Board elects two new directors, OK’s dividend

My quick take on twin announcements yesterday by the board of directors, now that I’ve just arrived on the East Coast after a day of cross-country travel; I’ll try to come back with more later today.

Two new directors
In electing Howard Elias and Scott McCune, the board is adding two men with expertise in technology and marketing, areas where Gannett sure could use some help. Elias is an executive vice president at EMC Corp., a giant hardware and software maker. McCune is a vice president at beverage giant Coca-Cola Co. (McCune apparently is taking the seat left vacant last spring after Coke executive and GCI director Charles Fruit died.)

I’m a little surprised that Chairman and CEO Craig Dubow (left) would want to bring two new players on the board when there’s already so much upheaval in the company. But maybe that’s the point: He wanted more advice. Or, perhaps Dubow agreed to expand the board at the request of other directors.

In any case, the board has now grown to 10 members.

(Corporate governance 101: a company’s board of directors looks out for the interests of shareholders by hiring and supervising key executives, starting with the chief executive officer. Directors also review and approve major business deals, and other strategic initiatives.)

Dividend payout
The board approved payment of another 40-cent dividend — punting, apparently, any decision about reducing the payout until a later time. Chief Financial Officer Gracia Martore suggested strongly last week that the dividend might be cut when the board met this week. Whether directors gave that serious consideration is unclear.

Speculation about a dividend cut focused on Gannett’s unusually rich yield: nearly 15%. Investors were clearly happy with today’s news: GCI’s stock closed at $10.76 today, up 82 cents, or 8.3%.

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