Why would any company pay off a departing CEO who saw the stock price decline 80% with an 8 figure package equal to more than the last 4 years of earnings, or 2.4% of the company's formerly billion-dollar market value? The foundering New York Times Company has done just that, rewarding failed CEO Janet Robinson, 61, with a departure package worth a whopping 23.7 million dollars. The company released its proxy materials yesterday, ensuring they would be reported on Saturday, the corporate world's equivalent of a Friday afternoon document dump.

During Robinson's 8 years at the company, it has collapsed from a highly profitable media company down to a money-losing property which has sold off its valuable assets, including a chain of television stations, to stay afloat. (For some of the sad history of management bungling, see this, this, and this.) Part of the deal is $4.5 million dollars in consulting fees for this year, or four and half times her salary for 2011.

What does Ms. Robinson know that is worth so much money?

Perhaps some of what she knows pertains to Arthur Ochs Sulzberger, Jr., AKA Pinch. Mr. Sulzberger inherited his job as chairman in the family-controlled company in 1997, and who replaced Robinson as acting CEO when she suddenly departed last December.

Edmund Lee of Bloomberg points out something quite awkwardly coincidental:

Times Co. began offering buyout packages in October to eliminate 20 newsroom positions at its namesake newspaper and is also pushing for a pension freeze for some New York Times employees, a move that rankled the union members in the newsroom, Newspaper Guild of New York President Bill O'Meara has said.

The Guild, representing almost 1,100 employees at the New York Times, said the company sought to re-open negotiations a day after Robinson's departure was announced. Robinson's exit package doesn't sit well with newsroom employees, O'Meara has said. Even with a pension freeze for currently employed Guild members, O'Meara estimates Times Co. would still have to pay about $20 million to $25 million each year to retirees to honor prior obligations.

So Robinson's golden handshake is costing as much as the company's entire retirees pension obligations, which the company is now trying to get out of honoring.

There was also a reshuffle, but rest assured another family member is there to ensure Pinch keeps his job.

The company also nominated Steven B. Green to the board, replacing Lynn Dolnick, a member of the Ochs-Sulzberger family that controls the board with 90 percent of Class B shares. Green is married to Chairman Sulzberger's sister Cynthia Fox Sulzberger. Separately, Sulzberger's son, Arthur Gregg, a reporter at the newspaper, was recently appointed as an editor on the metro desk, following a path once cut by his father.

In the company's letter to shareholders, Pinch writes:

2011 was another year of shared sacrifices at our Company, both for employees and shareholders. Given that, my cousin and our vice chairman, Michael Golden, and I jointly requested that the Board limit our 2011 compensation to that of the prior year. The money that was saved has reduced Company expenses.

If shared sacrifice (which in Pinchworld means no raise, but to others means layoffs, reduced pensions, and cutbacks) is the key, why is Robinson getting such lush treatment? Where is her sacrifice?

I am certain the company lawyers vetted the entire transaction with Robinson and that it is legal. But it smells very bad.

Hat tip: Jack Kemp and David Paulin