Archive for the ‘Executive Suite’ Category

First confirmed details of Corporate’s shake-up

November 20, 2008

The newspaper division executive in charge of circulation is retiring, according to a memo that offers at least one clue about that secret management shuffle in McLean, Va. From the memo Vice President Rob Althaus just sent to publishers and other top bosses:

“It is with sadness but with great zeal and enthusiasm that I tell you that effective 1/2/2009 I will be retiring from Gannett. It has been my pleasure to work with such a terrific group of Gannett professionals for the past 18 years and for that I thank all of you. I have enjoyed every day of being a circulator for the past 37 years and I will miss the hard work, camaraderie and the friendships. However, I sincerely look forward to the next chapter. Best wishes to all and thanks again for all that you have done for me.”

[Photo: detail of the Gannett Tower at McLean, Kohn Pedersen Fox]

Palace shuffle: Who’s in, who’s out at Corporate

November 19, 2008

[Corporate campus: houses Gannett, USA Today in McLean, Va.]

People keep hinting there’s been a top-level executive reshuffling at Corporate amid the big newspaper layoff now underway. But I haven’t heard much that’s firm — or very far-reaching. Maybe a reorganization is still in the works, beyond those reports that company spokeswoman Tara Connell may be working a new editorial project.

Otherwise, the only tip I’ve gotten says three newspaper division officers — including one who’s well-known — all received buyouts. I’m withholding the names given to me, pending further confirmation. (But note this comment on Monday, at 11:06 a.m. ET.) These buyouts would be special situations, since Chief Financial Officer Gracia Martore‘s buyout memo last month said officers weren’t eligible.

Who’s in, and who’s out at Corporate? Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

[Photo: Kohn Pedersen Fox]

For editors, new software tool — and Connell, too?

November 18, 2008

Gannett is on the verge of launching an online software application to make it easier for its newspapers to share and reuse each others’ stories and other content, readers tell me.

The service, possibly called Gannett One or Content One, could largely or completely replace what remains of Gannett News Service. What’s more, it appears to be a step in the direction of weaning the company off increasingly expensive Associated Press stories, video and other content.

CEO Craig Dubow and Gannett’s chief spokeswoman Tara Connell described the new initiative in a series of employee meetings yesterday during a Corporate tour of papers at Greenville, S.C., and at Brevard and Fort Myers in Florida, readers say. “There was a TON of open groaning and shifting about this from the news side of yesterday’s meeting,” one tipster told me about the News-Press meeting in Fort Myers.

In a curious twist, I’m told, Connell — who has been vice president over corporate communications since 2003 — would take on an editorial role, working with research and development chief Michael Maness to run the service. (I asked Connell for comment last night, but have not heard back from her.)

Gannett One would let an editor quickly determine which company newspapers have just published a spring gardening story on, say, planting tulips. The story could then be downloaded, re-written to include more local information, then published online and in print, readers say.

Dubow and newspaper division President Bob Dickey talked about the same sharing of information when they visited employees last month in Louisville, Ky. “Someone asked if this meant eliminating AP, and they said that it would probably happen later down the road, but not immediately,” another reader says. “The impression I got was within the next 3-5 years.”

Connell’s credibility problem
An employee since 1972(!!!), Connell has spent the past five-plus years in the public-relations spin cycle, defending Dubow and other top executives even as their compensation skyrocketed while revenue and the company’s stock price tanked.

To be sure, Connell has worked editorial before: Prior to being named the company’s top publicist, she was a managing editor at USA Today before being replaced during a change in top editors. While her defense of Corporate has hardly been full-throated, I imagine her credibility among some editors is now pretty much shot. (Besides, if Connell moves back to edtorial, who’s going to make sure you-know-who doesn’t keep losing her BlackBerry?)

Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

Ripple6, Saridakis — and those curious payments

November 14, 2008

Companies trying to bury awkward news they don’t want widely circulated often stick it at the bottom of a press release or deep inside a regulatory filing. So, for example, we found the following paragraph at the very end of Gannett’s announcement yesterday that it had bought social-network software maker Ripple6:

“As part of the transaction, the 10 percent share of Ripple6 owned by Chris Saridakis, senior vice president and chief digital officer of Gannett, was bought out completely by Gannett. He did not participate in the sale negotiations.”

Smart Gannett Blog readers noticed that curious passage, and wondered, understandably, why GCI is doing big business with one of its own officers. Worse still, the announcement says: “Terms were not disclosed.” That’s a fancy-schmancy way of saying Gannett would not reveal the price paid for Ripple6 — or the method of payment. (Gannett stock? Unlikely. Cash? Probably.)

One unhappy reader summed it up last night in a comment: “A horrible economy. A stock that dives from $90 to $8.50. In the middle of it all, an acquisition that benefits — more than GCI stakeholders — one of its new division heads.”

Saridakis beats odds — twice!
Gannett will use Ripple6 to create and power online communities, including its most successful ones to date: the recently rebranded MomsLikeMe.com sites.

Now, there are thousands of software companies in the world to buy. What are the odds GCI would choose one co-owned by one of its highest-ranking officers? Better yet, what are the odds Gannett would make that kind of deal twice? Quite good, it turns out.

Just eight months ago, GCI paid $4.6 million to Saridakis (left), for the remaining shares he owned in PointRoll — the advertising services company Gannett bought in 2005. Saridakis, 40, was its CEO at the time, and so a significant stockholder.

That $4.6 million payment raised eyebrows, when it was disclosed last spring in a shareholders proxy report filing with the U.S. Securities and Exchange Commission. Moreover, the payment was disclosed way back on page 50, where many investors might not have seen it. By then, of course, Saridakis had pole-vaulted onto the powerful Gannett Management Committee, chaired by CEO Craig Dubow. Saridakis was the young technologist, suddenly in line to succeed Dubow.

Document reveals $2.2 million contract
The same proxy report also says: “In March 2008, we entered into contracts with Ripple6, Inc., an entity in which Mr. Saridakis holds a 10% interest, pursuant to which Ripple6 will provide approximately $2.2 million of computer programming services related to strategic plan initiatives. As our senior management was aware of his indirect interest, Mr. Saridakis did not participate in the negotiation of these contracts. Due to the immaterial amounts involved, the contracts were approved by senior management.”

That $2.2 million is the gross amount, of course; I’d like to know how much of it was profit split among Saridakis and his partners — and how big a cut Saridakis got.

Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

Blind item: Why this exec doesn’t change diapers

November 4, 2008

We know former CEO Doug McCorkindale doesn’t pay a dime for health insurance — one of the many perks he and his family enjoy under the retired executive’s gold-plated retirement contract.

Now, as CEO Craig Dubow feels your pain, which other ex-executive gets a nanny, housekeeper and other domestic help paid by GCI under his equally princely retirement package?

(What’s a blind item?)

[Image: The Nanny Diaries, the very entertaining 2002 novel]

Dubow, officers taking pay cut, wage freezes

November 3, 2008

Moving to bolster employee morale in the face of a looming mass layoff, CEO Craig Dubow has taken a voluntary 17% pay cut equal to $200,000, effective Nov. 1, and extending through next year, Corporate has just announced. Also, all company and division officers will have their salaries frozen next year, according to a memo posted here. Dubow’s base pay is $1.2 million, so the cut leaves him with a $1 million paycheck, excluding any bonus and other benefits.

I’m especially struck by the fact the board of directors is now publicly expressing confidence in Dubow (left), indicating that his job remains secure. Meanwhile, early employee reaction is mixed: “Night has become day, the sun rose in the west, and the seas receded,” one reader says. “But we should not shed many tears for Craig Dubow, who still is hauling in an embarrassing sum. I have to admit it does show management is willing to share some of the pain the rank and file is feeling.”

Questions: Did the board take a formal confidence vote? If so, who made that motion? Why is Dubow the only officer taking a pay cut? Plus, what happens with bonuses?

Dubow cites ‘deep sacrifices’
The memo follows:

Gannett Chairman, President and Chief Executive Officer Craig Dubow today announced that he will take a voluntary $200,000 (17%) salary reduction beginning November 1 and continuing through 2009. Also, all company and divisional officers will have their salaries frozen for 2009.

“All Gannett employees are making deep sacrifices for their company,” said Dubow. “I have great empathy for those employees and their families who have lost their jobs. I also recognize that our employees are working harder and harder to produce results in a challenging business environment. But I firmly believe the steps we are taking now are necessary and will serve as the foundation for our future success. I want to thank all our employees for their patience and loyalty during these difficult times.”

Gannett Presiding Director Karen Hastie Williams (left) said: “We commend Craig for his leadership in taking this step. The Board is well aware that the company and the media industry generally are experiencing difficult times. The Board believes that the company’s strategic plan has set the right course given the secular and cyclical challenges the company faces. The Board continues to support Craig and his management team and their efforts to lead Gannett into the future.”

Dubow’s big payday: $7.5 million
His total compensation is about $7.5 million, counting base pay, bonus, stock awards, stock options and deferred compensation interest earnings, company spokeswoman Tara Connell told Reuters news service. Dubow volunteered the pay cut to the board, which accepted it, Connell said.

I’ve e-mailed and telephoned Connell for comment.

Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

Board elects two new directors, OK’s dividend

October 30, 2008

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%.

Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

GCI said offering buyouts to Corporate staff

October 24, 2008

Warning that “challenges are deepening,” Gannett is offering an unspecified number of buyouts to Corporate staff at McLean, Va., a reader says, citing a memo today from Chief Financial Officer Gracia Martore (left).

The memo warns that layoffs could follow if an insufficient number of volunteers steps forward. Eligible staff are those in “certain corporate departments who are age 55 or older and have a minimum of 10 years of credited service,” the memo say. Corporate officers and certain other managers are not eligible. (Full text of memo, posted by reader.)

The Martore memo says: “All of you here have worked very hard over the past few years to stave off the business and economic conditions that are impacting our industry. Even so, the challenges are deepening and we must face them head on, just as our coworkers in the field continue to do.”

Now, here’s something I found both revealing and puzzling. The memo says “Corporate already has seen a 10% reduction in staff through attrition or other initiatives.” I’m surprised those cuts didn’t get leaked to this blog earlier; that’s the sort of news that might temper some of the criticism Corporate gets here.

Please post your replies in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

What Dubow, three others would get in severance

October 22, 2008

$79 million

That’s the scheduled payout for CEO Craig Dubow (left) and three other top executives, if they lose their jobs within two years of what’s called a “change in control,” public documents show; Dubow would get nearly half the total: $36.3 million. (Details on the other three execs, plus more, in Golden parachutes? The answer is: $79 million

With Gannett’s market value falling dangerously low amid the stock’s latest plunge, a reader suggested I remind you of these payouts. The lower its market value, the more vulnerable GCI becomes to the sort of takeover that would spur those seven-figure golden parachutes.

Was Big Al the company’s second presidential CEO?

October 20, 2008

[CEOs as candidates? Neuharth and Gannett]

Calling ubiquitous presidential historian Doris Kearns Goodwin!

As we tally presidential endorsements by Gannett papers, a reader says former CEO Al Neuharth‘s scheme to jack up his autobiography’s sales was part of a bigger stealth plan, testing support for a late-1980s White House bid. “The idea was to achieve and maintain best-seller status in conjunction with his ‘Buscapade‘ trip around the country,” the reader says. “All of this was rumored, believe it or not, to be a bid to get himself considered as a presidential candidate!!”

If true, Neuharth would have been at least the second Gannett CEO with eyes on 1600 Pennsylvania Avenue. Co-founder Frank Gannett, a Republican, “campaigned as an avowed presidential candidate in 1939 and 1940, and his name went before the convention at which Wendell Willkie was nominated,” the Harvard Square Library says. (Willkie lost to Franklin D. Roosevelt.)

Earlier: Challenging Obama fanboy Neuharth

Please post your thoughts in the comments section, below. To e-mail confidentially, write gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.