At Gannett, easing the way for Dubow…

October 12, 2011

Gannett (GCI) Chairman and Chief Executive Craig A. Dubow stepped down on October 6, citing health problems, a couple years after back surgery and a related leave of absence. The 8-K Gannett issued filed at 5:01 p.m. on Friday is, like its flagship USA Today newspaper, a model of brevity; unfortunately, it’s considerably less informative, at least if you’re looking for information about Dubow’s exit package.

The filing says nothing about the compensation for his replacements, new CEO Gracia C. Martore and Chairman Marjorie Magner, and notes laconically that Dubow “will receive the benefits and payments which become payable in connection with a termination of his employment related to a disability, in accordance with his [2007] employment agreement” — as modified by two amendments since then. No detail on the actual amounts.

Gannett is something of a frequent flyer here — in February, we footnoted the souped-up health-care plan that gives executives as much as $750,000 on top of regular medical benefits, and in March 2010 we observed that Dubow’s rewards for simply walking away had risen dramatically. So we decided to take a close look at what Dubow is likely to get as he steps down — and, as others have mentioned (including Gannett Blog and Daily Kos), it’s eye-opening, and a sharp contrast to the layoffs and stock-market losses that have marked Dubow’s tenure. (Update: Peter Lewis does a beautiful, if sad, job of dissecting Dubow’s tenure at his blog.)

But it’s in the fine print — where the perks and extras are laid out — that Gannett’s largesse really stands out.

The most recent proxy, filed in late March, indicates that Dubow would have gotten $37.1 million in cash and benefits if he had left on disability in December of last year: a $13 million pension , $6 million in cashed-out stock options, $5.3 million in cashed-out restricted stock, monthly disability benefits for life worth about $6.9 million today, and another $5.9 million lump-sum cash payment for “additional disability benefits.”

But that doesn’t include a host of perks and benefits laid out in two dense footnotes, some of which continue indefinitely: company-paid legal and financial-counseling services for three years (estimated tab: $75,000), unspecified “supplemental medical insurance coverage for the executive and his or her family,” company-paid Medicare Part B premiums and supplemental coverage for life after age 65, a life-insurance policy of at least $350,000 face value that Gannett will pay for until Dubow turns 65, and as much as $75,000 over five years in Gannett-paid (but Dubow-directed) charitable contributions.

Dubow also can keep his company-issue home-office equipment and gets three years of free tech support, plus an office and secretarial assistance “and access to Company facilities at no charge for three years.” He can also use the company plane for three years “at times not inconveniencing the Company,” but has to pay an hourly rate for the privilege. At least there’s no lifetime consulting agreement and golf-club membership, like the one Michelle footnoted at Gannett back in 2004.

We wouldn’t wish medical problems or disability on anyone, and presumably Dubow would have been happy to stay if he could have. He’s run the company since 2005, and was just re-elected to a one-year term in the spring. Still, Gannett has made it a lot easier for him to go from a financial standpoint.

In an article in the Washington Post, Martore welcomed her new position as permanent CEO (she has previously served as interim CEO during Dubow’s leaves of absence) and is quoted as saying that “out of great challenges come great opportunities.—¯From the context it’s clear that she was talking about the newspaper business, but she might just as well have been talking about Dubow’s exit.

Image source: penywise via morgueFile

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