Gannett Co. bought The Des Moines Register in 1985. The Register was a great newspaper; at the time it had won more Pulitzer prizes for national reporting than any other newspaper save The New York Times. I worked for The Register in college and for several years afterward, before my knowledge of soybeans and hogs proved irresistible to The Times and I moved to New York. A couple of years later, when Gannett bought The Register I asked a Gannett executive: How do you pronounce the name of your company? Is it GAN-nett, or gan-NETT?
“It’s gan-NET,” he said. “The emphasis is always on the net.”
He was, of course, referring to the amount of money that is left over after expenses and taxes and accounting tricks … otherwise known as profits. (He was not referring to the Internet, of which Gannett still has barely a clue.)
So it was with profound sadness that I learned of the resignation of Gannett CEO Craig Dubow last week for health reasons. Mr. Dubow, 56 years old and a 30-year veteran of the company, assumed the helm of Gannett six years ago but has been plagued by back and hip problems. Like Steve Jobs, who was four months younger than he, Dubow took a couple of medical leaves of absence before deciding that he could no longer carry out the duties of CEO.
And that’s where the similarities with Steve Jobs end. I do not know Mr. Dubow personally, and have no reason to doubt that he is a fine fellow. My sadness comes not from his departure from Gannett, but for what it exemplifies.
When Dubow took over as CEO, Gannett employed some 52,000 people in its publishing, broadcast, digital and mobile divisions. When he resigned last week, it employed 32,000 people. Among the 20,000 jobs that were cut were thousands of talented journalists. Mr. Dubow also required many employees to take unpaid leaves of absence, and instituted pay freezes. He referred to this as “increasing workplace efficiencies.”
When Dubow took over as CEO, Gannett’s stock price was $72-something a share. At his departure last week it was $10-something, down 85 percent in his tenure.
Last year, while laying off more journalists, Gannett increased Mr. Dubow’s 2010 pay package to $7.9 million. Including the estimated future value of stock awards and options, his 2010 pay package could increase to $9.4 million. Gannett said the raise was meant to reward Mr. Dubow for boosting the publisher’s earnings — remember, the emphasis is always on the net — for the fourth consecutive year.
Mr. Dubow managed to keep earnings high, according to analysts, by cutting costs (i.e. people) more aggressively than any other company in the media industry. Gannett refers to this as “workplace restructuring.”
Mr. Dubow is now eligible to collect a retirement and disability pay package of $37.1 million, according to Gannett.
Bob Dickey, the head of Gannett’s U.S. newspapers division, also got a hefty pay raise in 2010 to $3.4 million, up from $1.9 million the year before. In a memo this summer announcing that 700 more newspaper jobs would be eliminated, Mr. Dickey wrote: “While we have sought many ways to reduce costs, I regret to tell you that we will not be able to avoid layoffs.”
But back to Mr. Dubow. We mentioned the Steve Jobs comparison, and I hasten to add that I wish Mr. Dubow a speedy recovery from the medical problems that required his leaves of absence and resignation.
- Annual base pay: Steve Jobs $1. Craig Dubow $1.2 million.
- Stock price during CEO tenure: Apple, up 4,000+ percent. Gannett, down 85 percent.
- Job creation during CEO tenure: Apple, plus 28,000. Gannett: minus 20,000.
- Notable new products as CEO of Apple: Macintosh, iMac, MacBook, iPod, iTunes, Apple Stores, iPhone, iPad, etc., etc.
- Notable new products as CEO of Gannett: ?
In his resignation statement, Mr. Dubow insisted that his top priority as CEO was to serve the consumer:
“I am extremely proud of where we are today as a company. We have always maintained an unwavering focus on the consumer. As a result, we have evolved into a digitally led media and marketing solutions company committed to delivering trusted news and information anywhere, anytime.”
And the Gannett board insisted that serving the consumer — not, of course, to maximize corporate profits and executive compensation — was the corporate goal.
“Craig championed our consumers and their ever-changing needs for news and information,” said Marjorie Magner, non-executive chairman of Gannett’s board of directors.
Gracia Martore, who replaces Dubow as CEO, said: “We will continue our relentless quest to provide trusted news and information and will actively support the people and businesses in the communities we serve.”
These people are lying. The corporate goal is not to serve the consumer; it’s to maximize profits and pay packages for top executives. Can anyone argue that Gannett newspapers and journalism are better today, and that news consumers are better served?
How did Mr. Dubow and Gannett serve the consumer? They laid off journalists. They cut the pay of those who remained, while demanding that they work longer hours. They closed news bureaus. They slashed newsroom budgets. As revenue fell, and stock prices tanked, and product quality deteriorated, they rewarded themselves huge pay raises and bonuses.
This is the sort of stuff that causes people to occupy Wall Street and main streets in cities across the country.
UPDATE 10/12: This piece has been updated to clarify that I left The Des Moines Register before it was acquired by Gannett. I have never worked for Gannett. (Nor, I suspect, will I ever.)
UPDATE 10/12: Edited to correct reference to Pulitzer Prizes; The Register had won more Pulitzers for national reporting (not total prizes) than any paper other than The New York Times.