August 10, 2007
Gannett Changes Pay Rule in Case of Sale
By THE ASSOCIATED PRESS
NEW YORK (AP) -- Gannett Co. Inc., the nation's largest newspaper publisher, changed agreements with its top two executives that would accelerate payment of retirement and deferred compensation if the company is sold, according to a regulatory filing.
The company also changed the threshold at which an employee buyout constitutes a change in control that would trigger the executive payments. A spokeswoman for the company said she could not immediately confirm whether the change involved lifting the threshold.
Gannet said it made the change to comply with tax codes and the move did not indicate it was entertaining any offers.
''These were routine amendments and were not made in anticipation of a sale,'' said Gannett spokeswoman Tara Connell. ''Nothing is in the works. We were mandated to make these changes by the IRS.''
The newspaper industry has been in turmoil for the past year, as several prominent -- and previously thought to be untouchable -- properties have changed hands. The sector has struggled with a persistent decline in revenue as advertisers shift spending online.
Most recently media tycoon Rupert Murdoch's News Corp. prevailed in a monthslong courtship of Dow Jones & Co., the family controlled publisher of The Wall Street Journal. Knight Ridder Inc. was sold last year and Tribune Co., publisher of the Los Angeles Times, got bought a few months ago.
Gannett, based in McLean, Va., consistently delivers double-digit profit margins and is considered well run. With a market capitalization of about $11 billion, the company would constitute a large purchase, especially in a market where debt financing is difficult to come by.
Gannett shares fell $1.01, or 2.1 percent, to $46.33 in midday trading. In the past year, the stock has ranged from $45.96 to $63.50.
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1 comment:
So the day I posted this story, everyone who works for Gannett received the following e-mail:
From: A message from Craig Dubow fromCraig@gannett.com
Date: Fri, 10 Aug 2007 11:37:16 -0400
Conversation: Unwarranted speculation
Subject: Unwarranted speculation
Dear co-workers: I want to put an end to the unwarranted speculation generated by a few bloggers this week. A change in control of Gannett is not in the works or even anticipated. This handful of bloggers made some incorrect assumptions about information in our quarterly filing with the Securities and Exchange Commission. None of the bloggers called and checked with us before speculating that we were preparing for a sale. We are not. What we were doing is making routine amendments to our bylaws and compensation plans. Many of these revisions were mandated by newly adopted IRS rules about deferred compensation. The word "amendment" is important here. We updated plans that already were in effect. Actually, our plan for dealing with a change of control has been in place since 1990. It's been amended on occasion before and reported on over the years. So, stand down. Relax. Gannett - along with the media industry - is facing some tough times but we are actively and aggressively moving forward with our strategic plan. We are seeing success and creating more of it everyday. Come fall, we will have some interesting new approaches to innovation to tell you about. And there are lots of good things happening throughout the company, even though it may feel like a rough ride at the moment. As you know, I am very proud of you and all you are doing to make this transformation happen. Gannett needs you, and appreciates you. Thanks, and please keep in touch. Craig
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