The Huff about NYT bonuses

Posted by Marc Hodak on April 22, 2009 under Executive compensation, Reporting on pay | Read the First Comment

.                                                                                                                       ^

I’m sure we’ll be seeing a hard-hitting article this weekend by Gretchen Morgensen, but I thought I’d take a quick look at the bonuses currently shaking the liberal establishment:

I speak for a lot of people who are just amazed at the depth and breadth of the hypocrisy here — the liberal New York Times and the liberal Globe… at one point in the negotiations, the company proposed eliminating all sick days for Guild members, like an Alabama sweat shop.

That from a sweatshop worker writer at the Boston Globe, which has been told by their NYT overlords that they the Guild must find $20 million in cuts, presumably from their labor contract, or face the shutdown of their paper.  And the Grey Lady is not just picking on their Boston subsidiary; all NYT employees took a 5 percent salary cut in order to avoid layoffs.

Except for the CEO.  She made $5.58 million in 2008, versus $4.14 million in 2007.

Asked if the bonuses and extra executive compensation were appropriate at a time when employees are being forced to absorb salary cuts and joblessness, Catherine J. Mathis, NYT Senior Vice President for Corporate Communications, told the Huffington Post:

“With regard to shared sacrifice, please remember that for 2008, non-equity incentive compensation (which many think of as bonuses) for these folks was roughly half of what it was the year before and stock awards were down more than 80 percent in value.”

Translation:  “If we can convince you to look only at certain selected parts of the compensation equation, over here (snap, snap), you’ll see they went down versus the year before.”  Of course, that means other parts went up, i.e., grants of stock and options.  The NYT clearly assumes that their shareholders are as innumerate as their readers, and can be lead away from the “total” numbers to just the numbers management wants to discuss.  Sorry, Cathy.  The equity counts, too.

Mathis cautioned that the total compensation numbers in the proxy report…

“…include the value of the compensation — not the amount of cash they received. For example, they were all granted options. But those options are of value only in the stock price increases over the exercise price…For proxy purposes a value is assigned to the options even though the executives received no cash at the time they were granted.”

Uh, yeah.  Actually, the options are valuable even though they’re granted at the money.  That’s how the NYT counts options when they evaluate the pay of CEOs.

Now, if the NYT’s CEO wishes, via her mouthpiece, to insist that at-the-money, or even out-of-the-money options are not really worth anything, I will gladly give her $1 for them, and she can claim to be ahead.  Just mail them to…

What?  She’s not interested?  How about if I offer $2?  She wants how much?  Oh, $1.5 million.  Yeah, that is how much they’re worth.

I’m used to having my intelligence insulted by the NYT, which is why I dropped my subscription a couple years ago, apparently with tens of thousands of others.  The little sympathy as I have for management in this affair is barely topped by my sympathy for those wondering “if the bonuses and extra executive compensation were appropriate at a time when employees are being forced to absorb salary cuts and joblessness.”

If the cuts improve the odds of the paper becoming profitable, that is precisely the kind of thing that should be rewarded with bonuses.  If management doesn’t have an incentive to push for profits, then who can the shareholders count on to make the paper viable?  The unions?