PrintSeptember 19, 2009
New York Times Company humiliates itself in public
This just looks bad. Really bad. The New York Times Company has been required to reveal startling management incompetence, an inability to correctly apply its own executive compensation scheme to the top two figures in the company, overpaying the bosses. Publicly-traded corporations like the Times must file a Form 8K within four days of various events, so the details of the screw-up are now on the record. The company filed the 8K following the end of trading yesterday. A summary of the substance is here.
It is deeply embarrassing to have to admit that your level of management professionalism is so low that you can't follow your own rules. The top admitting that it overpaid itself makes it worse. But when the two executives discovered to be hauling away a bit too much lucre turn out to be Pinch Sulzberger and Janet Robinson, on whose watch the company's fortunes have plummeted, the whole thing becomes a sick joke on the shareholders.
Even worse, the two beneficiaries of the excess largesse, who are also the two people responsible for maintaining a level of management sufficient to follow the rules, are not going to lose anything! The company is actually going to make them whole.
Mark Fitzgerald and Jennifer Saba of Editor & Publisher write:
... to compensate the two for the lost value, the board of directors' compensation committee drafted up a new plan granting "replacement" SARs, or stock appreciation rights.
Both Robinson and Sulzberger enjoy million dollar-plus salaries with upside potential of 200% under the company's bonus compensation scheme. This at a time when the newsroom endures layoffs and printers have lost their high paying blue collar livelihoods. Sacrifice is the order of the day in the ranks.
It seems to me that on a symbolic level this action in making whole the people responsible for the mess whole is incredibly stupid. The two people at the top helped themselves to more than was allowed. And when the error is discovered they get rewarded. The editorial staff and the general public see all this.
This doesn't sound like the proper way to rescue a failing company, which needs the loyalty of its employees and customers. People take their cues from the behavior at the top.
In Japan, the honorable thing to do would be to resign in disgrace.
In Japan, the honorable thing to do would be to resign in disgrace.
