Tribune company CEO receives $41 million buyout

Comments ⁵

1. Dawn Douglass

   Yeah, this is the kind of greed/excess/stupidity that gives capitalism a bad name, unfortunately.

2. Wiley Miller

   Actually, this sort of thing isn’t capitalism. Capitalism relies on the principle of supply and demand. This is nothing more than legal theft.

3. Alan Gardner  (admin)

   CEOs, (like all employees) ARE a commodity that is responsive to supply and demand forces. Companies hire CEOs (or promote them) and offer such deals because they don’t want said individual to work elsewhere. We can argue whether FitSimmons’ performance with the company merited this payola, but it was probably negotiated when he started or during peak performance evaluations by the board. To sum up… yeah, this was capitalism as excessive or as it seems.

4. Dawn Douglass

   You’re right, Alan, and the problem is that way too often a CEO’s salary and bonus structure isn’t tied to performance at all, OR it’s solely tied to the bottom line, which doesn’t take into consideration how you get there or what the future repercussions are of any shortsighted actions.

   I’ve got an MBA, and two of the first things you learn in graduate business school is that 1) employees always make up the biggest portion of your expenses, and 2) you only get a tiny percentage of increased revenue (depending on your profit margin), but 100% of a decrease in expenses goes straight to the bottom line.

   So in other words, if you cut employees, your profit is going to go way up, WAY moreso than if you work to increase sales and revenue.

   The truth is that a large percentage of these CEOs who make these millions and millions of dollars were hired for the very purpose of axing people. This is especially true for today’s newspaper industry which has consolidated into huge corporations that have shareholders who want to match the 10 and 11 percent gains they were used to getting.

   So we have a lot of newspapers who are now eating themselves alive in a desperate attempt to keep shareholders satisfied. The CEOs who are proven good eaters will continue to make millions until there is nothing left to digest.

   Independent newspapers, those few that remain, are a heck of a lot healthier (and better places to work, I’m sure), than those that sold out.

5. Rich Diesslin

   You also may have learned, or observed, that companies as they grow gain many folks that aren’t very productive (deadwood). Middle managers are often pointy-haired Dilbert manager types that think more employees = more important and promotion, so they often encourage it to the detriment of the company. That being said CEOs’ salaries often seem to border on the obscene, as do professional athletes’ … so what is fair, good, just and true … who do you appoint to determine these things? There should be market forces at work for these positions and salaries. Ideally in a capitalist system the errors where worth is overrated (as this may be) should be corrected over time. Sometimes it comes too late, but even so that is, in a macro-economic sense, still a market correction.