It may not be sporting to compare other CEOs to Steve Jobs on a lot of levels but corporate pay and performance is fair game. With that as a measure, the $37 million severance package for Craig Dubow, who resigned as CEO of Gannett (NYSE: GCI) Friday with a debilitating back problem, looks even more out of sync — particularly in the hands of Peter H. Lewis, a pre-Gannett alum of the Des Moines Register,
Gannett alum having a Howard Beale moment in writing.
On his blog, Lewis, now a media consultant after a career that also included the New York Times and Stanford, methodically takes apart the rationale for paying Dubow and other Gannett execs at levels like that when employees are being laid off and routinely furloghed. Jobs created jobs; Dubow shed them along with share value.
Looking at Dubow as the head of a legacy media company versus Jobs at the head of a tech company certainly sounds like an apples-to-oranges comparison, pardon the pun. It would be more apt to juxtapose Jobs’ performance next to what Microsoft’s Steve Ballmer has done or IBM’s Sam Palmisano. But in a larger sense, placing Jobs and Dubow side-by-side clearly shows the opportunities on the tech side of the media divide and the misery on the content creation side.
As Lewis notes, six years ago Gannett had 52,000 employees; today, 32,000. When Dubow took over as CEO, Gannett’s stock price was $72-something a share; last week it hovered around $10, an 85 percent decline. (Lewis points to Jobs, who added 28,000 jobs since returning to the company in 1996 and boosting the stock an astronomical 4000-plus percent between then and now.)
Where Jobs took a $1 salary as CEO, though he was handsomely rewarded through stock, in March, Gannett said in an SEC filing that Dubow’s total pay package added up to $9.4 million — just a little more than double the $4.6 million he took home in 2009.
In 2008, as part of a policy of “spreading the pain,” Dubow took a voluntary $200,000 pay cut through 2009. However, 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.
To his credit, Dubow was able to return Gannett to profitability during one of the worst periods for newspaper companies in particular and media companies in general. He’s also tried to pivot Gannett into being a interactive media and marketing company as a way of supporting the traditional side of the business until digital revenues can completely offset print losses.
But he also cut more than he built, a situation that will plague the legacy of most media company chiefs who had to deal with more challenges than opportunities.
Here’s part of Lewis’ take:
The corporate goal is not to serve the consumer; it’s to maximize profits and pay packages for top executives. Can anyone argue that Gannett newspapers and journalism are better today, and that news consumers are better served?
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.
Correction: Through an editing error, Peter H. Lewis was misidentified as a Gannett alum. He left the Des Moines Register before it was acquired by Gannett. We regret the error. (He elaborates on the thinking behind his post in a comment below.)