Wednesday, January 28, 2009

Pruitt's days numbered? Mutter says McClatchy's dividend cancellation might cause the board to review Pruitt's performance


Alan Mutter points out McClatchy's plan to stop paying dividends after the upcoming April payment might cause the board of directors to take a look at Gary Pruitt's performance as CEO. A really, really close look.
The upcoming dividend cancellation certainly qualifies as an event that will come at the expense of stockholders. And the largest group of affected shareholders is the members of the founding McClatchy family, who control 41% of MNI’s stock.

The elimination of their dividends may cause them to take a closer look at the management of the company by Gary Pruitt, the chief executive who engineered the $4.4 billion acquisition of Knight Ridder in 2006 that saddled MNI with much of the debt that now clouds its future. MNI subsequently was forced by accounting rules to declare more than three-quarters of the value of the Knight Ridder deal as a loss.

After serving for years on the four-person board that manages the family stock holdings, Pruitt quietly resigned from the family board in September, citing a conflict between his role as CEO and a director of the trusts.

With Pruitt no longer attending the trust meetings as the dividends dry up, who knows where the conversation might go?
I have no idea what is taking the board so long. Photo credit: AP/H.W. Chiu
.
Previous:
.

15 comments:

Anonymous said...

Only the brain-dead would not know what has to be done. Outsource the CEO job to India. Rupee for rupee, you would at least get some ratio of worth.

McClatchy Watch said...

About outsourcing Gary Pruitt's job to India -- an alternative weekly in Sacramento actually posted a help-wanted ad for a “Media Company CEO” on India's craiglist.

Among the job specifications: "“reassuring staff members you have not yet let go that you have no plans to let them go (today); attending board meetings and Rolling Stones concerts via teleconference; and distracting angry callers (generally shareholders and vendors) by chit-chatting about the weather.”

Anonymous said...

A source inside the Washington Bureau says the McClatchy Board has met and given the publishers their marching orders. Reportedly, the Washington Bureau is "safe." Don't know if that means it will continue in its present form or lose some bodies. Each publisher is to decide how they will reach goals. Unfortunately, all of this is third hand and can't be confirmed. Rumor and hearsay is the best we have right now.

Anonymous said...

Mr. Pruitt, sahib, Can we take your word that are outsourced jobs are safe?

Anonymous said...

Anon: 7:12 AM
Self edit
"our" outsourced jobs are safe?

Anonymous said...

Suggestion Box:
McClatchy could dump the foreign reporters and go straight to a Hamas feed. Bias for less, at a considerable cost savings.

Anonymous said...

Altogether now, lets read the fine print:

Corporate Governance Guidelines of The McClatchy Company Overview - The Role Of The Board Of Directors:

It is the duty of the Board of Directors to oversee and [monitor the effectiveness of the CEO] and other senior members of management who are charged with the competent and ethical operation of the Company on a day-to-day basis. To satisfy this duty the directors will take an active, focused approach to their position, and set standards to ensure that the Company is [committed to business success] through maintenance of the highest standards of responsibility and ethics.

Anonymous said...

Gary Pru has gone from ‘Golden Boy to Dirty Old Man’ very quickly. Maybe that is the: ‘Change we can believe in’

Anonymous said...

Even if Pruitt is canned, it would not make one bit of difference in the death spiral of MNI.

No new magic man full of hope and change can save a ship with decks awash in debt.

Perhaps the board and the execs are just cleaning the bones of the cash cow, before they all jump in the last life boat.

Anonymous said...

The board is more dysfunctional than Pruitt's management. They've allowed him to continue on with the destruction. What a bunch of losers!

Archer05 said...

More worries:

The Death Of Dividends, More Money Out Of Consumer Pockets
By 24/7 Wall St.

Companies keep cutting dividends. Some are pressed for cash because of operating losses. Others are being constrained by higher debt service. Banks need to preserve capital.

The problem is becoming big enough that it could actually be a blow to consumer confidence and consumer spending.

Anonymous said...

Would it be even possible to estimate the salary and bonuses Pruitt has amassed from McClatchy? I would just like to know even a ballpark guess.

Anonymous said...

How does Pru even face McClatchy employees?

Anonymous said...

Take the Fort Worth Star-Telegram to India with him!

Anonymous said...

How does Pru even face McClatchy employees?
---------
He doesn't have too. They never look up and he wears platform heels just in case.