With Gannett targeting its journalists for yet another round of layoffs, I thought it would be a good time to take a look at the people at the top. A reminder: Gannett is an amalgamation of the old Gannett and GateHouse Media, which was notorious for cost-cutting and which dominates the new Gannett.
There’s a wealth of information — and a lot of wealth generally — in the money-losing newspaper chain’s 2022 proxy statement. It begins with Michael E. Reed, the chairman and chief executive officer, who was paid $7,741,052 in 2021. Of that total, Reed received $900,000 in base salary, $6,074,000 in stock awards and $767,052 in “Non-Equity Incentive Plan Compensation.”
Next up is Douglas E. Horne, the chief financial officer and chief accounting officer, whose payout added up to $1,753,698, of which $600,000 was base salary, $581,318 came in the form of stock awards, $562,380 was for that aforementioned incentive plan and $10,000 was in other income.
Also of interest is Gannett’s nine-member board of directors, eight of whom were paid well in excess of $200,000 to provide advice and counsel on a part-time basis. Now, I have no insight into how much work a Gannett director puts in — although, according to Investopedia, the average corporate board member takes part in just a bit under eight meetings per year. In general, though, serving on a corporate board is an exceedingly light lift. The board chair, as previously noted, is Reed. Here are the other eight directors and their compensation. You can find their company-provided bios (except Hegde, who has left the board) in the proxy report, starting at page 14.
- Kevin M. Sheehan, $285,000 ($160,000 in fees or cash; $125,000 in stock awards)
- Vinayak Hegde, $212,500 ($87,500 in fees or cash; $125,000 in stock awards)
- Theodore P. Janulis, $251,250 ($120,000 in fees or cash; $125,000 in stock awards; $6,250 in other compensation)
- John Jeffry Louis III, $235,000 ($100,000 in fees or cash; $125,000 in stock awards; $10,000 in other compensation)
- Maria M. Miller, $225,000 ($100,000 in fees or cash; $125,000 in stock awards)
- Debra A. Sandler, $245,000 ($120,000 in fees or cash; $125,000 in stock awards)
- Laurence Tarica, $255,000 ($120,000 in fees or cash; $125,000 in stock awards; $10,000 in other compensation)
- Barbara W. Wall, $235,000 ($100,000 in fees or cash; $125,000 in stock awards; $10,000 in other compensation)
For the eight board members other than Reed, that’s an average of $242,969. I can’t offer a judgment as to whether that’s excessive, but I can cite a few data points. First, in 2018, USA Today, Gannett’s flagship newspaper, republished a story from 24/7 Wall Street under the provocative headline “25 companies that pay their board of directors a shocking amount.” The lowest of those 25 was Citigroup, which paid its board members an average of $297,407 — more than Gannett, but not massively more. Second, according to Investopedia, the average corporate board member is paid $42,750, although it was much higher than that at larger firms.
You also have to ask what, exactly, Gannett’s executives and board members are being rewarded for. Last week’s bad news was only the latest for a company that seemingly can’t find a way forward. Its stock price closed at $2.36 on Friday, down from a 52-week high of $7.05 last Sept. 17. Yes, we are in the midst of a local news crisis. But Lee Enterprises, another publicly traded newspaper chain, is doing reasonably well, as are independent local news sources across the country, from larger newspapers like The Boston Globe and the Star Tribune of Minneapolis to hundreds of hyperlocal projects. Gannett needs to demonstrate that it can provide communities with the news and information they need, and they’re failing miserably at that.
Meanwhile, the people doing the actual work make peanuts. According to a study in the fall of 2020 by the NewsGuild-CWA, Gannett journalists at 14 unionized daily newspapers were earning a median salary of $52,000, and those with fewer than 10 years of experience were making $43,000 to $44,000. Those at non-union papers are almost certainly making substantially less. And now they are bracing for yet another round of layoffs, while the people presiding over this fiasco are paid hundreds of thousands or millions of dollars.