Martha Stewart announced she has inked a new pact to stick around for five more years at the helm of her namesake company — but reading the fine print reveals there’s a one-year out clause.
Under the deal terms, she is going to be pulling in annual pay estimated at $2 million. Martha Stewart Living Omnimedia will pay another $2.1 million to her MS Real Estate Management Co. for use of her many and varied properties, according to a filing with the Securities and Exchange Commission.
The new deal — which gives Stewart, the founder and non-executive chairman, the additional title of chief creative officer — does not yet reflect Stewart’s reduced television exposure, rankling some who follow the company.
Stewart’s syndicated daily show on the Hallmark Channel stopped production in April, though it has been showing reruns. Insiders say Stewart seems obsessed with getting back on the air, even though the TV show in the end was a drain on earnings.
“Under the extension letter, if the parties do not reach an agreement regarding mutually acceptable adjustments, the company can choose to have the employment agreement continue in effect through June 30, 2017 or to allow it to lapse at June 30, 2013,” according to the filing.
At the same time, the company formalized the elevation of President and Chief Operating Officer Lisa Gersh to the role of chief executive officer, a post which had been vacant. Wall Street seemed to cheer that move, sending the shares up 2 percent to $3.57.
Martha’s move to reward herself with a cushy new contract extension didn’t sit well with at least one Wall Street analyst who follows the company.
“We view the agreement as a disappointment,” wrote Michael Kupinski at Noble Financial Capital Markets. “We anticipated that there would be some level of reduced compensation for Martha Stewart, given that there will no longer be a live Martha Stewart show.”
Sources said the company is talking with cable, broadcast and digital platforms as a way to get Martha back on TV. As of now, all that is in the works is a new PBS series, called “Martha Stewart’s Cooking School,” which debuts in October.
Meanwhile, the company is still losing money, although its loss narrowed to $1.8 million, from $4.3 million a year earlier, in the quarter ended March 31. The company is projected to turn positive by the fourth quarter.
Time search
Time Inc. is searching for a new worldwide publisher of its flagship title after the highly regarded Kim Kelleher spurned a three-year counteroffer and decided to plunge into the digital world as the new president of Say Media.
Kelleher jumped from Condé Nast in 2010 to be publisher of Time Inc.’s Sports Illustrated. She became worldwide publisher of Time magazine in early 2011 after only five months inside the company.
Now the scramble is on to find a replacement.
Brendan Ripp, the former Time publisher who was bumped aside by then-CEO Jack Griffin to make way for Kelleher, could be a candidate, but is seen as a long shot.
Fortune Publisher Jed Hartmann is also seen as a potential candidate in part because the magazine is up in ad pages this year. He has experience in the newsweekly category from his days running The Week.
Frank Wall, the current publisher of Sports Illustrated and a former ad salesperson at Time, has also been mentioned.
Michelle Ebanks, currently president of Time Inc.-owned Essence Communications division, is also seen as a strong contender. Prior to taking over the current post anchored by a magazine aimed at African-American women, she had navigated the corporate side of Time Inc. as a corporate vice president.
Kelleher, meanwhile is not starting her new gig until September. After grabbing honors as Ad Age’s “publisher of the year” in 2011, she has run into tougher sledding in the current market, where ad pages are down 20 percent at Time from a year ago, according to Media Industry Newsletter.
“I’m excited to work at a company where there is exponential year- over-year growth,” she said.
Say Media grew out of Video Egg, a company started by Matt Sanchez. The San Francisco startup has just over 400 employees and is expected to grow 40 percent in revenue this year, Sanchez said. The company is backed by $30 million in venture funding.
“We’ll do north of $100 million in revenue this year and we’ll be profitable, but we’re still very much in development mode,” Sanchez said.
He said the company has been in an acquisition mode for the past year, but declined to say how much he has earmarked for future buys. In December, it purchased ReadWriteWeb, a tech blog site. It also owns Gardenista, Techdirt and StyleBubble.
Kelleher replaces Troy Young, who will become a consultant.