Former NYT CEO paid $23.7M exit package; company netted $3M over the past 4 years

Outgoing New York Times CEO Janet Robinson received an exit package worth $23.7 million after presiding over an eight year tenure that saw the company's share price fall by 80 percent. The company's net earnings over the past four years were $3 million. In addition to her exit package, Robinson earned a $1 million annual salary. Edmund Lee for Bloomberg News:

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.
Robinson’s exit, which costs Times Co. more than the company earned in the past four years, marks an end to a period during which the publisher’s sales and earnings slumped amid intensifying online competition. Times Co. (NYT) stock plunged more than 80 percent during Robinson’s tenure as CEO, which began in December 2004.
The departure of Robinson, 61, also leaves a leadership vacuum at Times Co., publisher of the namesake newspaper. The company, based in New York, faces falling print-advertising revenue, profit squeezed by pension costs, and pressure from members of the Ochs-Sulzberger family to restore a dividend once worth more than $20 million annually.

New York Times CEO Robinson’s Exit Compensation Package Tops $23 Million [Bloomberg News via Tech Dirt]

(Image: The New York Times building (new style), a Creative Commons Attribution (2.0) image from scobleizer's photostream)

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ciacontra

Seems fair
awjt

So what. They suck. Let ‘em bleed dry.
autark

I am confident that my complete lack of experience in the publishing industry would make me a qualified candidate to drive the company even further into the ground than an industry veteran. Surely such abject failure would be deserving of an even bigger exit package.

I don’t even need to do this job for 8 years. I’d be happy to give it a go just for 1.

Where do I submit my application?
- travtastic
  
  Resumes are accepted by telegram between 1pm and 3pm.
lknope

It’s a good thing we haven’t rolled back the Bush tax cuts either, we wouldn’t want to punish this “Job Creator.”
GawainLavers

Well, if you can’t properly reward talent, how do you expect to be as successful as the NYT?
http://twitter.com/mtmole Mr. Mole

Is this what they call a contract killing?
Spinkter

I don’t know why everyone tries to make a big deal out what appears to be just the terms of an employment contract. It’s not all that uncommon for employment contracts to specify a minimum amount of cash remuneration over a set period of time.

I would guess that her contract stipulated that should would be paid something in excess of $30M over eight years. I would further guess that the contract lacked company performance requirements. And since contracts are legally binding, the NYT had to pay her the money. End of story. Nothing to see here.

This is the same deal that’s going on in the financial sector. What appears to be overpaid mindless drone execs is really mindless drone execs with really good, legally binding, employment contracts.

Here’s the thing: anybody can do this. It’s all about negotiation.
- http://rhinocrisy.org/ saurabh
  
  Here’s the thing: nobody needs that much money.
  - Ito Kagehisa
    
    Well, sure we do! It’s expensive to build an army of brainwashing robots to take over the world. And the cost of genetically engineered super-hookers is staggering.
    
    What, you don’t want those things? You aren’t a corporate CEO, then. Not in your heart. You don’t really matter at all.
- autark
  
  how does a publicly traded sign a contract like this with an exec without being taken to the cleaners by investors?
- joeposts
  
  Maybe because defenders of capitalism constantly remind us that high executive pay merely reflects the high-risk decisions that can make or break executive careers.
  
  But no matter what – success or failure – they’re generously rewarded with packages that are worth many times what their employees could make in a lifetime.
  
  To us uncultured proles, it sorta looks like capitalism = rewarding the rich, all the time, even if they are lousy businesspeople.
  
  Sure it’s a contract, but the problem is the whole friggin’ system, man.
  
  Here’s the thing: anybody can do this. It’s all about negotiation.
  
  Yes, if you are a wealthy, important CEO, you can probably wring a lot of money out of the company you’re running. Thanks captain obvious! We Salute You.
  - Spinkter
    
    Sheesh. I’m not a wealthy, important CEO, but I am in an employment contract (for much, much less than $30M, FWIW). I negotiated with my employer for what I thought I was worth, and they accepted.
    
    It’s way better than them trying to tell me how much my time is worth.
    - wysinwyg
      
      Employment contracts could easily peg rewards to performance. The fact that the contracts for corporate executives routinely don’t is what’s frustrating about this. What is hard to understand about that?
      - Spinkter
        
        Yes, it is frustrating. Ridiculous, even. But there’s not much a third party can do about a contract between two unrelated parties, especially since there is no requirement to make public the terms of a private contract.
        
        If an employer decides to enter into a stupid contract that doesn’t protect the company’s interests (which appears to definitely be the case in the contract between the NYT and Robinson), then it’s up to the company’s owners to rectify the problem.
        
        That owners don’t do something to fix this situation is the real problem. There’s a lot of brother-in-lawing going on at the executive level. But we (as unrelated third parties) are back to the problem of not being able to do much about it.
    - PaulDavisTheFirst
      
      I don’t think you understand. You negotiated what you thought you were worth. You didn’t negotiate what you thought you could squeeze out of them, and I would wager that should your performance fall far, far short of the value proposition you offered the company, you will be out of a job with no golden parachute.
      - Spinkter
        
        In my case, my employers were pretty good at protecting their interests. Had we not come to an agreement, they would have simply rejected the terms. And, yes, there are performance points in my contract that are very specifically spelled out.
        
        But that’s the point, isn’t it? The terms are spelled in the contract, and those terms are binding. It appears as though the NYT’s contract with Robinson’s didn’t tie her pay to any measure of company performance. Why this is so is anybody’s guess, but it’s the NYT that should be taken to task for negotiating a stupid contract, not Robinson.
    - travtastic
      
      Did you promise to ruin the company, and ruin it harder the more they pay you?
- JProffitt71
  
  And since this is technically legal and technically abusable by anyone it is completely irrelevant to the epidemic of fuck all “I’ve got mine” capitalism, and should not be examined, much less addressed.
- atimoshenko
  
  The fact that such contracts are commonplace at the top end of the labour market (while being non-existent in all other circumstances) is evidence of significant and pervasive market distortions.
  
  The argument that the remuneration committee would make, I am sure, is that it would be impossible to attract anyone with prior experience similar to Ms Robinson’s for significantly less money. What the facts demonstrate, however, is that people with prior experience similar to Ms Robinson’s are not much better than any other randomly selected person at leading large companies.
  
  This dynamic is known to economists – if you are in one of a small amount of positions for which there is significant competition but which, once attained, provide a significant revenue stream independent of one’s efforts, competencies, or performance, you are a rentier.
- xian
  
  Here’s the thing: anybody can do this. It’s all about negotiation.
  
  Hear that have-soons? Get to negotiating, that’s all it takes! I’m going to go specify a minimum cash remuneration of $30mil on my Whole Foods application… wish me luck.
  - Spinkter
    
    Hope you’re a good negotiator! Best of luck!
- PaulDavisTheFirst
  
  No, not anybody can do this. This sort of “deal” is possible only within the context of the extreme asymmetry of senior management hiring, in which company boards, for whatever reason, find themselves compelled to overrule common sense, foreign examples, historical examples and the advice of many uninvolved observers and capitulate to the insane demands of candidates who will almost never bring value to the company that is even close to their compensation.
  
  You cannot negotiate a deal like that at the jobs occupied by the 99%.
  - MichaelZWilliamson
    
    I’d like to point out that in surveys taken during the protests, between half and a majority of “the 99%” supported bailouts for failed corporations.
    
    This is why no one in any segment of the argument takes the Occupussies seriously.
    - Ito Kagehisa
      
      I just spent a few minutes on Google and all the surveys I found say you are a bare-faced liar. But that’s just google, not me… I myself anxiously await your publication of your sources.
- ocker3
  
  Nope.
  
  “performance awards of $5.39 million”
  
  there Were performance awards, their design obviously sucked.
- Petzl
  
  It’s not all negotiation skillz. It’s also about cronyism. Who gives the CEOs sweetheart contracts? The board. Who comprises the board? Present and former CEOs.
- rabb046
  
  Anybody can do this.
  I assume you have, right?
crnk

Stock price may show general health of a company’s finances, but I don’t think it should be used as a barometer of a company’s success. Plenty of stocks are undervalued, and a large number are also overvalued. Ever wonder how AIG can lose 50% in a day? It is a black swan event–we all saw the value after the fact, but were blind to the true value before because ‘it couldn’t happen’
- ChicagoD
  
  But stock price isn’t even a very good gauge of a company’s finances. At best it is a gauge of the betting regarding the future stock price.
- l337n00b
  
  I don’t think the stock price is the important thing – I think it’s more than they are paying her approximately 8 times the net profit they made in the last 4 years. So now, instead of making 3M over the last four years they have lost 20.7M.
  - crnk
    
    Then why bring up the stock price at all? That was the [unstated] gist of my point. The article cites the stock price as ‘evidence’ of her failures.
    - wysinwyg
      
      So you’re saying that stock prices are not the least bit correlated with a company’s performance? Because that’s all it takes to use stock price as evidence. And if you think stock isn’t even remotely correlated to a company’s financial health I don’t know how to help you.
      - MichaelZWilliamson
        
        http://www.forbes.com/sites/stevedenning/2011/11/28/maximizing-shareholder-value-the-dumbest-idea-in-the-world/ Maybe Forbes can help you.
      - donovan acree
        
        Absolutely! Stocks are clearly a good indicator of a companies actual performance and value. Just ask Enron, Global Crossing, et al. Stocks aren’t simply the value the public places on a company. They are clearly the same as having a healthy net.
Layne

Ahhh – good old NYT mentality. I worked for them briefly, years ago, and they were as moronic then as they seem to be now. They fired a ton of staff but went ahead and built a huge new office building (enviro-certified! star-architect-designed!), in a move similar to the fiasco that is their current NYC headquarters.

Who to loathe more in these cases: The CEO hucksters themselves, whose only real talent is engineering gold plated, budget-eviscerating plush rewards packages for their inevitable exit? Or the boardroom dolts who agree to hiring these blank-minded charlatans as they jump from one company-destroying gig to another?

Every “evil CEO profiteer” editorial they’ve run in the past decade should be wrapped around fresh dog squats, placed on their headquarter doorstep and set aflame.
rpd4

And there’s some irony in that the RSUs and options she received will increase in value if the company’s value that tanked with her at the helm recovers after her departure.
sdmikev

sickening. truly. she didn’t earn this. unless by earn, we mean doing nothing at best.
Teller

I guess we can assume that a male CEO would’ve gotten $27 mil?
abstracht

pointing out that the company only made $3 million does not in and of itself suggest that the $27 million was too high, because in theory, the company might have lost say $100 million dollars had it not been for the shrewd management. in such a case, the $27 million dollars (minus baseline) could have been well worth it. same logical mistake was made often when discussing compensation in the financial industry over the past few years.
- travtastic
  
  Oh. Totally.
- Diogenes
  
  Gwarsh, you’re right! What were they thinking only giving her $27 million? The poor thing was underpaid!
- acidrain69
  
  Nice misdirection. How can you prove that would have happened when it didn’t? She could have single handedly repelled an alien invasion that never happened, thus saving the Times and everyone on earth. It doesn’t mean she earned more money than the company earned for the time period.
- rabb046
  
  Interesting concept. CEO’s are overpaid because if the weren’t their companies could have lost even MORE money. Sounds good on a resume, doesn’t it.
travtastic

You know, this actually explains a lot.

I can’t wait to one day tell stories about this kind of thing to my grandkids. “Well, you see, it used to be super legal to steal money. What? Oh, they were made out of ground-up dead trees. You read them.”
twianto

1. That contract was signed before she got the job, right? How can you blame anyone here?
2. Most of it is in stock options, not cash, meaning that sum is pure theory right now.
3. She could still have been a competent CEO; you have to ask if the NYT would be profitable at all with a less competent CEO given the current climate with newspapers failing left and right. The NYT has one of the best news websites, above and beyond the competition. Looks like a good strategy to me.

Or not, who knows.
- BarBarSeven
  
  Have you actually read the New York Times recently? The amount of errors and outright bizarre staff writing is really out of step with it’s history. It’s not gotten as bad as the tabloids, but for a publication that self-declares itself as a ‘paper of record,’ it’s quite embarassing.
  - twianto
    
    Better than the local paper where I’m from ;-)
    
    They are still one of the better dailies in terms of quality and quantity. Also, they have to actually earn all their money themselves, unlike some Murdoch papers or The Guardian (which is and always has been cross-subsidized by tabloids within the Guardian Media Group).
    
    I say bravo (brava, really) for keeping a good paper profitable.
    - MichaelZWilliamson
      
      No, it’s not a good paper, and I suspect if you read articles on subjects you’re familiar with, you’ll agree. They’re incapable of getting basic facts correct, and haven’t been a relevant source of news in at least two decades.
- http://pulse.yahoo.com/_BOOM27DBLMZQIJVK4BQLE7K5YA Nagurski
  
  2. It looks like around $1.7M is stock options, which is pretty far from ‘most’ of the package.
  3. How is the NYT profitable if they’re averaging less than $1M per year and paying her around $3M a year?
  1. Oh, I can blame people, baby. Promising the moon to the head of the company without having that represent some fraction of wealth generated for the company is stupid. The Times had several bad hiccups trying to roll out a profitable web based model during her tenure. Money promised and paid to her represents money that couldn’t be spent paying people who could actually help the business innovate and adapt more quickly to changing patterns of news and entertainment consumption. If chief executive types are such brilliant visionaries and business people that they deserve such rich pay, they ought to be confident enough to be paid entirely in stock and options, so they sink or rise with the company.
jimh

“The company, based in New York…”
…has announced, as part of a package deal, its imminent relocation to Buford, WY.
http://www.theblacklaser.net/ Joe The Wizard

Man, I could really use 23.7M right now.
pjcamp

Well, if you didn’t pay them like that, how would you hire the best?
- Gatto
  
  I think hiring the merely adequate and paying the people on the line better, or even returning profit to investors, would be better for these companies over all. There are others above who make this point better than me, but i suspect there are good people who could do this job for 300k a year, and would be happy doing it.
  
  Instead, there is a mentality at work that believes “more is better”. Just like when people buy name-brand products that are more expensive with the exact same ingredients as the generics. Or, “priming” scenarios when people are told a product costs more, and they wind up more satisfied then when they are told the same product costs less. If there’s a provable correlation between excessive CEO pay, and actual profits — I’d love to see it.
  - pjcamp
    
    I guess I should put sarcasm tags around things I write. This CEO was clearly not the best but was paid as if.
    - Teller
      
      No. It was obvious how you meant it.
MichaelZWilliamson

http://www.forbes.com/sites/stevedenning/2011/11/28/maximizing-shareholder-value-the-dumbest-idea-in-the-world/ as posted above, this comes into play. There’s more concern over stock value than actual accomplishment or profitability.
donovan acree

This is clear evidence that the Times has no idea how to run a business and are already on the way out.
Matt Volatile

How can someone get a “performance bonus” that pays nearly double the earnings of the entire company? Who writes these insane contracts?