Wednesday 12 October 2011

Newsquest parent company chief gets $37m retirement package after six years of slashing jobs

Craig Dubow, the chief executive officer of Gannett, Newsquest's US parent company, who is leaving the company on health grounds is eligible to collect a retirement and disability pay package of $37.1 million which has sparked criticism from one of the company's former journalists.

Peter Lewis, who has worked for the The Des Moines Register, the New York Times and FORTUNE magazine, in a post on his blog highlights the number of jobs that have been cut at Gannett since Dubow was appointed six years ago.

Lewis writes: "When Dubow took over Gannett employed some 52,000 people in its publishing, broadcast, digital and mobile divisions. When he resigned last week, it employed 32,000 people. Among the 20,000 jobs that were cut were thousands of talented journalists. Mr. Dubow also required many employees to take unpaid leaves of absence, and instituted pay freezes. He referred to this as 'increasing workplace efficiencies.'

"When Dubow took over as CEO, Gannett’s stock price was $72-something a share. At his departure last week it was $10-something, down 85 percent in his tenure.

"Last year, while laying off more journalists, Gannett increased Mr. Dubow’s 2010 pay package to $7.9 million. Including the estimated future value of stock awards and options, his 2010 pay package could increase to $9.4 million. Gannett said the raise was meant to reward Mr. Dubow for boosting the publisher’s earnings — remember, the emphasis is always on the net — for the fourth consecutive year.

"Mr. Dubow managed to keep earnings high, according to analysts, by cutting costs (i.e. people) more aggressively than any other company in the media industry. Gannett refers to this as 'workplace restructuring.'

"Mr. Dubow is now eligible to collect a retirement and disability pay package of $37.1 million, according to Gannett."

Lewis also notes that Bob Dickey, the head of Gannett’s U.S. newspapers division, also got a hefty pay raise in 2010 to $3.4 million, up from $1.9 million the year before. He adds that in his resignation statement, Dubow insisted that his top priority as CEO was to serve the consumer.

Lewis concludes: "How did Mr. Dubow and Gannett serve the consumer? They laid off journalists. They cut the pay of those who remained, while demanding that they work longer hours. They closed news bureaus. They slashed newsroom budgets. As revenue fell, and stock prices tanked, and product quality deteriorated, they rewarded themselves huge pay raises and bonuses.

"This is the sort of stuff that causes people to occupy Wall Street and main streets in cities across the country."

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