Questions about Decherd’s 140% raise
Not everyone in the newspaper business is suffering equally though the most difficult time in the industry’s history. Robert W. Decherd, for one, is doing pretty well.
The chief executive of A.H. Belo Corp. recently got a 140% pay raise that will boost his base compensation to $600,000 a year from $250,000 in 2007, according to the Dallas Morning News, his flagship newspaper.
Given that Bob’s company recently froze salaries and pared 13% of its work force, I repeatedly tried to reach him this week to ask about the justification for, and timing of, his big pay bump.
But a woman answering the phone in his office said he was too busy to come to the phone and his corporate spokeswoman said he would have no comment on any questions I might have.
Not wanting a list of good questions to go to waste, I have decided to feature Bob in the first of an occasional series of Empty-Chair Interviews with key industry leaders. Here is the inaugural installment:
Q. In a memo to your colleagues at the company in October, you said: “As of Nov. 1, salaries will be frozen at current levels in most instances until the company returns to profitability.” In light of that policy, how did you get a 140% raise?
A.
Q. Since A.H. Belo began trading as an independent company in January, the value of its shares have fallen from $16.35 on Jan. 2 to close yesterday at $1.71, representing a decline of 89.5% that has wiped out some $222 million in shareholder value. The principal job of a CEO is to increase shareholder value. If the performance of any other employee in your company fell short to this degree, would he or she be getting a 140% raise?
A.
Q. In the first nine months of the year, the operating profits of your company plunged by 99.8% to $156,000, according to your most recent financial statement. In the interests of improving shareholder value, a major responsibility of the CEO is seeing to the profitability of the company. If any other employee in your company fell short in his duties to this degree, would he or she be getting a 140% raise?
A.
Q. In a memo to shareholders in October, you stated that you intended to eliminate 502 jobs in the company to reduce the work force by 13% to save $30 million a year in payroll. This suggests the average pay for a Belo employee is about $60,000. If you had not taken a $350,000 raise, nearly six people still would have their jobs today. Instead, those six people are trying to find work in the most depressed economy since the 1930s. Does it bother you that those six people, not to mention all the others, lost their jobs so you could get a 140% raise?
A.
Q. At $600,000 per year, you will be getting paid 10 times more than the average Belo employee. Can you explain what you do that makes you 10 times more valuable than those workers?
A.
Q. When you appeared last week at the UBS conference for media investors in New York, you did not seem to know the answer when one financial analyst asked you the circulation of your newspapers (podcast). After conferring with one of your colleagues, you said the Dallas Morning News has circulation of “about 325,000,” whereas it is 338.9k daily and 483.8 on Sunday. You said circulation at the Riverside Press Enterprise is “under 200,000,” whereas it is 149.6k daily and 160k on Sunday. You never gave an answer for the Providence Journal, which happens to be 131.6k daily and 186.6k Sunday. Don’t you think someone being paid $600,000 a year to run a handful of newspapers ought to know their respective circulations?
A.
Q. At the UBS conference, you stressed the quality of the company’s newspapers several times but also mentioned in passing that the compnay will “have to get past content generation.” What does that mean?
A.
Q. Do you see any tension between taking a large raise and the fair-dealing section of your company’s code of ethics which states, in part: “Directors, officers and employees should endeavor to deal fairly with A. H. Belo’s customers, suppliers, competitors and employees”?
A.
The chief executive of A.H. Belo Corp. recently got a 140% pay raise that will boost his base compensation to $600,000 a year from $250,000 in 2007, according to the Dallas Morning News, his flagship newspaper.
Given that Bob’s company recently froze salaries and pared 13% of its work force, I repeatedly tried to reach him this week to ask about the justification for, and timing of, his big pay bump.
But a woman answering the phone in his office said he was too busy to come to the phone and his corporate spokeswoman said he would have no comment on any questions I might have.
Not wanting a list of good questions to go to waste, I have decided to feature Bob in the first of an occasional series of Empty-Chair Interviews with key industry leaders. Here is the inaugural installment:Q. In a memo to your colleagues at the company in October, you said: “As of Nov. 1, salaries will be frozen at current levels in most instances until the company returns to profitability.” In light of that policy, how did you get a 140% raise?
A.
Q. Since A.H. Belo began trading as an independent company in January, the value of its shares have fallen from $16.35 on Jan. 2 to close yesterday at $1.71, representing a decline of 89.5% that has wiped out some $222 million in shareholder value. The principal job of a CEO is to increase shareholder value. If the performance of any other employee in your company fell short to this degree, would he or she be getting a 140% raise?
A.
Q. In the first nine months of the year, the operating profits of your company plunged by 99.8% to $156,000, according to your most recent financial statement. In the interests of improving shareholder value, a major responsibility of the CEO is seeing to the profitability of the company. If any other employee in your company fell short in his duties to this degree, would he or she be getting a 140% raise?
A.
Q. In a memo to shareholders in October, you stated that you intended to eliminate 502 jobs in the company to reduce the work force by 13% to save $30 million a year in payroll. This suggests the average pay for a Belo employee is about $60,000. If you had not taken a $350,000 raise, nearly six people still would have their jobs today. Instead, those six people are trying to find work in the most depressed economy since the 1930s. Does it bother you that those six people, not to mention all the others, lost their jobs so you could get a 140% raise?
A.
Q. At $600,000 per year, you will be getting paid 10 times more than the average Belo employee. Can you explain what you do that makes you 10 times more valuable than those workers?
A.
Q. When you appeared last week at the UBS conference for media investors in New York, you did not seem to know the answer when one financial analyst asked you the circulation of your newspapers (podcast). After conferring with one of your colleagues, you said the Dallas Morning News has circulation of “about 325,000,” whereas it is 338.9k daily and 483.8 on Sunday. You said circulation at the Riverside Press Enterprise is “under 200,000,” whereas it is 149.6k daily and 160k on Sunday. You never gave an answer for the Providence Journal, which happens to be 131.6k daily and 186.6k Sunday. Don’t you think someone being paid $600,000 a year to run a handful of newspapers ought to know their respective circulations?
A.
Q. At the UBS conference, you stressed the quality of the company’s newspapers several times but also mentioned in passing that the compnay will “have to get past content generation.” What does that mean?
A.
Q. Do you see any tension between taking a large raise and the fair-dealing section of your company’s code of ethics which states, in part: “Directors, officers and employees should endeavor to deal fairly with A. H. Belo’s customers, suppliers, competitors and employees”?
A.
posted by Newsosaur at 7:54 AM
18 Comments:
Oh, do I look forward to the sequels.
The Empty Chair interview -- what a great idea! Like Trotsky, I, too, look forward to future interviews. For example, with George Bush, Dick Cheney, Donald Rumsfield...what an all-star list of empty chairs! Go newsosaurus!
-- jeang287
Dear Newsosaur:
I think you are misrepresenting the man, and your article has taken him and his answers completely out of context.
After all, at his pay grade, he surely has a nicer chair than that!
Perhaps it is a pre-raise chair?
;)
I often have thought about doing something similar to this, but it's too tempting to fill in "answers" for the people being questioned.
I know people who worked at The Dallas Morning News for 10+ years and never met Decherd, who stays locked up across the street in the Belo high-rise. It's not surprising that he wouldn't take your phone call.
He has been known to red-line front-page headlines he doesn't like, so perhaps he can earn some of his raise by logging time on the copy desk. Maybe it could use the help after the layoffs.
i worked there for 21-plus years and saw him, oh, maybe three times.
You nailed it. Bravo.
Excellent questions, loved the 'answers' as well. A perfect illustration of the attitude and cluelessness of top management at many of the big companies.
I wonder how the numbers you use stack up against the information on the Forbes website:
http://people.forbes.com/profile/robert-w-decherd/11168
What you can find there reflects more what I would consider the real numbers for CEO compensation in the US 2008
It's a simple equasion: eliminate content generators (reporters), and everything becomes profit. Most of the DMN Pulitzer-Prize winners "donated" their salaries to Decherd in the last five years. If they continue to alienate the readers, think of the money they'll save on pulp.
Please keep this up. I can't wait to see more. Also, I am curious to hear what the rest of the employees at such newspapers have to say, from C-levels to the worker bees. Many a times, we are told that upper mgmt is getting a pay cut, too. But how do we really know they are not just moving their lips?
I seem to remember that one of the points of pride when I worked at the DMN a number of years ago was that the company went through the entire Great Depression without a single lost job. Times have certainly changed.
The board and its compensation consultants deserve a public thrashing for this.
This company was created less than a year ago, separated from the Belo broadcast business and spun off as the "stub" containing the Belo print business.
Executive compensation should have been set at industry-comparable levels at that time, and if they were not, more's the pity. The board and management made a big mistake and should pay for it.
If compensation was pegged appropriately at the time, and Decherd and his cohorts now believe they are worth more, they deserve to put that to a shareholder vote -- not stick it to the shareholders by taking action like this.
the company will “have to get past content generation.” What does that mean?
Wow! What a provocative comment. It deserves much follow-up. The implications are profound...
Are newspaper CEOs simply dressing a corpse for interment, while picking its pocket?
"Are newspaper CEOs simply dressing a corpse for interment, while picking its pocket?"
Since I work for the newspaper which Decherd forgot to even mention in his bungled circulation numbers answer, I'll take this one. Short answer: yes.
Long answer: not only is the corpse being dressed and its pockets picked, the few who actually still subscribe and/or advertise in newspapers are being exsanguinated. There has been a notable shift from subscription acquisition and retention to price increases and reduced service levels to maximize profit. Clearly the decision has been made that a newspaper is a luxury item. If you are desperate enough to subscribe or advertise in one, you will be gouged at every turn.
The corpse is indeed being dressed for interment.
Since there ARE no answers to these questions that would mean anything, your "editorial" would qualify as simple fact.
Please keep up the great blog... thanks.
It still shocks me that this greedy generation of newspaper publishers is destroying a commercial and democratic institution (the American newspaper industry) that was built up over hundreds of years by hard-working, serious and dedicated people who loved their product instead of loathing it.
AH Belo Pay Cuts 4/2/2009
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