A federal bankruptcy judge has cleared the way for Journal Register Co. to emerge from bankruptcy protection, but Connecticut’s attorney general vows to appeal the ruling, which approves over $1 million in bonuses for executives. "This decision means that bankruptcy is no bar against bloated big-time bonuses," says Connecticut Attorney General Richard Blumenthal.I didn't know there was any barrier against paying big bonuses to execs who have a record of failure.
In fact, paying tons of money to newspaper execs seems to be the rule -- even if they have helped drive their companies into bankruptcy.
Take McClatchy. VP of operations Lynn Dickerson was laid off last week, and the company rewarded her with a $690,000 lump sum severance package.
The remaining McClatchy executives are sitting pretty.
CEO Gary Pruitt declined his 2008 and 2009 bonuses, and his 2009 base salary was reduced by 15 percent. Salaries of executive officers were also cut by 15 percent.
But even with Pruitt waiving his bonus and the execs taking a 15% salary reduction, the corporate suits are well compensated, regardless of the company's near-desperate financial condition. According to published reports, Gary Pruitt made $4.6 million in total compensation last year, and the VPs made about $1 million each. Nice work if you can get it.
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10 comments:
What? You think you could find a group of people that could take, what was one of the most powerful entities in the country, and destroy it in less than three years for a buck seventy five an hour?
Look at MNI's stock price today, $0.39 cents per share.
MNI's stock almost hit an all time low today.
It's looking bad for McClatchy.
$4.6 million! Was that cash or a mix of things like worthless stock options? How much was cash?
An objection filed with the court, by state Attorney General Richard Blumenthal and the Central States Pension Fund, charged the scheme was illegal in that it rewarded executives for work accomplished before the company filed for bankruptcy protection and thus was against Section 503 of the Bankruptcy Code, passed in 2005 by Congress.
Blumenthal Tuesday castigated the judge’s ruling and left open the possibility of an appeal.
“This decision means that bankruptcy is no bar against bloated big-time bonuses. The unfortunate bankruptcy court ruling means that JRC executives will be substantially rewarded more than $1.3 million in blatantly undeserved bonuses for shutting down newspapers and laying off employees,” Blumenthal said.
“While most employees lose their jobs for poor performance, JRC executives will be paid extra for failure — causing job losses and shuttering offices.”
“My office raised strong objections because the JRC failed to justify the purpose and necessity of these payments, including who will receive them, and how much each executive will receive. While we disagree with the court’s decision, our objections compelled a more stringent and thorough review of the bonus proposal by the court and afforded all creditors and parties the opportunity to review and vote on this plan.
“My office is reviewing the decision and will determine whether further action is appropriate.”
Gropper did not publish his decision until nearly two weeks after the June 25 hearing.
Numerous calls seeking comment placed Tuesday to JRC spokesman Gary Struening and lawyers Shaunna D. Jones and Rachel Strickland of Willkie Farr & Gallagher, who represented JRC, were not returned.
Greg Hladky, the Register’s Capitol Bureau chief until he was fired and the bureau eliminated in March of 2008, said in a telephone interview Tuesday that the hatchet bonuses were “a sad but accurate reflection of what the worst of corporate America is doing to the nation.” He called it “a weird point in time for communication companies,” not just JRC.
Asked about Conway’s statement that no more layoffs were in the cards, he said managers may believe these promises when they make them, but since these continual promises keep getting broken, it’s “difficult to believe them.”
1:18 -- as I understand it, Gary Pruitt received $4.6 million in total compensation, of which $1.1 million was base salary.
Pruitt gets $4.6 million and we had to ration toilet paper at the Distribution Center... Amazing !!
gary was the right idiot at the right time for mcclatchy's demise, totally in over his head along with numerous other corporate managers ! If any other company out there is looking for loser managers and executives look no further than mcclatchy.
The McClatchy/Titanic ship is sinking fast. The lifeboats are all spoken for already. Pruitt first, Yes-Men second, BOD third, and the other employees are free to find jetsam and flotsam to try and hold their heads above water.
Cue: The Rolling Stones music
♫ YESTERDAY'S PAPERS ♫
(Jagger/Richards)
Who wants yesterdays papers
Who wants yesterdays girl
Who wants yesterdays papers
Nobody in the world
After this time I finally learned
After the pain and hurt
After all this what have I achieved
I've realized it's time to leave
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