Bloggers blast GateHouse for high executive bonuses while debt balloons

Pulaski County Web ^ | 4/15/2011 | Darrell Todd Maurina

[darrellmaurina]

Apparently GateHouse Media thinks some employees deserve big bonuses:

"CEO Michael Reed had a pay package of $1,250,000 in 2010, receiving a bigger bonus than his base salary. His bonus amounted to $750,000 of the total, according to the report. Apparently, the board of directors were quite pleased with Reed's performance since his contract calls for a target bonus of $200,000 and he received nearly four times that amount. Fortunately for Reed, he did not receive his bonus in GateHouse Media shares."

Why didn't the GateHouse CEO get his bonus in shares of his own company? GateHouse trades for less than 1 percent of its value from a half-decade ago.

Unlike some GateHouse critics, I'm a conservative. Private companies can do what they want with their own money, and if executives perform well, they can and should be compensated well.

What are GateHouse executives doing?

Besides running stock prices down the stairway and into the cellar, GateHouse executives accumulated an almost-unbroken string of losses for the last several years and piled up $1.2 billion of debt. That's "billion" with a "B."

Maybe it's not big bucks in Washington, but $1.2 billion is massive debt for small towns typically served by GateHouse Media newspapers.

What are the consequences of trying to run a local newspaper with staff who are mostly new to the community and take direction from people who don't live here?

The Waynesville Daily Guide reports a circulation of 1,400. The Pulaski County Daily News average daily readership last month was 2,234, making it the most-read civilian news operation in Pulaski County.

Obviously I'm doing something right.

Competition produces better products. But if things continue the way they're going at GateHouse Media, it's questionable how long there will be competing media in this community. That will be a shame.