Question of the day
Thursday, Apr 23, 2009 - Posted by Rich Miller
* The setup…
While the Chicago Tribune laid off more than 10 percent of its news staff Wednesday, the paper’s corporate overlords sought bankruptcy court approval of a plan to pay $13 million in bonuses to top managers.
Tribune Co., operating under Chapter 11, said in court documents that the bonuses are essential for executives who provided “extraordinary contributions during an exceptionally difficult year” in 2008. They would be shared by 700 managers throughout the company, excluding its 10 top officers. […]
Relying on findings from compensation consultant Mercer (U.S.) Inc., Tribune said that even with the awards, the executives would be paid 41 percent less than their market competitors. […]
Meanwhile, newsroom employees at the media giant’s flagship had their own morale issues as managers conducted the biggest one-day purge since real estate entrepreneur Sam Zell took over the company. The layoffs are a response to declines in advertising revenue, a fate shared by media companies across the country.
A partial list of the doomed…
Business reporters Joshua Boak, Eric Benderoff and Susan Diesenhouse, and assistant editor Suzanne Cosgrove;
Breaking news reporter James P. Miller;
Photographers Candice C. Cusic, and David Trotman-Wilkins;
Assistant features editor and writer of the Tribune’s “Recession Diaries” blog Lou Carlozo; deputy editor Lilah Lohr, and reporter Robert K. Elder;
Schaumburg deputy bureau chief William Grady;
House and homes editor Elaine Matsushita;
Writer Elizabeth Botts;
Sports reporters John Mullin, Bob Sakamoto and Terry Bannon;
Sunday magazine editor Brenda Butler and reporters Jessica Reaves and Tom Hundley.
* The Question: Should Tribune Co. withdraw that bonus request? Explain fully, please.
- Bill - Thursday, Apr 23, 09 @ 7:58 am:
It is pretty wierd that Zell uses competitors Crain’s and Bloomberg to break the stories about his cutbacks instead of his own paper. Maybe he can’t find anyone left to write the story. So we read about the ST layoffs in the Trib and the Trib layoffs in the ST.
To the question, of course the bonuses should be withdrawn. As usual, the people who do the real work get screwed while the paper pusher bosses make out. The papers are in trouble because of their managers’ poor judgment and general incompetence not because of the employees’ performance. They are the ones who should bear the burden caused by their own mismanagement.
- Sewanee - Thursday, Apr 23, 09 @ 8:01 am:
No, not all bonuses are examples of “corporate greed run amok.” I don’t know the exact purpose, but I’d bet they hired that ‘compensation consultant’ to help justify the bonuses to the public. Too bad the consultant fee couldn’t have been used for a more legitimate purpose. Many times bonuses are simply part of the reasonably expected compensation for an employee. Perhaps contracts should be re-written to avoid being so dependent on bonuses.
- hmm - Thursday, Apr 23, 09 @ 8:07 am:
It is smart business to preserve your product at the expense of perks.
With these layoff examples, they are getting rid of a big chunk of their product, particularly the chunk people actually read.
It is just stupid.
- Joe - Thursday, Apr 23, 09 @ 8:10 am:
It seems a bit absurd to pay any kind of bonuses when also laying off people.
- Anon - Thursday, Apr 23, 09 @ 8:11 am:
It seems strange and unfair to give bonuses to some and pink slips to others, but when you’re in trouble and have to lay off employees, you have to take steps to make sure that the ones you need to retain don’t jump ship. And the ones that are most valuable to you tend to be the ones with the best chances of finding suitable employment elsewhere. I would need to know a lot more before second-guessing the award of these bonuses.
- Ghost - Thursday, Apr 23, 09 @ 8:21 am:
I have seen this argument throughout the bail out stuff. We need to pay these bonuses to be comptetitive etc…
Competitive with whom? Given the news market how many of these folks are really going to be hired away by higher paying papers? If so why the heck havent they left yet!!! I say no! I dispute this ideas that they are out the door. At this point, given the status of th paper, let them be hired away. Perhaps then they could poach some better managers. I would buy the pay argument if they said they were trying to poach exceptional people from other papers, and they needed to offer x incentive to get them in to try and save the paper. But I do not buy it otherwise for a bankrupt entity laying off staff.
- ChampaignDweller - Thursday, Apr 23, 09 @ 8:23 am:
I’m with Ghost–assuming these valuable people wanted to bail if they didn’t receive their bonuses, where would they go? The newspaper industry is bleeding money.
- sal-says - Thursday, Apr 23, 09 @ 8:33 am:
“extraordinary contributions during an exceptionally difficult year”
So, what would those ‘contributions’ be? Oh, right. Driving the Trib further into the ground? The ‘executives’ and ‘corporate overlords’ always seem to conveniently forget that wihthout reporters and staff, there IS no paper and NO reason to buy it, further deteriorating ad revenue. Ya gotta love ‘em.
- the Patriot - Thursday, Apr 23, 09 @ 8:35 am:
I guess the argument is the 10% of the people who got laid off did really bad jobs. How much per laid off employee does 13 million equal.
Here is where these nuts lose the arguement. Paying bonuses to remain competitive when the people you are paying have failed to be competitive.
Also, the lower level employees bonuses are based on the overall success of the company. Lets pay the top managers bonuses even though we are bankrupt, but not pay lower employees anyting because we had a bad year.
- Steve - Thursday, Apr 23, 09 @ 8:37 am:
They probably should to save money but that’s up to a bankruptcy judge to decide.This is an extremely specialized field of law.You can’t have a newspaper without reporters producing news.I’d say the reporters are the most important part of the paper.
- Carl Nyberg - Thursday, Apr 23, 09 @ 8:47 am:
People who are wealthy and powerful got that way because they are more talented and industrious than others.
Individual decisions made by these leaders may not pan out, but this is largely do to larger problems in the economy.
Just because the actual decisions didn’t get good results does not disprove that these people are truly more intelligent and more industrious than others.
It would undermine the capitalist system if corporate executives weren’t compensated at a much higher level than people do more routine stuff, like producing the actual product consumers buy from these companies.
Without leaders (intelligence and drive) and risk takers (with capital) the routine workers would have never had jobs in the first place. In fact, if you have a job in a corporation, you need to thank an executive that you and your children aren’t living in a hunter-gatherer society. Because without leaders, that’s where we’d be.
- JLP - Thursday, Apr 23, 09 @ 8:47 am:
Where I come from, bonuses are paid from profits. No profits = no bonuses.
- Deep South - Thursday, Apr 23, 09 @ 8:49 am:
No, in any media enterprise, probably in any business, the most important people are those who bring in the money. At the Trib, it would seem that these are the people who failed to do their job, yet they are getting the bonuses. I don’t fault the Trib execs for asking, hopefully a judge will see the the real issues and tell the execs to take a hike.
- Rob_N - Thursday, Apr 23, 09 @ 8:52 am:
The Sunday garden section was already whittled down next to nothing, and now Botts is gone? And that’s just one example.
Have gun, will shoot selves in foot.
–
Ditto JLP. No profits, no bonuses. At least out here in the real world, that is.
- fedup dem - Thursday, Apr 23, 09 @ 8:56 am:
The only bonus these bozos should be getting is the feeling of gratitude that they still have their worthless jobs. As for Mr. Zell, I would like to again remind his family that they will have to recite Kaddish for him for a full year after he finally passes on, rather than the customary eleven months for righteous people who die.
- VanillaMan - Thursday, Apr 23, 09 @ 9:15 am:
When a ship sinks, you don’t give the guys who sink it bonuses.
The morons at the Tribune are sending pink slips to the wrong guys. Who is losing millions, the photographers and reporters? No. The millions are being lost by the same people who are getting bonuses. Not only are they too stupid to keep the business they are responsible viable, they are too stupid to figure out that they are the reasons for it’s loses.
Any company that wants to take advantage of our laws to bail them out of their own poor business decisions are opening themselves up to criticism by the general public whose taxes pay for those laws. And when they violate common sense and decency as they are doing yesterday, they should be thrown out in the streets immediately before their stupidity causes more damage to the company.
- cynically anonymous - Thursday, Apr 23, 09 @ 9:24 am:
“People who are wealthy and powerful got that way because they are more talented and industrious than others.”
Or inherited their wealth because some relative was talented or industrious. Or got their power because they sucked up to the “right” politicians. In any organization, the people at the top tend to take all the credit and the people at the bottom are doing all the work. Public, private, it’s just the way things seem to work. Admittedly, I have no statistics at hand to demonstrate my thesis, but I suspect the author of the original statement doesn’t either.
- Irish - Thursday, Apr 23, 09 @ 9:28 am:
Carl - What? People who get powerful and rich usually had the ability to get a better education and have good contacts. Yes talent and being industrious have their place but do not say that if someone is not wealthy and powerful that they are not industrious. A lot of the wealthy and powerful were willing to give up parts of their life, family time, and willing to bow to the right people to get where they are. Others might have too much self respect to do that. It is all in what you believe represents success. To some of us it is not the almighty buck and belonging to the right club.
That being said, if they were so talented why are these discussions of bonuses centering around failed companies? As many have said it isn’t the guy on the line who made the wrong decision that cost these companies. It is the guy at the top. And why would you want to keep the people that drove your company into the ground? I say don’t pay the bonuses and let them go. If I am a headhunter with any sense I am not going to hire people who bailed out of a company after they left a company they guided into financial ruin. I am going to look for the guy who is leading a company that is still viable. He is the guy I want.
- South Side Mike - Thursday, Apr 23, 09 @ 9:28 am:
I think I see some of the problem with Mother Tribune: It has at least 700 managers! The Trib newsroom only has 430 people in it. I know that all of the Tribune conglomerate pieces all need managers, but please.
Tribune company was facing a difficult slide before Zell. But Zell’s pillaging of the company and outright robbery of the employees via a worthless ESOP changed the slow decline into an absolute cliff. They are in a death spiral, and I don’t know that they’ll be able to every right the ship at their current staffing level at the papers. I’m predicting a liquidation of at least half of the papers they operate, if not more.
I’m normally a pretty level-headed guy, but watching how Zell ransacked the Tribune Company just smacks me of being illegal. He never did put any real skin into this deal.
- Skeeter - Thursday, Apr 23, 09 @ 9:31 am:
It is impossible to answer without knowing the salaries. At a prior employer, my “bonus” was little more than deferred salary. I just got it every three months as a “bonus.”
That being said, about a month ago I canceled my subscription to the Tribune (I’ve had one as long as I can remember). The paper has become irrelevant. There is no real local news and even the sports section is now weak.
It is too bad. It used to be well worth reading.
- wordslinger - Thursday, Apr 23, 09 @ 9:32 am:
I don’t begrudge anyone making a buck, but this is crazy.
Like many, I have an emotional investment in the Tribune (not to mention a financial one from buying it every day since I was a kid). The Tribune is a shell of its former self. They’re casting off good people who make it worth looking at every day.
These managers are going to quit without their bonuses, in this economy? Give me a break.
I was on the road last weekend and picked up an early edition of the Sunday Trib on my way out of town. I got to my hotel, cracked a beer and pulled out my sports section. It was eight pages, half of it tire ads. IT DIDN’T HAVE THE PREVIOUS DAY’S BOX SCORES! Are you nuts? It’s the sports section!
I’m also saddened to see Bob Sakamoto let go. He owns high school sports coverage in Illinois, and covers the whole state, not just Chicago metro. Sako is enthusiastic, tireless, positive with the kids and wired from Antioch to Marion.
Given the money in big-time college sports, I imagine he’ll land on his feet as a recruiting consultant, as well as the owner/operator of his own Illinois sports website/blog.
- Pot calling kettle - Thursday, Apr 23, 09 @ 9:32 am:
I, too, thought that bonuses were incentives to perform well. If the company is tanking, bonuses should be foregone.
If an average employee costs the company $100K, then $13 million could be used to save 130 jobs.
Frankly, they would be better off cutting the execs loose and flattening the organization. The last people they need to lose are reporters and sales people. Losing the frontline folks cuts into the quality of the product.
- Third Generation Chicago Native - Thursday, Apr 23, 09 @ 9:44 am:
700 managers? Yes the Tribune should withdraw the bonus request.
You need people on the front line(reporters), and more of them, not less if you are ever going to get a good paper. Unless all those managers are going to get out there and get some good stories, breaking news, good coverage, it is a bad move.
- Plutocrat03 - Thursday, Apr 23, 09 @ 9:53 am:
Yes the bonus request should be withdrawn.
- Bonuses should be paid out of profits when there are profits, not to deepen the loss
- Who do they think the market competition is? Are they profitable? If they are profitable, then they can afford to pay better salaries. As far as I can tell, the recruiting market for newspaper professionals is pretty heavy with talent. The remaining managers should be thankful they were not on the discard pile themselves.
The ratio of managers to front line reporters needs to be improved. There seems to be too large a number of people who are collecting salaries, but not covering the news.
- RobRoy - Thursday, Apr 23, 09 @ 10:01 am:
They have GOT to be kidding! Bonuses for the management while laying off workers. Let’s scan the ed pages to see what they have said in the past about other corps doing this. It’s wrong. Because it reinforces the notion that only the working stiffs are being made/asked to sacrifice.
- Amy - Thursday, Apr 23, 09 @ 10:10 am:
bonuses for management, quite unseemly in the face of the loss of very familiar and much loved writers. Melissa Isaacson gone from the sports pages, a sad loss of a local high school basketball star who made it to great local sports coverage. and Beth Botts gone, a great source of information on gardening techniques and events. why should i continue to take this paper?
- Concerned Observer - Thursday, Apr 23, 09 @ 10:11 am:
Agree with word re: Sakamoto. I was lamenting that to my wife and co-workers today.
We don’t know if they’re legally required to pay these bonuses or not, but IF not, then this is a terrible decision. Just one in a giant series of bad decisions.
- whizbang - Thursday, Apr 23, 09 @ 10:27 am:
As a corporate refugee who now works for himself. Thanks Enron. This may sound like sour grapes. And maybe it is. Let them keep the bonuses. We all know in a corp after a certain grade level all that matters is what you earn. SO they are just doing what is natural. GREED WINS! It is the system. Yeah I know you are supposed to worry about customers and shareholders and employees. And I also have a Tomb for sale in Oak Ridge Cemetery. Nice one owner.
- paddyrollingstone - Thursday, Apr 23, 09 @ 10:30 am:
Saw Bill Moyers interview “the Wire” creator David Simon the other day. He took a buyout from the Tribune Co.in 1995 when he was working in Baltimore. That was the 3rd round of reporter buyouts by the Tribune Co. Simon said that Tribune records in the Bankruptcy case indicate that the Trib Co had a 37 percent profit margin that year. The Trib Co is real scum.
- wordslinger - Thursday, Apr 23, 09 @ 10:51 am:
Amy, I hadn’t seen that on Melissa as well. What’s the game plan here, casting off your best people?
Cub fans, Melissa Isaacson has a book out, “Sweet Lou: Lou Pinella, A Life in Baseball.” I haven’t read it yet, but she’s a great reporter and writer.
- Amy - Thursday, Apr 23, 09 @ 11:07 am:
heard about Melissa via another reporter. maybe it’s not correct. i hope that i’m wrong. she’s really great.
anyone see Jay Marriotti on tv boasting that he will soon be back in Chicago?
- Amy - Thursday, Apr 23, 09 @ 11:08 am:
back in Chicago as in writing for newspaper. i know he’s still here. why is he on around the horn? he’s so annoying.
- wordslinger - Thursday, Apr 23, 09 @ 11:10 am:
Amy, Melissa is mentioned in the Crain’s article to the right.
- lincolnlover - Thursday, Apr 23, 09 @ 11:11 am:
Shameful. Makes me glad I cancelled my subscription.
- Amy - Thursday, Apr 23, 09 @ 11:19 am:
thanks for pointing out the Crains thing, Wordslinger. horrible news. i’m a Sox fan, but Melissa did a nice job with the Pinella book and her reporting is consistently good. wonder if we can construct an org chart of the Trib and point out managers who should really go. Also, are they getting rid of reporters close to retirement age, or nearing vetting? another friend was let go some months ago and I think she had not reached vetting time with them. The Trib is not a union shop, but this is a legal issue. hope those let go are comparing notes.
- Trib spouse - Thursday, Apr 23, 09 @ 11:38 am:
Amy-
They were across the board - some had 20 years in and are now wondering how they’re going to send their kids to college and pay the mortgage. Others are 20 and 30-somethings who caught the bad end of the ax. No rhyme or reason and it would seem that most editors were not consulted.
- zatoichi - Thursday, Apr 23, 09 @ 11:43 am:
No profit = no bonus. As others have said, where are the managers going to go if they leave because there was no bonus? There seems to be quite a few talented news people in the market right now from other parts of the country. I grew up with the Trib and have found it wherever I went around the country. In the last year I have caught a couple of Sunday editions at best. Sad change. Spend money like this for bonuses and the future looks dim.
- just sayin - Thursday, Apr 23, 09 @ 11:44 am:
Obviously no one at the Trib deserves a bonus.
I can’t remember the last time I paid to buy the Trib, and I can’t see that changing.
Even Kass has dumbed down his column.
The Trib now makes USA Today look like Tolstoy.
- Tim - Thursday, Apr 23, 09 @ 11:44 am:
The bonus request should be withdrawn.
I agree with what’s been said above: no profits, no bonuses. We don’t know if the bonuses are a contractual obligation, but if other companies can weasel out of union contracts while in bankruptcy, why can’t the Trib find a way to cancel the bonuses?
I’m disappointed to hear that Bob Sakamoto has been shown the door. I was already down to Sunday-only service, but I just called the Trib and cancelled.
- susie - Thursday, Apr 23, 09 @ 12:10 pm:
as someone who was recently laid off, it was quite a self esteem killer when the same day the layoffs were announced, job postings went up for 2 jobs in the same area where I was being laid off. I say NO WAY these bonuses should be paid. the reporters and photographers are the ones who make a newspaper what it is. I love newspapers, but there is little point of reading a newspaper if all of the “news” is syndicated stuff that isn’t local.
- SpfldJimbo - Thursday, Apr 23, 09 @ 12:19 pm:
The Big Bosses getting slary boosts at the Trib, makes about as much sense as members of Congress and State Legislative Leaders getting re-elected.
Dumb…but it’ll probably happen.
- Amy - Thursday, Apr 23, 09 @ 12:35 pm:
Trib Spouse: thanks for sharing the info. hope you are doing well.
- Concerned Observer - Thursday, Apr 23, 09 @ 12:42 pm:
Trib spouse: You hit on something that A) I’ve also heard, and B) I thoroughly despise.
You mentioned that editors were not consulted. I heard of at least one situation where the head-of-department got a phone call saying “fire X,Y,Z by the end of the day”. No chance for that head-of-department to say “but I need .”
I can not stand this type of management. It happened at my place of business too when we had layoffs, although fortunately the bosses were notified of the layoffs a day ahead of time and were able to argue for at least one or two jobs.
What the hell is the point of having middle management if you’re not going to consult them on something like this?
- Bill - Thursday, Apr 23, 09 @ 12:49 pm:
===#
==What the hell is the point of having middle management if you’re not going to consult them on something like this?==
Exactly my point. Get rid of them and spend precious resources on the people that do the work and actually produce something besides red tape.
- North of I-80 - Thursday, Apr 23, 09 @ 1:00 pm:
What business is it that anyone is poking their noses into this? It’s a corporation that has stock holders, bond holders and creditors. Speculating on this is on the same level as voicing your concern over how much the Bears’ rt tackle or 3rd defenseive assistant coach is paid. Bankruptcy court will rule on this and unless you are getting axed, spared or hold bonds/equity from the company, why would you care?
- Shore - Thursday, Apr 23, 09 @ 1:05 pm:
Sakamoto was a really good high school reporter and did a nice job on the cltv program. Also one of the very few Asian-Americans you see in the papers these days so a big loss. I hope one of the growing websites-rivals.com or something like that picks him up.
- wordslinger - Thursday, Apr 23, 09 @ 1:08 pm:
North, the Trib Co. doesn’t make widgets.
They have been during my lifetime the most powerful media company in Illinois, with great influence over government, politics and culture. Their management effects my world.
Tribune properties have been a part of millions of lives from the first time they tuned in Ray Rayner on WGN to the final writeups on the obit page.
I’m a daily purchaser. Plus, many of us have friends there.
And by the way, it galls me to no end that the Bears drafted Chris Williams with the first pick last year and he couldn’t play a lick.
See, it’s not all dollars and cents. There are emotional attachments as well.
- Amy - Thursday, Apr 23, 09 @ 1:20 pm:
North of I-80….it’s our business because we buy the product. we need news organizations to look at all sorts of things, and when they ax reporters whose work is good, it’s an issue. besides, we may not know the writers, but the relationship is personal….we love their work.
- Yellow Dog Democrat - Thursday, Apr 23, 09 @ 1:24 pm:
Average bonus: $18,571.43
If any of these 700 managers actually did anything worth $20K, great: give them a raise and tell them to keep up the great work.
But otherwise, these bonuses are demoralizing for the entire enterprise.
The $13M which be much better invested in the Tribune’s internet presence, where the real advertising growth potential lies.
$13M buys alot of bloggers - one for every Chicago neighborhood and suburb @ $40K, with about $6M left over.
- Concerned Observer - Thursday, Apr 23, 09 @ 2:43 pm:
YDD stole my idea re: bloggers. I’d been preaching that one for a couple of months.
- Truthful James - Thursday, Apr 23, 09 @ 2:47 pm:
Looks like they think they can do H.S. sports with stringers and part timers. “Socko” Sakamoto was a great asset. I didn’t know that other people noticed.
Sam Zell must be sweating bullets. I see that the Cubs buyers are looking for new investors to join them. They should have picked Mark Cuban who does have the do-re-mi.
The Trib has lowered the paper quality, anybody notice that?
- Judgment Day Is On The Way - Thursday, Apr 23, 09 @ 2:48 pm:
In fairness, as I read the article, a fair portion of these bonuses may be going to people who work for Tribune Company, but are not part of the Newspaper area. Some of these other areas are profitable (Cubs, WGN radio and WGN TV, other broadcast media stations).
Those execs in those areas probably do deserve bonuses, especially if they are profit making sectors of the Tribune Company.
Fwiw, the NYT Corporation just also paid out rather hefty bonuses to some of their executives. So in the media industry, it’s not just the Tribune Corp. doing this.
- Jake from Bellwood - Thursday, Apr 23, 09 @ 4:24 pm:
I have no opinion on the bonuses…I will leave that for the capitalists to determine.
But there are some talented writers on the cut list. It looks like Sam Zell’s group is doing what Blago wanted all along. He is bringing down the entire newspaper, not just selected op/ed folks. Maybe things will improve when he sheds the company of the Cubs.
- Suzanne - Thursday, Apr 23, 09 @ 7:09 pm:
Unconscionable. If remaining Trib employees who are slated for bonuses are, in fact, paid 40 percent less than some conceived competitor, than good golly molly, they should go get that bigger paycheck. This is just more dumb, AIG-inspired, PR-impaired math.