Corporate 'Darth Vader' Revealed

The face of Corporate America can show many sides such as benevolence toward employees and generosity in humanitarian causes, but it also can reflect shallow goals and self-serving by those in positions of power.

CNNMoney / Fortune recently released their 2010 World’s Most Admired Companies – 50 regarded as having the best reputations. The survey asked businesspeople to vote for the companies that they admired most, from any industry. Below are the top 10 from the list.

1. Apple
2. Google
3. Berkshire Hathaway
4. Johnson & Johnson
5. Amazon.com
6. Procter & Gamble
7. Toyota Motor
8. Goldman Sachs
9. Wal-Mart
10.Coca-Cola

Each of these companies has had ups and downs (Toyota and Goldman Sachs on the latter side lately), but they are resilient and remain key players on the big stage. They are not perfect; they have detractors as well as admirers.

A good corporate reputation can be put to the test during trying times, yet if the company is well-structured, financially and culturally, it can not only survive a severe crisis but emerge stronger for it.

Gannett Co., Inc., one of America’s largest media empires and publisher of USA Today, has been enduring hardship from a combination punch of the Great Recession (which sharply cut advertising revenue) and free electronic competition from the Web (the print industry, especially newspapers, got pounded).


Gannett, which owns newspapers, Web sites and television stations, told its employees sacrifices were needed – unpaid furloughs, salary freezes and cuts, increased health care costs. It then laid off thousands of employees, many of them senior staffers at local community papers.

What the publicly-traded corporation did not do is spread that pain among its CEO and executive officers.

A departure from the Virginia-based company would bring Gannett Chairman and CEO Craig A. Dubow some $19.3 million, as of Dec. 31, 2010, with nearly half – $9.5 million – from his pension, reported Footnoted.org in a recent piece headlined: “An oddly placed reward at Gannett ...’’ Footnoted is part of Morningstar.

Footnoted reporter Theo Francis wrote that “much of the rest comes courtesy of a feature triggered just this year: All stock options and restricted-stock units granted since mid-2005 vest and become Dubow’s the day he walks out the door for the last time, as long as he isn’t fired for ‘good cause’ (specifics include misappropriation of funds, persistent neglect of duties or a felony conviction). His options then remain exercisable for as long as four years.”

Francis also reported, “Gracia C. Martore, Gannett’s president, COO and CFO, gets a similar deal, with equity grants since early 2005 vesting on departure and options remaining exercisable for as long as three years. Her take: $10 million.”

MediaJobsDaily reported that the Gannett Blog by Jim Hopkins, a former USA Today editor and reporter,
reviewed some details about salaries of the media company’s top execs, culled from a regulatory filing. Dubow was paid $4.7 million last year, which included a $1.5 million bonus. He made $3.1 million the year before.

Dubow, 55, and Martore, 58, implemented layoffs last year that resulted in the loss of 6,000 jobs at the corporation, which was near bankruptcy, according to Hopkins' blog. Martore’s salary last year for her duties as CFO amounted to $4 million.

Under Dubow and Martore’s watch, Gannett stock bottomed out in 2009 at $1.85 a share and is now trading around $17, which some applaud as a turnaround while others criticize as poor stewardship. (Disclosure: This author, a journalist employed by a Gannett newspaper for six years, no longer has any financial ties to the company).

Gannett stock traded between mid-30s and mid-50s in the early 2000s; at the stock’s peak in the booming late 1990s, it was consistently in the 70s and 80s.

The debate over executive compensation has raged for years across many U.S. industries, so Gannett enriching those at the top is not unusual. What is disturbing is the level of sacrifice demanded of its rank-and-file employees while its executive officers were blanketed with handsome financial incentive packages.

What message does it send?

Top Gannett leadership sees little value in building a solid reputation with its hard-working employees,
who receive the company’s embattled stock as part of their 401k participation match, and savvy investors who desire shares of a well-run, responsible and solid-performing corporate leader.

The list of most admired companies shows a corporation can be successful on many levels, not just the bottom line. Some companies, including Gannett, apparently didn’t get the memo that the “greed is good” business model is out of style everywhere, especially these days on Wall Street.

As for me, I practice what I preach at writenowworks.com.