BONUSES DWINDLE IN NUMBER, PROXIES SHOW Top executives at six companies do not collect extra dollars, although salaries do rise

NewsInc, April 8, 2002

Bonuses were spiked for six top executives at 10 publicly traded companies in 2001, according to proxy statements recently filed with the Securities and Exchange Commission.

In 2000, nine of the 10 companies paid a bonus of at least $184,000 to the person holding the title of chairman and/or chief executive and/or president. (The exception was Donald Graham of the Washington Post Co., who has received neither a bonus nor a raise in his $399,996 salary in the last three years.) In 2001, only four companies -- Dow Jones & Co., Gannett Co. Inc., Lee Enterprises Inc. and the McClatchy Co. -- paid bonuses to their top executives.

The largest bonus paid last year was $1.8 million, to Gannett's Douglas McCorkindale. Richard Gottlieb, now retired from Lee, received $950,000, while Gary Pruitt of McClatchy received $300,000 and Peter Kann of Dow Jones was awarded $260,400. Total cash compensation for each of the four officers in 2001 exceeded $1.1 million, with McCorkindale the highest paid by far -- $3.4 million (his salary was $1.6 million).

Lee Enterprises saw a changing of its top guard, with Gottlieb's retirement and the rise of Mary Junck from chief operating officer in 1999 to president and chief executive last year and chairman this year. Junck's bonus climbed from $138,100 in 2000 to $300,000 in 2001. (Lee's fiscal year ends Sept. 30.)

In 2000, eight of the 10 executives each received more than $1 million each in combined salary and bonus (Gottlieb and Graham did not). Tribune's John Madigan was paid $3.8 million, $3 million of it a bonus. McCorkindale drew $2.5 million, including a bonus of $1.5 million. The New York Times Co.'s Arthur Sulzberger Jr. also topped $2 million, with a bonus of $1.3 million and salary of $870,000.

In 2001, total cash compensation for the top executives at the 10 companies was $11.8 million, down 28.8 percent from $16.6 million in 2000. The bonus portion of that was down 62 percent, from $8.8 million to $3.3 million. In 1999, $4.9 million was paid in bonuses to top executives, although both Gannett and Scripps are not included in this total as their No. One officers ascended to their current jobs after that time.

Of the 40 executives below the top rung noted in the proxies, 21 also went without bonuses in 2001. These are people with titles such as chief operating officer, chief financial officer, senior vice president, executive vice president and general counsel. The four principal officers below the top man all went without bonuses at Knight Ridder, Scripps, Tribune and the Post Co.

At Belo Corp. the only top officer to get a bonus was James Moroney III, publisher and chief executive of the Dallas Morning News ($11,200). The Times Co. paid bonuses to two such executives, $344,500 to Chief Financial Officer John O'Brien (who resigned at the end of 2001) and $83,333 to Janet Robinson, who is senior vice president for newspaper operations.

Key executives at Dow Jones, Gannett, Lee and McClatchy received bonuses ranging from $47,500 at Lee to $423,750 at Gannett. All told, the executives in this group collectively were paid $4 million in bonuses.

On the salary line, raises between 2000 and 2001 ranged from a low of three percent for Robert Decherd at Belo, from $863,200 to $888,750, to 51 percent for Gannett's McCorkindale, from $1.05 million to $1.6 million.

Next highest was a 27 percent boost for Kenneth Lowe, president and chief executive of Scripps, from $630,000 to $800,000. Also receiving double-digit percentage raises were Lee's Junck, whose pay went up 25 percent, from $460,000 to $575,000; Tribune's Madigan, a 15 percent increase, from $846,311 to $977,130, and Dow Jones' Kann, up 10 percent, from $841,167 to $921,600.

Single-digit raises were conferred on McClatchy's Pruitt, up six percent from $775,000 to $825,000; the Times Co.'s Sulzberger, also six percent, from $870,000 to $920,000, and Tony Ridder at Knight Ridder, a five percent increase, from $893,846 to $935,720.

In addition to executive compensation, the companies also displayed shareholder return -- how the value of $100 in stock invested in 1996 has changed over the last five years. On a percentage basis, shareholder value increased least at Belo, at 15 percent ($100 invested in 1996 has grown to $115 now), and the most at the Times Co., up 141 percent (from $100 to $241).

Scripps and Tribune each grew 99 percent, while Gannett was up 92 percent, Knight Ridder 85 percent, Dow Jones 80 percent, McClatchy 78 percent, the Post Co. 67 percent and Lee 54 percent. The companies all used the S&P 500 as one yardstick; it gained 66 percent in this period.

For many companies, shareholder value was highest in 1999, when the S&P 500 benchmark stood at $208. Tribune ranked first among the 10 companies, at $287, followed by the Times Co. at $268, Gannett at $226 and Dow Jones at $213.

All are now at least 10 percent below those figures, with Tribune down 31 percent, to $199. Since 1999, shareholder value of the S&P 500 stock index has fallen 20 percent, from $208 to $166. The Post Co. slipped two percent in this time, from $171 to $167.