Brother Can You Spare $10,000,000

I used to read the New York Times business section most days back when I actually read papers in print. I still occasionally do and happened to grab that section from last Monday's paper this morning. In it were two interesting articles  that both serve as apt exemplars of where we stand today. The first, "Why Not Occupy Newsrooms?", detailed the long discussed decline of the newspaper business from a slightly different light, exploring the outrageous bonuses the executives at the companies are getting as they drive the business into the ground. 

The main example they provide is Gannett CEO Craig Dubow who ushered the company from a stock price of $75 to $10 in six years, reduced the workforce from 52,000 to 32,000 and thus seriously reducing the quality of the 82 newspapers they own. So he resigned having essentially failed at his job -- to keep the company profitable and its stock price up. What did the board do? Well they offered him plaudits for having "championed our consumers and their ever-changing needs for news and information." Hmm, why bother with sour grapes when someone leaves, I guess. But there weren't just kind words. There was a $37.1 million package including retirement, health and disability benefits. And this comes on top of the $16 million in compensation for just the past two years. So let's quickly run those numbers, 20,000 people lose their jobs, those who own the stock lose as much as 86.7% of their money and the CEO receives compensation of $53.1 million in just two years. 

Sounds fair right? I mean CEOs shouldn't be judged by the bottom line, should they? They shouldn't be judged by saving jobs obviously? Or the stock price? The profitability? No, not that either. Well, then obviously they are judged by ... hmm, there is no obvious. And this isn't an isolated situation today. The same has happened across the economy for years. CEOs and top executives do a bad job, screwing their workers, stock holders and sometimes their customers as well, but leave with tons on money in their pockets. To go back to the numbers, that salary that went to the CEO could have kept 1,000 of those employees at $50,000 a person. While that's only 5% of those who lost their jobs, wouldn't it make more sense than a golden parachute for a guy who clearly wasn't good at his job. It's yet another example of my contention that we live in a world where the relationship between quality and success has become wider and wider, and in fact one could argue today that there is no relationship anymore. Exhibit A is probably George Bush, but we could really go on endlessly from pop music to the fine arts to movies to our politicians and of course business leaders. As just one other example is the coverage of Steve Job's death, which while as tragic as any other death, ignored the fact that he has been gouging consumers with overly inflated prices and the shortest planned obsolescence schedule of any company in history.

Back to the newspaper business. The Gannett story is not unique as one can look at the equally troubling case of The Tribune Company, who runs among other papers the Chicago Tribune, Baltimore Sun and Los Angeles Times. The steep cuts in staff at all of these papers have been well-reported and total over 4,000. So the management of course took pay cuts? Um, actually they will receive over $115 in bonuses over the next three years. This is the level of insanity that prevails today. But it is important to note that in this case it relates in essential ways to the very problem, with the decline in news coverage arguably heavily influenced by the large corporations that now control so much of it. That they are failing in their jobs in some cases and succeeding in others simply shows that the bottom line (whether good or bad) has completely supplanted the idea of the media serving as the fourth estate, instead seemingly serving to buy the fourth or fifth estate for its executives, who one can assume are really not that interested in stirring the masses to actually revolt against this revolting state of affairs.