I came across a story this morning that I wanted to share with everyone as it seems to embody some of the rage being expressed as part of the Occupy Wall Street that has spread to other parts of the country and world.
In the article, titled, “Ex-Gannett Reporter Shreds Publisher over Dubow’s $37 million Parting Gift“, former Gannett employee Peter Lewis takes Gannett and departing CEO Craig Dubow to task for a giant severance package even though the company went backwards during Dubow’s tenure.
Basically, Dubow, who resigned as CEO last Friday, is being paid $37 million even though when he took over the company, the stock price was near $70 and now is closer to $10 a share. So, at the time Dubow took over, and assuming the number of outstanding shares was similar to today, Gannett had a market capitalization value of over $17 billion compared to its present market cap of $2.6 billion; quite a haircut. Also during the six year period Dubow was in charge, the head count went from 52,000 to 32,000.
Now, it is noted that Dubow managed to return Gannett to profitability, which at the end of the day, is exactly what investors are looking for. But, if one of the measurements of success for a company is the increase in its share price, Dubow failed miserably.
Apparently Dubow was entitled to the $37 million severance package, but it brings in to question, how does something like this happen? I mean, if he had managed during one of the most difficult times in the history of media to figure out a way to steady the company and turn it around while its stock price climbed steadily, that would be impressive. Instead, he had to let 20,000 people go and the stock price spiraled under his leadership.
I don’t have enough details to fully pass judgement, but you can imagine the type of reaction this story will get from those same individuals who are marching on Wall Street. To them, it will seem incomprehensible that someone could receive millions of dollars for such underwhelming performance. And, to be honest, I have to say I feel the same way.