5 ms·

McClatchy upgrades CEO’s housing stipend to $35K a month amid buyouts

37 points by smacktoward 8y ago

evadne 8y ago
Relevant book: The CEO Pay Machine https://www.goodreads.com/book/show/31752824-the-ceo-pay-machine https://www.goodreads.com/book/show/31752824-the-ceo-pay-mac...
loeg 8y ago
The title is aggressively misleading: > According to Segal, this stipend will be used to pay for Forman’s travel, housing, office, and security expenses. It is probably still a lot of money for that, but it goes beyond just housing.
- jpatokal 8y ago
  But why are they paying him a cash stipend instead of expensing against receipts? Or is this meant to be more of a cap on how much he can spend on all that monthly?
  - loeg 8y ago
    Beats me. It seems like essentially they're paying him $2.4 million, just divided into 3 separate buckets.
    - babaganoosh89 8y ago
      It’s because the IRS has a $1 million limit on executive pay for tax deduction purposes. So all this stuff just helps get around that.
    - dkarbayev 8y ago
      $2.04M
      - lsaferite 8y ago
        $2.42M $35k x 12 = $420k
  - sidlls 8y ago
    It's trivial to cap expenses against receipts. Companies do this all the time for example with cell phone allowances.
  - deleted 8y ago
    [deleted]
- reaperducer 8y ago
  His newest contract with the company, dated January 25, 2019, includes a base pay of $1 million, a bonus of $1 million, and an additional $35,000 monthly stipend. >It is probably still a lot of money for that, but it goes beyond just housing. That’s good that the company is picking up all of his major expenses. After all, I don’t know how anyone is expected to live on just $2 million a year plus stock.
  - loeg 8y ago
    I agree with the sentiment, but $2.4mil/year isn't exactly out of line with other CEO total comp.
    - reaperducer 8y ago
      CEOs in other successful newspaper companies? Or CEOs in other failing newspaper companies? I'm OK with him making that kind of scratch if McClatchy was doing great journalism, making great returns for its stockholders, and being a good corporate citizen in the cities where it has newspapers. But it isn't. The CEO shouldn't be rewarded handsomely for being bad at his job.
reaperducer 8y ago
In his email on Friday, Forman attributed this latest reduction in staff to “the culmination of the enormous progress McClatchy has already made in our transition to a digital future,” Is there any industry where a reduction in headcount is considered “progress?” If Google would have reduced its employees by 19k, instead of increasing it by 19k in its most recent results, would that have been spun as “progress?”
- deleted 8y ago
  [deleted]
- slededit 8y ago
  It would if they maintained the same revenue and innovation velocity. The last one is really hard to judge though. Its quite common for a CEO to effectively cut R&D and be seen as a genious for reducing costs. The company dies a slow death resting on its goodwill for a decade or more.
- dingo_bat 8y ago
  Doing more with less number of people is the definition of progress. A business is not a jobs welfare scheme.
reaperducer 8y ago
I’d like to see a spreadsheet of McClatchy’s payroll to learn how many of its employees make less per year than the CEO gets in monthly expenses.
russellbeattie 8y ago
Now he can almost afford to rent a 3 bedroom house in Los Altos Hills or Atherton... (Just kidding, there are no 3 bedroom houses for rent in either place.)
- metildaa 8y ago
  That is on purpose, limiting the quantity of 2 bedroom units built and clamping down on the permitting process for 3 and 4 bedroom apartments and condos is critical for cities and towns that want to keep middle income and poor families from moving in and burdening their schools.
secabeen 8y ago
> The CEO’s compensation is set by the board of directors using public consultants and comparable. This may be true, but the Lake Wobegon effect is strong here, few companies want to hire a below-average CEO, and few companies want to offer a below-average CEO compensation package, so they just spiral up and up and up.
- chrisseaton 8y ago
  Why don’t these two statements and the resulting effect apply to workers other than the CEO though?
  - ImprovedSilence 8y ago
    Their salary & compensation isn't public, they have less information on what the market will bear for their skills. And that's how the company wants it to be.
danso 8y ago
So weird (but welcome) to see the ugly mundane details of the journalism industry on HN. I used to work at a McClatchy paper long ago but I have trouble mustering outrage about its CEO because the excesses of other companies seem far more egregious. The Tribune Company/Tronc (which owned the Chicago Trib, the LAT until recently, and the Baltimore Sun, which caused David Simon to ragequit journalism) was by far the most scandalous IMO [A]. The previous McClatchy CEO (who was there when I was there) made several million a year, despite being the CEO responsible for making the deals that absolutely eviscerated McClatchy with debt [0]. The standard line is that without good pay packages, a news company would have no chance of attracting competent executives to helm the sinking ship. But what was most frustrating to me at the time was the inescapable cynical belief that not only would the CEOs fail to right the ship, but that they had no real skin in the game and would just move on to the next high-paying job once the time was right. The fantasy that a news CEO would sacrifice his salary to save some vital newsroom jobs, or fund a company-saving initiative, and join us in the trenches and fight till the bitter end to save the company or at least go down with the ship was never even a remotely believable fantasy. Equally frustrating is there is also no possibility that the company could be saved by hardworking diligent faithful employees. The investigative stories of journalistic lore are virtually always loss-leaders. In recent years, winners of the Pulitzer had already left for other industries by the time they got their medals. Roger Ebert’s brand and special site would not have been enough to save the Sun-Times (even if he hadn’t died). Adrian Holovaty created Django while working at the Lawrence Journal World; Django is the backbone for tech companies as big as Instagram, but the LJW switched last year to WordPress [2], having lost the resources to innovate on or maintain its Django backend. [A] https://splinternews.com/tronc-executives-rewarded-for-incompetence-and-miscondu-1825051977 https://splinternews.com/tronc-executives-rewarded-for-incom... [0] https://archives.cjr.org/the_audit/the_aps_weak_coverage_of_its_n.php https://archives.cjr.org/the_audit/the_aps_weak_coverage_of_... [1] https://apnews.com/dc312a7e503f4b7bb61a62013fea852d https://apnews.com/dc312a7e503f4b7bb61a62013fea852d [2] https://www.reddit.com/r/django/comments/8v0fpb/the_lawrence_journalworld_where_django_was/ https://www.reddit.com/r/django/comments/8v0fpb/the_lawrence...
babaganoosh89 8y ago
This happens because the IRS has a $1 million limit on executive salaries for tax deduction purposes. All these other forms of payments just help get around that.
onetimemanytime 8y ago
>>To me local journalism is public service. I don’t think we should expect that anyone profits. Ok, I get it. But why should McClatchy, a for profit corp, shoulder all this?

37 points by smacktoward 8y ago

Relevant book: The CEO Pay Machine https://www.goodreads.com/book/show/31752824-the-ceo-pay-machine https://www.goodreads.com/book/show/31752824-the-ceo-pay-mac...

loeg 8y ago

The title is aggressively misleading: > According to Segal, this stipend will be used to pay for Forman’s travel, housing, office, and security expenses. It is probably still a lot of money for that, but it goes beyond just housing.

jpatokal 8y ago
But why are they paying him a cash stipend instead of expensing against receipts? Or is this meant to be more of a cap on how much he can spend on all that monthly?
- loeg 8y ago
  Beats me. It seems like essentially they're paying him $2.4 million, just divided into 3 separate buckets.
  - babaganoosh89 8y ago
    It’s because the IRS has a $1 million limit on executive pay for tax deduction purposes. So all this stuff just helps get around that.
  - dkarbayev 8y ago
    $2.04M
    - lsaferite 8y ago
      $2.42M $35k x 12 = $420k
- sidlls 8y ago
  It's trivial to cap expenses against receipts. Companies do this all the time for example with cell phone allowances.
- deleted 8y ago
  [deleted]
reaperducer 8y ago
His newest contract with the company, dated January 25, 2019, includes a base pay of $1 million, a bonus of $1 million, and an additional $35,000 monthly stipend. >It is probably still a lot of money for that, but it goes beyond just housing. That’s good that the company is picking up all of his major expenses. After all, I don’t know how anyone is expected to live on just $2 million a year plus stock.
- loeg 8y ago
  I agree with the sentiment, but $2.4mil/year isn't exactly out of line with other CEO total comp.
  - reaperducer 8y ago
    CEOs in other successful newspaper companies? Or CEOs in other failing newspaper companies? I'm OK with him making that kind of scratch if McClatchy was doing great journalism, making great returns for its stockholders, and being a good corporate citizen in the cities where it has newspapers. But it isn't. The CEO shouldn't be rewarded handsomely for being bad at his job.

reaperducer 8y ago

In his email on Friday, Forman attributed this latest reduction in staff to “the culmination of the enormous progress McClatchy has already made in our transition to a digital future,” Is there any industry where a reduction in headcount is considered “progress?” If Google would have reduced its employees by 19k, instead of increasing it by 19k in its most recent results, would that have been spun as “progress?”

deleted 8y ago
[deleted]
slededit 8y ago
It would if they maintained the same revenue and innovation velocity. The last one is really hard to judge though. Its quite common for a CEO to effectively cut R&D and be seen as a genious for reducing costs. The company dies a slow death resting on its goodwill for a decade or more.
dingo_bat 8y ago
Doing more with less number of people is the definition of progress. A business is not a jobs welfare scheme.

reaperducer 8y ago

I’d like to see a spreadsheet of McClatchy’s payroll to learn how many of its employees make less per year than the CEO gets in monthly expenses.

russellbeattie 8y ago

Now he can almost afford to rent a 3 bedroom house in Los Altos Hills or Atherton... (Just kidding, there are no 3 bedroom houses for rent in either place.)

metildaa 8y ago
That is on purpose, limiting the quantity of 2 bedroom units built and clamping down on the permitting process for 3 and 4 bedroom apartments and condos is critical for cities and towns that want to keep middle income and poor families from moving in and burdening their schools.

secabeen 8y ago

> The CEO’s compensation is set by the board of directors using public consultants and comparable. This may be true, but the Lake Wobegon effect is strong here, few companies want to hire a below-average CEO, and few companies want to offer a below-average CEO compensation package, so they just spiral up and up and up.

chrisseaton 8y ago
Why don’t these two statements and the resulting effect apply to workers other than the CEO though?
- ImprovedSilence 8y ago
  Their salary & compensation isn't public, they have less information on what the market will bear for their skills. And that's how the company wants it to be.

danso 8y ago

So weird (but welcome) to see the ugly mundane details of the journalism industry on HN. I used to work at a McClatchy paper long ago but I have trouble mustering outrage about its CEO because the excesses of other companies seem far more egregious. The Tribune Company/Tronc (which owned the Chicago Trib, the LAT until recently, and the Baltimore Sun, which caused David Simon to ragequit journalism) was by far the most scandalous IMO [A]. The previous McClatchy CEO (who was there when I was there) made several million a year, despite being the CEO responsible for making the deals that absolutely eviscerated McClatchy with debt [0]. The standard line is that without good pay packages, a news company would have no chance of attracting competent executives to helm the sinking ship. But what was most frustrating to me at the time was the inescapable cynical belief that not only would the CEOs fail to right the ship, but that they had no real skin in the game and would just move on to the next high-paying job once the time was right. The fantasy that a news CEO would sacrifice his salary to save some vital newsroom jobs, or fund a company-saving initiative, and join us in the trenches and fight till the bitter end to save the company or at least go down with the ship was never even a remotely believable fantasy. Equally frustrating is there is also no possibility that the company could be saved by hardworking diligent faithful employees. The investigative stories of journalistic lore are virtually always loss-leaders. In recent years, winners of the Pulitzer had already left for other industries by the time they got their medals. Roger Ebert’s brand and special site would not have been enough to save the Sun-Times (even if he hadn’t died). Adrian Holovaty created Django while working at the Lawrence Journal World; Django is the backbone for tech companies as big as Instagram, but the LJW switched last year to WordPress [2], having lost the resources to innovate on or maintain its Django backend. [A] https://splinternews.com/tronc-executives-rewarded-for-incompetence-and-miscondu-1825051977 https://splinternews.com/tronc-executives-rewarded-for-incom... [0] https://archives.cjr.org/the_audit/the_aps_weak_coverage_of_its_n.php https://archives.cjr.org/the_audit/the_aps_weak_coverage_of_... [1] https://apnews.com/dc312a7e503f4b7bb61a62013fea852d https://apnews.com/dc312a7e503f4b7bb61a62013fea852d [2] https://www.reddit.com/r/django/comments/8v0fpb/the_lawrence_journalworld_where_django_was/ https://www.reddit.com/r/django/comments/8v0fpb/the_lawrence...

babaganoosh89 8y ago

This happens because the IRS has a $1 million limit on executive salaries for tax deduction purposes. All these other forms of payments just help get around that.

onetimemanytime 8y ago

>>To me local journalism is public service. I don’t think we should expect that anyone profits. Ok, I get it. But why should McClatchy, a for profit corp, shoulder all this?