Projo’s Parent Co. CEO Compensation Bolstered to as Much as $20 Million

Projo’s Parent Co. CEO Compensation Bolstered to as Much as $20 Million

The Providence Journal’s parent company Gannett has bolstered its CEO compensation package upwards and Michael Reed could receive as much as $20 million dollars according to financial disclosures.

In 2020, the company cut staffing by thousands of employees and slashed costs by $100 million.

And according to Poynter, an additional 500 employees took buyouts.

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In addition, "financially-troubled Gannett will outsource 485 jobs to India in 2021 as part of a 'massive company-wide transformation,'" according to another Poynter report.

Beyond owning the Providence Journal, Gannett locally owns the Newport Daily News, Worcester Telegram, Fall River Herald. Nationally, the newspaper conglomerate owns nearly 300 daily newspapers.

While the staff was being slashed and revenue was falling, the CEO compensation was being bolstered to a record level.

Presently, the Rhode Island General Assembly is considering legislation to remove the 1950s requirement that government, businesses, and in some cases individuals advertise legal notices in the "newspaper" of record. This reform legislation was first proposed in 2014 by then-Governor Lincoln Chafee.

GoLocal, the League of Cities and Towns, as well as some business groups have advocated that the notices be shifted to a no-charge state website. Gannett has opposed the change which would cost the company millions.

According to financial documents, “a committee of independent and disinterested members of its board of directors” approved the award 500,000 to 2 million restricted shares of its stock to Reed "generally subject to the Company’s achievement of specified stock price goals over a three-year performance period" from Jan. 1, 2021, through Dec. 31, 2023.

The price target Gannett's stock must reach for Reed's shares to begin vesting ranges from $4 to $10. 

Gannett stock had spiked at a 52-week high of $6.23 a share and has since fallen and on Monday it closed at $5.71 a share.

Gannett said in a separate public filing this year that Reed's compensation package also includes a $900,000 salary and an annual cash bonus target of $990,000.

Northeastern Journalism Professor Dan Kennedy wrote about the demise of Gannett, “For years, Gannett and the chain that essentially took it over, GateHouse Media, have been decimating their newsrooms in order to squeeze out enough revenues to keep their creditors at bay. (Reed claims a recently completed loan restructuring should help.) As I’ve written before, our local Gannett weekly, serving a city of nearly 60,000 people, hasn’t had a full-time staff reporter since the pre-pandemic days of late 2019. Yet it is also the only print paper I subscribe to because reading it online is such a dismal experience.”

Kennedy told GoLocal, "Mike Reed is not the only newspaper executive who's being richly rewarded for cutting his newsrooms. The same thing is happening at Alden Global Capital, Tribune Publishing and others. Rather than singling out any one person's compensation, I'd point to all of them as examples of why we need locally owned, independent media."

 

Revenues Fall Dramatically

The Providence Journal’s weekday print edition is only subscribed to by less than 3% of the Rhode Island population — an 85% decrease in circulation over the past couple of decades.

According to Gannett’s financials, in the first quarter of 2021, the Publishing segment revenues totaled $858.2 million and in 2021 revenues had fallen to $699.6 million for the same period -- an 18% decrease.

The circulation revenue dropped by more than 10%. "Same store circulation revenues decreased 12.9% in the first quarter of 2021 compared to the same period in the prior year, primarily driven by a reduction in the volume of home delivery subscribers and a decline in single copy sales reflecting the overall secular trends impacting the industry..."

"Same store print advertising revenues decreased 24.9% in the first quarter of 2021 compared to the same period in the prior year..." announced the company.

For Gannett digital advertising revenues also decreased, "same store digital advertising and marketing services revenues decreased 10.4% in the first quarter of 2021 compared to the same period in the prior year reflecting lower local digital media spend and lower page views compared to the prior year which reflected coverage of the COVID-19 pandemic and lower digital classified revenue."

The only positive news for Gannett was an increase in digital subscribers.