Lee joins newspaper privation train
The Davenport, Iowa-based Lee released its annual proxy filing with the U.S. government on Monday, in advance of its annual meeting. I was expecting to see the usual details buried deep within about the pay raises, bonuses and other monetary rewards that executives tend to earn even when times turn tough.
I was wrong. Here is what I found instead (the following are “named executive officers” or “NEOs,” including Chief Executive Mary Junck:
We approved the following salary adjustments for the NEOs for 2008, which became effective as of October 1, 2007:
- Ms. Junck – Increase of 3.0%, to $850,000;
- Mr. Schmidt – Increase of 3.7%, to $482,000;
- Mr. Veon – Increase of 3.1%, to $361,000;
- Mr. Mowbray – Increase of 3.1% to $335,000; and
- Mr. Kuraitis – Increase of 3.1% to $268,000.
For 2009, we have frozen NEO salaries at the levels noted above, due to difficult economic conditions affecting the Company, the publishing industry and the overall economy.
Not only that, Lee scotched its bonus plan for the executives (which could have been as much as 250 percent of base pay). And contributions to those execs’ long-term incentive plans, usually in the form of stock? Forget it. Not this year.
These decisions are unlikely to make anyone happy, but they do avoid building up a restive employee base. Lee is in trouble if it can’t negotiate new terms with its lenders — debt could overwhelm the company and potentially break it up. It’s not the kind of time when you want to be sending your top executives on junkets.
This, by the way, is something that other publishers are beginning to realize. USA Today publisher Gannett Co Inc is furloughing employees for a week during its fiscal first quarter as a way to save money.
Gannett, which said last year that it would lay off thousands of employees, is subjecting its own executives to the furlough and its chief executive is taking a voluntary pay cut in solidarity with his employees. All good PR, yes, but when Gannett said it might shut down its Tucson, Arizona daily, it managed to lose that good will: once executive Bob Dickey delivered the news, he went out to California to participate in a charity golf tournament.