In a move aimed at boosting morale within the New York Times newsroom, Chairman Arthur “Pinch” Sulzberger Jr. and his cousin, Vice Chairman Michael Golden, will forgo about $2 million in stock and pump it into a bonus pool for employees.
The move comes as Sulzberger’s leadership has come under increasing attack from employees and Wall Street, as the company fights to keep readers and advertisers from fleeing to the Internet.
The Times disclosed in a filing with the Securities and Exchange Commission yesterday that Sulzberger and Golden “have requested that the board of directors significantly reduce their compensation for 2006 and 2007 by not granting them stock-based compensation. Management will use the savings to create a bonus pool to reward exceptional performances by employees who do not participate in the company’s annual bonus plan.”
One insider said the news was applauded in the newsroom, but added, “They should have done it long ago.”
Now, this person said, attention is focused on Janet Robinson, the company president who also was blasted for her swollen bonus payment last year at a time when the company’s stock was slumping. In 2005, Robinson’s stock awards grew fivefold from 2004 to almost $2 million.
Earlier this year, the proxy watchdog service Glass Lewis blasted the Times for giving executives at the flailing company exorbitant stock grants. The firm gave it a “D” grade for executive pay and chastised the compensation committee for “not properly fulfilling its duty to shareholders.”
Last year, Sulzberger, whose family controls the company, raked in a salary of $1.1 million and a cash bonus of $560,521, plus stock awards valued at close to $818,000.
In a letter to employees that accompanied the SEC filing, Sulzberger wrote: “As we make our way through the challenging period of transition that we and our industry are in, there are a few things of which we at The New York Times Co. can be sure. One is that we’re in this together.”
He said the first set of bonuses will be paid out in February, and the rest the following February.
The company’s share price has plunged more than 40 percent in the past two years, and Sulzberger has faced the unenviable task of trying to slash costs while also seeking out new digital platforms for the Times’ content.
Last year, the company slashed 500 jobs and now plans to reduce the physical size of its namesake newspaper and combine printing operations – which will result in an additional 250 lost jobs.
In April, Morgan Stanley Asset Management, a major shareholder, led a dissident group of shareholders that withheld votes for board nominees. Morgan Stanley also protested the company’s dual-class stock structure, which gives the Sulzberger family control.
Morgan Stanley blasted the structure, saying it “fosters a lack of accountability.”
—
Charitable Times
Embattled Publisher Arthur Sulzberger Jr. and his cousin, Michael Golden, are putting $2 million of their pay into a special bonus fund for New York Times employees.
PINCH-O-METER: OK — KO’d
NEW YORK TIMES – Close: $23.05 (-10 cents) – Bloomberg