Less than a month after taking his second medical leave in two years, Craig Dubow has resigned as Gannett’s CEO and chairman, the company said in a statement. With this news, Gracia Martore, president and COO, who has been serving as principal executive officer while Dubow was on medical leave, has been chosen to replace him permanently and joined Gannett’s Board of Directors.
In his place on Gannett’s board, Marjorie Magner, has been named non-executive chairman. Magner has served as an independent director of the McLean,VA-based newspaper and broadcast company since 2006.
Dubow, who will turn 57 on October 26, first took medical leave related to issues related to back surgery in June 2009. He has been with Gannett (NYSE: GCI) since 1981, starting out as an ad sales executive at one of the company’s TV stations in Denver, CO. Among his previous roles before taking over as CEO in 2001, Dubow was president of Gannett Broadcasting in 2000. He became chairman about six years ago.
There were no details about his current medical condition in the company’s release, announcing his resignation.
In a statement, Dubow said: “I’ve been with Gannett for 30 amazing years… we have evolved into a digitally led media and marketing solutions company committed to delivering trusted news and information anywhere, anytime. For me, the decision to step down was difficult, but I must now focus on my health and my family. I will miss working with the talented team at Gannett and firmly believe the company’s best days lie ahead. Gannett is in good hands under Gracia’s leadership and well positioned to succeed going forward.”
Martore joined Gannett in 1985 after 12 years in banking and became CFO in 2003, then EVP in 2006. She was named president and COO of Gannett in 2010.
While Martore certainly knows the company inside and out, Dubow’s easy manner served him very well during some very difficult times for the company, especially the last three years which saw the company’s primary newspaper business devastated by the recession.
After a period marked by deep indebtedness and an accelerated shift to digital by consumers and advertisers, Dubow helped steer the company back to profitability. In addition to paying down the company’s large debt, Dubow’s turnaround plan largely focused on significant cost-cutting, which was wrung from the loss of thousands of jobs and pay cuts in the form of mandatory furloughs and other wages decreases at many of its properties, including its flagship, USA Today.
In 2008, as part of a policy of “spreading the pain,” Dubow took a voluntary $200,000 pay cut through 2009. The 17 percent reduction in Dubow’s $1.2 million base salary still left him with a bonus, deferred compensation and stock awards and options, amounting to a total compensation of about $7.5 million. The move came a week after Gannett said it would shed 3,000 jobs across its local papers.
More recently, in March, an SEC filing showed that Dubow’s total pay package added up to $9.4 million — just a little more than double the $4.6 million he took him in 2009. Martore’s pay also more than doubled last year to $8.17 million, according to page 33 of the SEC document.
It’s not clear how much better Gannett executives were expected to do this year, but in June, the company once again said it was resorting to layoffs and forced time-off at its U.S. Community Newspapers division. The company was looking to cut 2 percent of the workforce there, or about 700 jobs.
As Martore takes charge of the company in full, she is expected to continue to Gannett’s evolution as a “360″ digital media and marketing company, and not just as an entity with 80 local newspapers and 19 TV stations. Over the past year, Gannett has introduced a standalone local digital marketing unit in addition to its ownership of rich media ad provider PointRoll and has created a local daily deals network, Deal Chicken.
As of Q2, Gannett made 21 percent of its revenues from its digital efforts. Interactive revenues at the company rose 13 percent last quarter, while the total publishing segment fell 4.9 percent. In other words, although its quickly moving to realizing its perception of itself as a digital company, the legacy side will be with Gannett for a while. Balancing the necessary investment to build its digital business, while managing the costs at keeping the traditional side from falling more precipitously will be up to Martore now.