Tribune Co. proposed paying its top 43 executives a severance package of cash and benefits if they are asked by a new board to leave the company after the Chicago-based media conglomerate emerges from bankruptcy.
The company didn’t put a price tag on the package, but said it amounts to 2.5 times salary and bonus for Chief Executive Randy Michaels, and 2.25 times salary and bonus for Chief Operating Officer Gerry Spector. Both would be entitled to 24 months of the company’s group health benefits.
Nine other top executives, including Tony Hunter, the publisher of the Chicago Tribune, and Eddy Hartenstein, publisher of the Los Angeles Times, would get 1.75 times salary and bonus plus 24 months of benefits. A list of 32 others would get 1.5 times salary and 18 months of benefits.
Tribune Co. filed the plan late Thursday as part of a supplement to its plan of reorganization.
The severance agreement would have to pass muster with the large banks and hedge funds that will end up controlling the company, which owns both the Chicago Tribune and the Los Angeles Times. As part of the reorganization plan, the severance arrangement will have to survive whatever opposition might emerge during the plan confirmation process scheduled for late August.
A host of creditor groups on all sides of the case have already raised concerns about current Tribune Co. management’s compensation scheme. Since the Chapter 11 case began in December 2008, U.S. Bankruptcy Judge Kevin Carey has approved $57.3 million in bonuses for more than 600 top and middle managers at Tribune Co., including incentive payments of $42.1 million for 2009 performance.
Last week, the company filed a 2010 management incentive plan that made the incentive targets more challenging but could potentially add another $42.9 million in payments from the company, which has been in bankruptcy since December 2008.
The plan document, which doesn’t provide dollar amounts for individual salaries or bonuses or provide a total cost of the severance plan, said the agreement would kick in for any of the 43 employees who are terminated within what it defined as the “Protection Period,” or 18 months past the effective date of the reorganization plan. If the executive is let go for cause or because he or she is unable to do their duties for more than 180 days, the severance agreement doesn’t apply.
Tribune Co. also proposes in the plan to compensate executives with shares of stock in the reorganized company drawn from a pool of equity set aside for such incentive plans. The company originally proposed putting aside 7.5 percent of the new equity for the program. But after opposition from future owners like hedge fund Angelo, Gordon & Co. and JPMorgan Chase, Tribune Co. decided to leave the architecture of the program to a reconstituted board that will be chosen by a large group of financial institutions that is slated to own more than 92 percent of the company under the reorganization plan.
In the plan supplement, Tribune Co. indicated that it anticipates that the company’s current board and management will be retained until the restructuring plan can be confirmed and put into place. The new ownership will have the right to pick the company’s longer term leadership. It is anticipated that the board, at least, will be remade — and that this would include the departure of Tribune Co. Chairman Sam Zell, sources say.
Tribune Co.’s reorganization is currently up for vote, with ballots due Aug. 6. At a hearing in U.S. Bankruptcy Court in Delaware Thursday, however, Carey indicated he may push that date out a few days, so that creditors have a chance to digest an examiner’s report in the case. The report said that the company’s 2007 leveraged buyout, led by Zell, may have been a case of fraudulent conveyance, meaning it rendered the company insolvent from the day it closed.
Under law, Tribune Co.’s exclusive right to propose a plan of reorganization runs out on Aug. 9, meaning others can propose competing plans after that date. Carey, however, said on Thursday that he will do his best to make sure Tribune Co.’s confirmation hearings proceed as planned starting Aug. 30.
Why should executives get any better severance treatment than rank and file workers? Oh, that’s right, because they can.
They must mean the MISMANAGERS you know the ones who bankrupted the company Lost a great Newspaper And the Board of MISDIRECTORS will walke awaywith their s also
They must mean the MISMANAGERS you know the ones who bankrupted the company Lost a great Newspaper And the Board of MISDIRECTORS will walke awaywith their s also “MY job is to MISMANAGE this company until someone buys it and pays me a bonus for DOING MY JOB”
i think the maximum amount of severance and medical coverage for these executives should be EXACTLY what was offered to any other employee who was eliminated during the current regime’s tenure. the only bonus these jerks should get is an extra large cardboard box for their personal belongings.
EVERY employee should get the exact same package, from mail room to executive. That’s only fair.
The people who wrecked this company left long ago – this is just the aftermath of a series of bad decisions that started with the Times Mirror purchase.
What happens if you don’t pay a cent ?do they just refuse to leave?
and if 2.5 time salary LET them buy their own Health insurance
Even with all the layoffs, there has to be a few enterprising reporters left in this once great company. Let them practice hard core investigative reporting. Find out how much these mopes would actually be “entitled” to, and post it somewhere prominent.
What is this crap about providing outrageous benefits to those who f#$%^ked up the company in the first place? These bad managers definitely do NOT DESERVE any benefits that exceed those at the bottom of the heap – probably less. They should have been fired a long time ago.
Do I understand this correctly. We want to give more money to the people who ran the Co. into the ground and had to be removed from their post.
OK. I follow.
Lyn, not true. Even if the ones who sold it to Zell are gone, Michaels and crew have done enough to further wreck the company that the others are right, they deserve nothing. The WGN radio fiasco was totally under Michaels.
The others are right that since the Tribune Co. used the bankruptcy to renege on the severance promised to the people who left about 20 months ago, no executive is entitled to any severance until the others are paid.
The nerve of these people that they think they are entitled to a big payout if the new owners justifiably fire them is outrageous.
Michaels should consider himself lucky if his severance package fails to include his own head on a pike.
Ridiculous…Unions are bad, corporate execs are the same garbage. Do these people work for Obama, I mean he is the king at rewarding failure.
Please people, stop working hard, it doesn’t pay. Just fail and then declare you need a severance and unemployment. This country is ruined. We are spoiled brats.
How could any Judge let these people walk all over him like that, where is president Obama when the little people need him?
Why shouldn’t these executives get one week severance for each year they have been there? It seems generous to me.
They deserve the same treatment that all the grunts these “managers” fired since the clowns took over. Nothing but the door!
Unbelievable. A bunch of us got let go back in 2008, and I am so happy that happened. Sam Zell and his little minions (Lee Abrahms [a real quack who would send out idiotic emails to the entire staff weekly], Steve, Randy) have really run the place further into the ground.
Someone please knock The Troll — I mean Sam Zell — of his motorcycle when you see him. And you damn reporters at the Tribune: have some decency and don’t let these idiots steal money from your company! REPORT THEIR MISMANAGEMENT.
So you get paid far too much as it is, for not only driving your company into the ground, but if it gets worse and you get fired, then you get extra money for your “wonderful” work. SO, where’s your incentive for turning to company’s financials around and getting out of bankruptcy…? Job well done guys, Conrad would be Proud of this deal, he taught you well.
It’s a big reward for landing the Trib in bankruptcy court.
They all should be fired and rehired at minimum wage.
Just imagine what they would have been paid if they had been successful!
They are managers (considered special people by the board).
so when they reorganize, the creditors will get chump change and the management can make money? you would think creditors come first, then what crumbs are left, they can spread around.
I’m sorry, but the new business model is like new math, or even new coke to me.
great – as an ex trib employee who got squat when i was let go, this makes me feel real good.
Hey, Trib – it’s incredibly hypocritical of you to buy thousands of ads proclaiming yourself the truthtellers of the city….
…..when you’re acting like anything but a moral compass.
The only thing these guys should get is some nice new paper to print their resumes on. End of story.
This is the same Trib that’s outraged that Pat Quinn gave raises to his staff when the state is running a deficit?
Lee Abrams, a futuristic thinker who helped position Tribune for the 22nd century, deserves every penny he can get.
Worst-managed company of the decade? Worst CEOs, worst Board and worst deal of the decade? Is Sam Zell the biggest scam artist in the world? Where is the incisive reporting on THAT?
The last bunch of “managers” are not receiving their mail in the poor house, you know. They took their money and are now working in academia or for the “hated” NYT or for some not-for-profit. So, “owned” by the stock market or “owned” by Zell or “owned” by banks, what the hell’s the difference? What this probably means is that the individual pieces will probably be sold off…the viable former Times Mirror papers, for sure. Eli Broad or one of those people will buy the LAT. Baltimore may be screwed unless someone local steps up there.
As others have commented, the merger with Times Mirror was ill-fated and the people running the company through most of the 2000s did nothing to streamline costs or boost revenue. They never really bothered to merge the cultures of Times Mirror and Tribune.
Fitzsimmons and Maidgan were inept and clueless stuffed shirts but not thieves. They put the company in a place where a thief like Zell and his frat boys could rape, pillage, and plunder what was left. And they did. They should –but probably won’t–get exactly what all the people they laid off got for severance–nothing more. Of course if life were fair, I’d have a full head of hair–among other tnings…
To the victor go the spoils. It’s no wonder Sam Zell is on no one’s guest list. If the creditors don’t object to this hand in their pockets they are as bankrupt of ethics as Zell. And then there is the bankruptcy court judge who has to pass on this. Is it possible that he could not only quash their request for an expanded bonus plan but also reduce their severance pay to what other employees get. I mean they have already raided the company. Disgusting.
The “regular” employees get the door while the “experts” running the company into the ground get pay raises and bonuses for their stellar performance. Maybe they’ll also ask for retainer fees so they won’t run off to another company and run that one into the ground too. I mean, everyone must be falling all over themselves to hire these great managers.
**** these ********. Workers, take note. Never give your all for a company. You do not matter to them. Read “Bartleby the Scrivener” and live it.
So, how many employees were let go due to bankruptcy and reorganization, and how many of those employees got the same deal? THEY aren’t the ones that created this bankruptcy fiasco. Greedy losers.
So, with record $57.3 million in bonuses, incentive payments of $42.1 million, and potentially add another $42.9 million in payments, AND NOW 2.5 times salary and bonus for Chief Executive Randy Michaels, and 2.25 times salary and bonus for Chief Operating Officer Gerry Spector. Both entitled to 24 months of the company’s group health benefits. Nine other top executives, including Tony Hunter and Eddy Hartenstein, would get 1.75 times salary and bonus plus 24 months of benefits. A list of 32 others would get 1.5 times salary and 18 months of benefits.
HOW MANY EMPLOYEES WERE LET GO TO PAY ALL THIS MONEY OUT???? ARE THE CUT SALARIES ENOUGH TO EVEN BEGIN TO COVER THIS? If the company is “bankrupt” where does this money come from?? oh yeah, “fraudulent conveyance”.
If they are such great “leaders” or “top executives” or whatever then they should have no problem finding a new job, right? Trib, save your money for once!!! Let those people find jobs like the rest of unemployed america. They are definitely NOT any better from what I can see.
These people belong behind bars, not running a company. Unbelievable. They are no better than liars, crooks and thieves. I’d love to see the entire list of bozos lining up to grab the cash. Anybody have the list?
Sounds like these execs have spent a lot of time worrying about and planning for themselves and their own futures, instead of the futures of the company and its employees.
And where, ahem, is the pension fund in all of this? And where is Dennis FitzSimons? The Dennis FitzSimons who trotted away with $33 million after chortling about what a great deal this was and how the Great Banc (he pronounced it bonk) was a wonderful thing. That Dennis FitzSimons. I feel and urge to get up a rabble with pitch forks and torches to haunt these guys who appear to have looted the company.
Doesn’t everyone just love all those Creative Think Pieces Lee sends.
I guess we all know what he’s been Creatively Thinking about – how to get his Golden Parachute. In the mean time he’s been laying off hundreds and freezing raises for some departments. It’s time the people of the Tribune Corp. RISE UP and rebel.
They don’t deserve a penny — they should pay all of those reporters who they laid off in their path to ruining all of the Tribune owned papers.
Also, as the captain of that sinking ship, Zell should go down with them: good riddance to that crook!!!
Does anybody know how Zell comes out in the backruptcy/reorg? Is he getting his investment back? Or even, God help us, a premium on that investment?
Did any one notice that Lee Abrams actually commented. And what was amazing was how short his comment was. What happened, Lee? No more think pieces that drolled on and on to absurdity and no one understood what any (I mean any of them meant.)
And for Randy Michaels who snarked at employees that were about to be layed off and runs is own personal parties including his poker parties on the company’s dime? Or his grabbing secretaries in elevators and saying “let them sue me.” Disgusting
Zell. C’mon. Where is he? Probably hiding somewhere in a Mickey Mouse sweatshirt that he would wear to his friend’s funerals. Think out of the box and challenge authority. From week one when a solid reporter asked him if they had to revert to “puppy dog” journalism he whipped back “f….you”. Its on tape. Play it for the court!
And as part of that court hearing, show the document that was sent to all current and former employees stating the “thousands of shares” they have in the ESOP with a value of “0″.
Also, the list of the 47 managers should be published so we can confirm they are all losers and therefore in jeopardy of losing their jobs.
A week for every year. And out with your bags packed by five.
Oh and yes, maybe Spector can have his car washed by the security guards and his tires pumped (as he always did in front of employees that were about to be released) before he leaves so we can be assured he never returns.
It is interesting that the commentary by the Tribune executives were “unfazed” by the examiners report but they had enough time to draw up a list of people that they want to protect. “Truth in journalism begins with internal documents” Unfazed. Please phase these people out and quickly.
Also, the creditors and bondholders should check the documents of these people expense reports as they were pillaging the company before they left or know they were goners. (Really don’t check the executives, check there direct reports so the executives that were pillaging could sign off without higher levels of approval.
Oh, and Mr. Zell please remove your dancing bureacrat statue from the lobby when you leave. YOu made need to sell it after you are sued by the employees you humiliated during “your deal from hell.” Your employees despised it.
Chicago, huh???
Where have I heard about shady dealings and a nickname of “a political sewer”???
Oh, Barry.
I swear the executives fought this package to the bitter end. Being loyal socialists they surly wanted to make sure any exit packages were spread around equally to all the little people.
Typically left-wing hypocrites. Do as I say (write in this case) not as I do.
How long are the people who run a business into the ground going to be rewarded for it? The employees who simply did their job and are now losing them deserve a parachute more than these criminals.