Pay cut for newspaper publishers?

Should the higher ups (publishers or editors or other news executives) in the newspaper business take a pay cut for the sake of helping their underling employees? That's a question I explored in a story I wrote and which was published today on the Web site of the S.C. Press Association.

Here's my story:

By Larry Timbs
Special to the S.C. Press Association

Should owners, publishers or other executives at community newspapers cut their own pay to save jobs or reduce layoffs at their enterprises?

It’s a question that might be making the rounds of management and the rank and file at America’s community newspapers given a recent request by Newspaper Guild 39521 to Gary Pruitt, chairman of the board, president and CEO of the McClatchy Company.

Citing the challenging era the newspaper industry in general, and McClatchy in particular, now finds itself in, the Guild asked that Pruitt agree to reduce his full compensation for 2009 to $500,000, “the amount,” according to the Guild’s letter to Pruitt, “of executive pay the president of the United States has suggested he believes is appropriate in dire circumstances.”

Posted on Feb. 16, 2009, at BeeGuildNow.org, the Guild’s letter mentioned a succession of gloomy facts: the freezing of Guild salaries and pensions; the elimination of the McClatchy Company’s match for employee 401K plans; painful layoffs coming during the “worst economic climate in 80 years”; McClatchy company requests that Guild members absorb additional voluntary pay cuts; and the certainty that all Guild members will be furloughed in 2009.

The Guild’s letter acknowledged that Pruitt relinquished one of his two pension accounts but it asked that he cut his full compensation for 2009 to $500,000 “to save jobs” at McClatchy.

Whether he was responding to the Guild’s request or just feeling a bit guilty after seeing McClatchy trim 1,600 jobs (15 percent of its workforce throughout the United States), Pruitt recently took a 15 percent pay cut.

That’s a start but it’s not nearly enough, according to Leroy Towns, faculty member in the School of Journalism and Mass Communication at UNC-Chapel Hill. “The fact that Pruitt is still running the show is astounding considering he guided the company through purchase of Knight-Ridder, a move that left McClatchy drowning in debt and is largely responsible for the news chain’s troubles. . . In this case, it’s not the economy stupid, It’s stupid management,” Towns wrote on March 17 2009, on the Talk Politics blog (http://weblogs.jomc.unc.edu/talkpolitics/?p=523).

But back to the core question: Should news executives at community newspapers take a pay cut for the good of their employees and businesses?

In working on this piece, yours truly put out several queries to news executives in community journalism. Some did not answer and a few who responded said they’d pass, thank you, on this one.

But several did step up to the plate and share their views on the compensation issue.

Ken Garfield spent 31 years in newspapers, including the last 21 at the Charlotte Observer (a McClatchy paper), where he retired a few years ago as religion editor. He thinks Pruitt’s cutting his pay won’t restore readers or advertisers to revenue-starved publications. Nor will reducing Pruitt’s pay, Garfield said, stop the flow of classifieds to other ad alternatives or keep Americans from turning on cable TV or their computers (rather than reading newspapers).

Still, Pruitt’s pay cut can be looked at as a symbolic gesture of good faith, said Garfield, now director of communications at 5,000-member Myers Park United Methodist Church in Charlotte, N.C.

“…in this day and age, symbols count, and I think such a move by Pruitt would provide at least a small measure of encouragement to the rank and file in his chain,” Garfield said (days before Pruitt decided to cut his own pay.) “I hear nearly daily from former newspaper colleagues about the bleak atmosphere in newsrooms everywhere, and how there is little hope for the future. Pruitt cutting his pay won’t change the reality, but it might boost morale if only for a short time. And maybe it’ll send a message to other CEOs in other businesses, that symbols matter.”

While he said he couldn’t speak specifically to the McClatchy situation, Gene Policinski, vice president and executive director of the First Amendment Center in Nashville, Tenn., sees executive salary reductions as a good idea—especially when the business enterprise is stressed.

Applying reduced compensation (for top executives and upper management) or other tactics to reduce payroll costs is appropriate, Policinski said, “for any company facing layoffs or salary reductions for lower-compensated workers, regardless of whether or not the company is a newspaper or news information source.

“It’s just good management, apart from the actual cost reduction. . . In smaller communities, where I have seen general reports that some news operations are profitable (if not flourishing), I again would use performance and value as a guide and avoid symbolic cuts,” said Policinski, who started his career in journalism at a small paper in Indiana and later worked at USA Today in sports.

Max Heath is a respected expert postal consultant and longtime (and now retired) vice president of Landmark Community Newspapers, Inc., in Shelbyville, Ky. Heath said the Guild had a right to ask the management of McClatchy, a public company, to reduce executive compensation, and management had a right to do as it wished.

Heath added, “Most such executives are invested in company stock, and have lost far more money from the sharp decline in company stock values than they would ever lose via pay cuts. And management profit bonuses have evaporated as well.”

He suggests the idea of cutting a newspaper executive’s pay might be overplayed and could backfire: “…everyone is suffering, and managing is harder than ever. The newspaper industry needs competent management. Mandatorily cutting pay won’t help anything, except drive off good managers to other businesses, and leave employees suffering under less competent managers.”

One long-time editor (employed at McClatchy when it bought the paper where he worked) is Terry Plumb. He retired from The Herald in Rock Hill, S.C., about two years ago.

Plumb, who still writes a column for The Herald and an occasional review of a local theatrical performance, said he doesn’t know what CEO Pruitt makes; nor does he particularly care. “But it’s a whole lot more than I ever did (make), and a bit more than my pension for sure,” Plumb noted.

Plumb added via email: “I have long thought that most CEOs made an obscene amount of money, and I am convinced that the financial crisis this nation finds itself in was due in large part to a culture that equates wealth to greatness. Given the system under which most corporate officers have operated, it should be no surprise that few of them ever looked beyond their annual bonus.”

Plumb said limiting the earning power of corporate executives “makes good sense from a marketing perspective. The PR guy who didn’t tell Detroit executives it was a bad idea to take the corporate jet to Washington, D.C., probably is in the unemployment line. In all likelihood, of course, none of those bigshots asked his opinion in the first place. They were just too important for that.”

But Plumb cautions that cutting news executives’ pay is by no means a panacea for righting what’s wrong or plaguing the newspaper industry: “…given the problems faced by most industries, including newspapers, capping CEO compensation is akin to asking the captain of the Titanic to give up ice for his gin and tonic.”

John Robinson, editor since 1999 of the 100,000+-circulation daily News and Record in Greensboro, N.C., thinks it’s a “reasonable request” to consider reducing some news executives’ pay.

You shouldn’t rule anything out in trying to keep newspapers viable in these tough economic times, Robinson said.

“If your business is in danger, you look at all expenses,” he said. “Salaries are one and there is no reason that top executives—even editors!—shouldn’t be included. If you love your business, as many journalists do, you do what you need to do to keep it going.”

Robinson, who worked in journalism at Norfolk, Va., Raleigh, N.C., Asheville, N.C., and Monroe, N.C., before coming to Greensboro in 1985, suspects that on the community level, many publishers and top executives have already cut their pay. “I also suspect that they don’t take home anywhere close to what the media chain leaders do.

“Most journalists I know aren’t in the business for the money,” he added. “We’re in it to make a difference, to inform people and to help the community. A high salary is nice but it’s not everything. If cutting a salary could save a job, my belief is that most journalists would make the sacrifice. . . My experience is that some community publishers—I know some, but not many—. . .care deeply for their newspaper and would take home les money if it would help during these times.”

Bill Rogers, executive director of the S.C. Press Association (which has about 100 newspaper members), said community newspaper owners, like their employees, haven’t been spared anguish in this era of layoffs, cutbacks and furloughs.

“The owners of smaller community newspapers are also feeling the pain as the bad economic conditions hit main streets in their cities and towns—just not in the same scale as the large groups,” Rogers said. “They are trying to keep a quality staff on board so the local news franchise is preserved for the better times ahead. The owners are certainly seeing profit shrinkage, and it isn’t a question of voluntary or not.”

Contacted for her take on publishers or owners of papers taking a pay cut, one S.C. community newspaper executive asked not to be named because “To tell you the truth, I don’t feel comfortable weighing in on this without going through corporate leadership. . . I can say that community newspaper publishers and editors generally are not compensated anything approaching $500,000!”


Larry Timbs is an associate professor in the Department of Mass Communication at Winthrop University in Rock Hill, S.C., where he teaches courses in print journalism. Timbs is also faculty adviser to the student newspaper.