NYT Pays Former CEO $24 Million To Go Away; The Paper Made $3 Million Total Over The Last 4 Years

from the something-isn't-adding-up dept

Mon, Mar 12th 2012 4:03pm — Mike Masnick

Unlike some, I'm not that up in arms over high CEO pay... if they deserve it. In an open market, if an executive can command top dollar, based on strong performance, I'm all for it. However, if the pay is so totally divorced from performance as to be completely laughable, you have to wonder what's up. Case in point: former NY Times CEO Janet Robinson received an "exit package" of $23.7 million. It was broken down thusly:

Robinson gets pension and supplemental retirement income valued at $11.4 million, performance awards of $5.39 million, restricted stock units worth $1.07 million and stock options worth $694,164, according to the company’s proxy statement filed with the Securities and Exchange Commission today. She will also earn $4.5 million in consulting fees for this year.

Now perhaps you can argue that this is well deserved and negotiated. But here's a key data point found in the same article:

The payout to Robinson is equal to about 2.4 percent of the company’s market value of $981.9 million, and exceeds the approximately $3 million the company earned in net income over the past four years. Not included in Robinson’s exit package is her salary of $1 million for 2011, when Times Co. reported a loss $39.7 million.

Okay. One argument you can make is that at least the NYTimes made some money over the last four years. But can we ask what kind of "performance awards" would make sense when the award massively exceeds the actual profit of the company? Similarly, what kind of "consulting fees" would make sense when those consulting fees also exceed the profit of the company over the last four years combined?

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Filed Under: ceo pay, executive pay, janet robinson, performance bonus
Companies: ny times

51 Comments

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Steve, 12 Mar 2012 @ 4:17pm

Early but expensive pullout reward
Janet's just getting the same sort of "performance bonus" that the current administration doles out to still-existing but failed operations like Fannie Mae and Freddie Mac.

http://www.google.com/url?sa=t&rct=j&q=fannie%20mae%20and%20freddie%20mac%20bailout& amp;source=web&cd=1&ved=0CCwQFjAA&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FFederal_tak eover_of_Fannie_Mae_and_Freddie_Mac&ei=ZoNeT-XPPIWRiALHjq3VBA&usg=AFQjCNHcHa45G1hT_J-nZgAjbh k0LvmyMA

Get used to it: the Washington D.C. gravy train's gonna keep gaining inertia all the way to November...
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- Anonymous Coward, 12 Mar 2012 @ 4:33pm
  
  Re: Early but expensive pullout reward
  So if I want to be rich all I have to do is become a CEO and ... fail?
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  - Jay (profile), 12 Mar 2012 @ 6:37pm
    
    Re: Re: Early but expensive pullout reward
    Pretty much.
    
    This has been going on since the 70s. But if you want to see bankruptcy bonuses, the reporters at the WSJ have the best story about how disproportionate it is.
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  - Anonymous Coward, 12 Mar 2012 @ 6:38pm
    
    Re: Re: Early but expensive pullout reward
    Yes.
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  - Troll, 12 Mar 2012 @ 6:59pm
    
    Re: Re: Early but expensive pullout reward
    My guess is you are half way there.
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    - DCX2, 13 Mar 2012 @ 9:31am
      
      Re: Re: Re: Early but expensive pullout reward
      Yeah, but the last part is easy.
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- Mike42 (profile), 13 Mar 2012 @ 4:59am
  
  Re: Early but expensive pullout reward
  Yeah, current administration...
  It's called a "contract". They were contractually obligated to pay the BS bonuses. You pay them or a bunch of lawyers when they sue. What choice would you make?
  Really, Steve. There's plenty of problems with the current administration, but this isn't one of them. Rake you muck elsewhere.
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- Anonymous Coward, 20 Mar 2012 @ 11:27am
  
  Re: Early but expensive pullout reward
  "Get used to it: the Washington D.C. gravy train's gonna keep gaining inertia all the way to November..."
  
  Let's all thank the reign of King Bush for putting it in place and implementing it.
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Ben (profile), 12 Mar 2012 @ 4:18pm

Net/gross
Maybe the net income is after insane bonus payments?
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JayTee (profile), 12 Mar 2012 @ 4:24pm

I guess they've made so little profit because they've had to pay her so well
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Anonymous Coward, 12 Mar 2012 @ 4:32pm

The NY Times is run by morons.
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- Anonymous Coward, 12 Mar 2012 @ 10:15pm
  
  Re:
  Quick, give them more money
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Anonymous Coward, 12 Mar 2012 @ 4:32pm

Don't you find it a little misleading to include pension in there? After all, if he lives out 30 years, that pension money is only $380,000 a year.

As for the rest of it, I would say that he had a pretty good contract with some pretty low performance goals.
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- Anonymous Coward, 12 Mar 2012 @ 4:34pm
  
  Re:
  Janet Robinson...he?
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- Anonymous Coward, 12 Mar 2012 @ 4:37pm
  
  Re:
  Unless the NY Times is using some sort of creative accounting to hide their true income, paying out more than you make is never ever a good idea, reasonable or whatever you want to call it, you pay what you can or you go under, so paying 100x your yearly revenues doesn't seem like a good plan at all, it doesn't matter how much she lives or what you think, we live in the real world and you don't give out what you don't have just to be nice.
  
  What did the NY Times did to get that money? took a loan?
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  - Anonymous Coward, 12 Mar 2012 @ 6:33pm
    
    Re: Re:
    AC, that was the net profit, not the gross revenue. It's a bit misleading to use the profit for a comparison - what if the company had only made $1? Obviously you can't just give her 50 cents. A better figure is the worth of the company.
    
    "The payout to Robinson is equal to about 2.4 percent of the company�s market value of $981.9 million" according to the article. That's still WAY too much, of course. The article says her salary was $1 million in 2011. Assuming she got that much every year, then since she was there for 7 years, her total salary would have been around $7 million. Even excluding the retirement benefits (I don't think you can take away a pension if she's earned it) and the consulting fees (presumably she's doing something to earn this?) they are STILL paying her more than her entire salary for the entire 7 years.
    
    "She will also earn $4.5 million in consulting fees for this year." How is this sane? They're paying her 4.5 times more to be a "consultant" than to be the CEO?
    
    "performance awards of $5.39 million" - here it's fair to use the profits as a comparison. Performance awards for more than the company made in the last 4 years combined? What were the performance bars - don't go bankrupt?
    
    So this brings up the question: WHY are they paying her this? Did they actually sign a contract stating that they would pay her an insane amount if she ever left? Are there REALLY no semi-competent CEO's out there that would be willing to take the job for "only" the salary and retirement benefits the job pays, without a clause that says they must be paid millions to go away?
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    - Anonymous Coward, 12 Mar 2012 @ 8:58pm
      
      Re: Re: Re:
      Quote:
      Obviously you can't just give her 50 cents. A better figure is the worth of the company.
      
      Why not, she didn't do anything to improve the company status, she obviously didn't earn anything, if I plant a crop and I almost had it grown but it didn't happen would it be acceptable for me to stop working and demand to be paid anything? of course not I would be on the gutter begging for food and everybody telling me I should work harder, also those are benefits that got beyond her normal salary.
      
      Now to speculate on your question of why they are paying her that amount, I can only believe that she must have some dirt on them because really you don't get to walk away and do such deals without the other side being made up of idiots or without leverage, so probably the NY Times is dirty, because I don't want to believe one of the most influential newspapers in America is full of idiots commanding that organization, but I can't exclude the possibility completely either so I will assume the NY Times is dirty and is doing something so wrong that she got the upper hand on the negotiations, they may be hiding financial information that if it got out would dry their sources of credit, they may be lying about something.
      
      This is how rot looks inside a company.
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      - Chuck Norris' Enemy (deceased) (profile), 13 Mar 2012 @ 7:19am
        
        Re: Re: Re: Re:
        if I plant a crop and I almost had it grown but it didn't happen would it be acceptable for me to stop working and demand to be paid anything?
        
        Government would subsidize you...but it would have been better if you didn't put any effort in at all in the first place.
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  - TtfnJohn (profile), 12 Mar 2012 @ 6:47pm
    
    Re: Re:
    They went to MoneyMart
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- Anonymous Coward, 12 Mar 2012 @ 5:01pm
  
  Re:
  ONLY $380,000 a year. Lol.
  
  Which the average middle class family is lucky to see/make ONLY half that amount, if that.
  
  I think ONLY $380,000 a year would be a goddamn insane amount in my book. I could live COMFORTABLY off $50,000 a year and I'm still working my way up and make not even half of that amount and I manage to get more than by.
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  - Anonymous Coward, 12 Mar 2012 @ 10:30pm
    
    Re: Re:
    yeah, well, when you are making a million a year working, $380,000 in retirement is "only".
    
    It all depends where you stand.
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    - Anonymous Coward, 13 Mar 2012 @ 4:44am
      
      Re: Re: Re:
      (Cue world's tiniest violin)
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    - DCX2, 13 Mar 2012 @ 9:36am
      
      Re: Re: Re:
      A person's inability to be fiscally responsible does not negate their existing wealth and income. $380k/year is not "only". If someone thinks it is "only", that's only because they foolishly loaded up on huge debts.
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  - Anonymous Coward, 13 Mar 2012 @ 7:24am
    
    Re: Re:
    https://twitter.com/#!/GSElevator/status/150222267333353473
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mudlock (profile), 12 Mar 2012 @ 4:38pm

I suppose it's possible that if they had hired someone else, that person would have produced net earnings of negative several million dollars? Maybe?
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- Anonymous Coward, 12 Mar 2012 @ 4:51pm
  
  Re:
  What kind of person takes all the money they can get out of a business that doesn't have the money to pay it?
  
  Whatever person that is one thing I can say, it is not the kind of person that is there to make it a success, that is not what motivate those people.
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Anonymous Coward, 12 Mar 2012 @ 4:48pm

Obviously....
Obviously the consulting fees were for a 'method to reward CEO's far in excess of company profits while constantly blaming... PIRACY.... PIRACY..... PIRACY as the reason the company is no longer able to make any profit'

Secondary payment was for, 'how to try and sneak this under the radar' which forgot to include the 'do not include irrelevant data, like company profits or earnings, in SEC filings about executive compensation'....

Totally worth 5M for the first one, but would have had to fine the consultant 4.5M for the oversight in the second consultation.....
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- Endtimer (profile), 12 Mar 2012 @ 7:23pm
  
  Re: Obviously....
  The NYT blamed Piracy? For what? People ripping off the articles they post online for anyone to read? And where did you read about their protests? Was it in an article like the one below? Yeah, they're real anti piracy.
  
  http://www.nytimes.com/2012/02/06/opinion/steal-this-column.html?_r=1&ref=thepirateba y
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- techflaws.org (profile), 13 Mar 2012 @ 4:21am
  
  Re: Obviously....
  And why would anyone hire someone for consulting when they failed (why else would they let her go)?
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Steve R. (profile), 12 Mar 2012 @ 4:50pm

Another Pathetic Example
American CEO seem to believe that the companies that they manage are their own private fiefdoms. The concept that they work for the shareholders or that they be ethical has vaporized. Particularly inept was the recent $4 Billion dollar break-up fee that AT&T (management) was obligated to pay for its failed attempt to take over T-Mobile.
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- Chargone (profile), 13 Mar 2012 @ 12:51am
  
  Re: Another Pathetic Example
  ... then you look at, say, games companies who, at least according to them, Do do things because that's what the shareholders want...
  
  admittedly, they don't seem to be loosing money (mostly, yet) but the customer gets epicly shafted.
  
  i think it's more a case of the elites in general being completely divorced from reality...
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Ed C., 12 Mar 2012 @ 6:09pm

Gotta give her some credit...
Despite how incompetent you think Janet Robinson was, she was still apparently smarter than the all of the members on the company board!
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- Jay (profile), 12 Mar 2012 @ 6:48pm
  
  Re: Gotta give her some credit...
  No, I'm pretty sure the rules of bankruptcy weren't followed. CEO pays have been getting very outrageous, paying the CEOs for failing in their job. It's the same as saying Mitt Romney is going to do a great job as president because his background is in "business."
  
  He wouldn't know what the free market if it bit him on the ass. The problem with Bain Capital is that it relies on tax loopholes in federal laws to make money.
  
  Mitt Romney used "leveraged buy-outs" which is explained as thus:
  
  The leveraged buy-out firm will put down a fraction of the cost of buying an ailing company. The balance of the transaction is borrowed, but the debt goes onto the books of the target company, not the private equity firm � the struggling company basically finances the lion's share of its own sale.
  
  The target company's debt payments increase significantly, and those debt payments are then written off, reducing its tax burden significantly. This subsidy increases short-term revenues � at the expense of long-term debt � and that, in turn, is paid out in dividends to Bain's investors and a fat stream of management fees that Romney and his partners skimmed off the top.
  
  To get back on topic, there are CEOs that will cause a company to fail intentionally. But the company will lay off workers and make sure to pay the CEO even though their direction lead to the failing of the company. It's quite ridiculous, but even judges (as my previous post in this section can attest) will allow these rules instead of reject them for the business failing.
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  - Steve R. (profile), 12 Mar 2012 @ 7:16pm
    
    Re: Re: Gotta give her some credit...
    "... there are CEOs that will cause a company to fail intentionally." Solyndra may be an example of using tax credits/incentives and government backed loans to temporarily fund a company that does not have a valid business model.
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  - Ed C., 12 Mar 2012 @ 10:15pm
    
    Re: Re: Gotta give her some credit...
    Right, but none of that actual refutes what I said. I mean, if Janet Robinson, Mitt Romney, or any of those other shysters weren't smarter than the board, they wouldn't have been able to rip off the companies like they did. I'm not saying that any of them are all that bright either, just that they are smarter than the idiots who hired them.
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    - Jay (profile), 13 Mar 2012 @ 12:20am
      
      Re: Re: Re: Gotta give her some credit...
      I wasn't trying to refute your statement. I was adding to it. But I would say that they are more cunning, if anything. Doesn't take much to look at the at the tax code and make loopholes.
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    - Jay (profile), 13 Mar 2012 @ 12:21am
      
      Re: Re: Re: Gotta give her some credit...
      I wasn't trying to refute your statement. I was adding to it. But I would say that they are more cunning, if anything. Doesn't take much to look at the at the tax code and make loopholes.
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Anonymous Coward, 12 Mar 2012 @ 7:08pm

Its called looting the company...
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- Chargone (profile), 13 Mar 2012 @ 12:55am
  
  Re:
  had that happen to a few things here...
  asset stripping is also unhelpful.
  
  (usually happened when American interests gained control of significant assets which were only marginally profitable in their own right, if that, but required to allow other things to function properly. such as the railways. the instances of it happening Without American involvement generally are due to people who made their money exploiting the system rather than actually DOING anything... who think NZ should be more like the USA. still not sure how the hell we ended up with John Key as PM when everyone KNEW he was one of these people...)
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Anonymous Coward, 12 Mar 2012 @ 7:13pm

Maybe she prevented the company from losing MORE money than it did?
Quite often, effects can take years to show.
Companies used to pay CEOs based on current growth and income. So CEO's would take measures that benefited short term growth. You know, like banks making really bad risky investments that in time would crash? But it was ok, because the people who made those decisions cashed out when the banks were showing profits.
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- The Devil's Coachman (profile), 12 Mar 2012 @ 7:31pm
  
  Re:
  You sound very confused.
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  - Chargone (profile), 13 Mar 2012 @ 12:56am
    
    Re: Re:
    not really. ignoring the first sentence i can actually see the logic.
    
    doesn't change how stupid the result is though.
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Chris B, 12 Mar 2012 @ 7:33pm

>Maybe she prevented the company from losing MORE money than it did?

A very large stock option would be appropriate. Say 10 million options at a $7.50 (currently trading at $6.50) strike price. That way the CEO will have a very large stake in the companies future, if they've bothered to deliver one.
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The Devil's Coachman (profile), 12 Mar 2012 @ 7:44pm

Maybe she just stunk the place up too much?
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Scott, 12 Mar 2012 @ 7:53pm

Everyone Plays Numbers Games
It's worth noting that the $3 million dollar profit includes a loss of $39 million in 2011. This means that in the prior 3 years they had a combined net income of $42 million and a loss of $39 million in the 4th. So the performance package is probably being calculated on performance in those other years. Additionally, we don't know why they lost $39 million dollars this year. So I'm not saying that the CEO deserved the money, but I'm saying that people always accuse company's of cooking the books but gloss over the fact that most articles have very leading statistics being presented.
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- Anonymous Coward, 12 Mar 2012 @ 9:03pm
  
  Re: Everyone Plays Numbers Games
  Nope, that is just ridiculous, she should get a reward for each year and that is it, WTF is the golden parachutes nonsense?
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- Anonymous Coward, 13 Mar 2012 @ 6:58pm
  
  Re: Everyone Plays Numbers Games
  Perhaps that 24 million is part of the 39 million dollar loss?
  
  What sort of pestilence do you have to be to be worth paying 24 million to go away?
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Barney, 12 Mar 2012 @ 8:08pm

so net net, earnings would be ...
If the NYT made $3m over the last four years and they pay her an exit package of $23m ... doesn't that mean the NYT actually lost $20m over the last four years. Just sayin' ...
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- Chargone (profile), 13 Mar 2012 @ 12:57am
  
  Re: so net net, earnings would be ...
  depends on if that profit is before or after paying her, i guess.
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Al Bert (profile), 12 Mar 2012 @ 10:56pm

ire-warmed
Interesting story; can't wait to see what shakes from it, if anything. I like the idea that it's high-stakes blackmail. That prospect will surely keep me warm at night for weeks to come.
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Lee, 13 Mar 2012 @ 5:54am

Small fry compared to Chelsea FC
No matter the poor figures and extreme "exit package" of this issue it does fall short of other industries. With the influence of this position it makes sense to me to get rid.

If you want some insane figures look at what Chelsea Football Club (Soccer) paid to get and then get rid of their recent manager, I think in USD it's just over $75 million.
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