeted by about $3.5 million, or 87 percent. Dubow hasn’t been able to sell his restricted stock because of Gannett’s rules requiring its executives to own significant stakes in the company.
Dubow’s 2008 compensation package was rounded out by $144,002 to pay for his life insurance, company car, personal use of the corporate jet, lunches and home security.
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