DeGroot Shoots Down Tribune's Golden Parachutes
Now former Sun-Sentinel reporter and writing coach John de Groot lays out the audacity -- and outrageousness -- of the severance packages paid to former Tribune executives at the time they unloaded the company to Sam Zell in a doomed, debt-laden deal.
Let's put it this way: It's a lot better than this one-week's-pay-for-every-year-of-service BS. Good de Groot knows the power of juxtaposition, and the Tribune financial figures complete a portrait of a corporate train robbery.
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[Also, a Sentinel reorganization memo issued yesterday is reproduced in this post's comments]
"Gold? We Don't Need No Stinking Gold!"
By John de Groot
Knowing they'd soon lose their jobs, Tribune executives outfitted themselves with diamond encrusted platinum parachutes, after brokering a deal to sell the giant communications conglomerate to real estate investor Sam Zell for some $8 billion in March of 2007.
Take Dennis FitzSimons, Tribune Co. Chairman and CEO who walked away with a total benefits package worth nearly $40 million when he resigned from his post following the Zell take-over.
A severance package of this stunning magnitude may offer a unique perspective for the 30-some Sun-Sentinel newsroom employees facing cost cutting pink slips this month - their stone parachutes totaling one week's salary for every year they worked for the south Florida paper.
In contrast, Tribune staff reporter Julie Johnsson outlined the details of the platinum parachutes her bosses negotiated with Sam Zell in a story published in the April 7, 2007 edition of the Chicago paper:
"Severance for departing executives will equal three times the highest salary they were paid during the previous three years, as well as 200 percent of their target bonus paid in the year (2007) the deal occurs.
"The severance packages established by the Tribune for its executives, none of whom have employment contracts, also pay them up to 25 percent of their base pay and other perks for three years after they leave the company."
Johnsson goes on to report that FitzSimons "stands to gain an additional $22.9 million by selling his Tribune holdings, restricted shares and stock acquired by option exercise in the merger, filings show."
The following reflects the total compensation the Tribune Company's then top executives* received during fiscal years 2006 (when the company was still publicly held) and 2007 (when Zell became owner):
Dennis J. FitzSimons
Chairman and CEO
Donald C. Grenesko
Senior VP Finance/Administration
Scott C. Smith
President Tribune Publishing
John E. Reardon
President Tribune Broadcasting
(*All four are no longer with the company, having been replaced by Zell's management team.)
As a further bit of Tribune trivia, consider the following "bottom line" operating profit comparisons for the media conglomerate after Fitzsimmons became Chairman and CEO in 2003
Division Operating Profits for:
Publishing - 58% decrease
Broadcasting - 38% decrease
Total Net Income - 90% decrease
Tribune Company - 150% decrease
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