Only a few short weeks after announcing a centralization of layout and copy editing that will cost jobs at its more than 300 newspapers across the nation, GateHouse Media revealed Friday it has awarded more than $1.4 million in bonuses to its top four executives.
In addition, GateHouse, which was trading at five cents per share when markets closed Friday, reworked its severance agreements with CEO Michael Reed, CFO Melinda Janik, General Counsel Polly Grunfeld Sack, and Chief Operating Officer Kirk Davis.
While the GateHouse employees who will be shown the door when the centralized copy desks are implemented will be lucky to get two weeks of severance pay, the company's top three officers will be sitting pretty if they lose their jobs.
Reed will receive two years and three months in pay, which includes not only his base salary, but a monthly average of his bonuses of the past three years. For Davis, it will be two years of the same, while Ms. Sack will receive 21 months worth of salary and bonuses.
And those figures don't even include the fringe benefits, none of which are available to the hundreds of workers who will no longer be receiving GateHouse Media paychecks, thanks to the corporate decisions of these people who made sure, despite their singular lack of success and their continued drive to pull community newspapers away from their communities, that they will be taken care of no matter what happens to their product and the company's bottom line.
And the company's bottom line is sitting at a precarious level, according to the annual report. The company put the following information into its news release issued the same day as the annual report:
- Advertising revenue was down 8.6 percent, despite a 17.8 percent increase in digital advertising.
- Operating income was down from $43.2 million to $33.9 million in 2011
- A lot of jobs were cut, though GateHouse described it as decreasing "compensation expense,: as in the following phrase -- "The expense declines were driven primarily by lower compensation and newsprint expense. Compensation expense was down 10.7 percent on a same reporting period basis as the Company has been able to successfully reduce compensation expense as part of its overall permanent cost savings initiatives." Apparently, using euphemisms is supposed to make us forget that it is real people who are being damaged by the company.
Nowhere in the news release did GateHouse mention the hefty bonuses and golden parachutes company officials were receiving for their "success."
CEO Michael Reed picked up an $800,000 bonus for 2011, according to the company's filing Friday with the Securities and Exchange Commission. Ms. Janik received $125,000, Ms. Sack $140,000, and Davis $350,000, for a total of $1,415,000.
The information is buried toward the end of a long annual report.
And nowhere in the report was it mentioned that the company has lost $575 million over the past three years and is well over a billion dollars in debt.
While GateHouse's top officials continue to make sure their futures are assured, the newspapers that have made it all possible for them, more than 300 "community" newspapers across the United States, are struggling to make do with barebones staff, little support from corporate, and fewer and fewer connections with the local community.
This would make a great news story, if there was anyone left to write about it.