Postmedia Network Inc. chief executive officer Paul Godfrey saw his total compensation increase by 50 per cent in the last year, as he steered the company through a series of deep cuts intended to reduce the newspaper company’s reliance on print advertising.
Mr. Godfrey, whose contract was recently renewed for another three years, took home $1.7-million in total compensation in fiscal 2013 compared to $1.1-million the year earlier according to documents filed with securities regulators.
Postmedia, the country’s largest publisher of metropolitan daily newspapers with titles such as the Vancouver Sun and Ottawa Citizen as well as the National Post, has been aggressively restructuring the company to deal with a brutal print advertising market that has hobbled publishers across North America.
The publishers have been working to increase the money they make online, but the growth hasn’t been fast enough to help offset the losses in print. Postmedia posted a $154-million loss for fiscal 2013, although $100-million of that was a non-cash write off to reflect the declining value of its assets. Revenue decreased almost 10 per cent in the year as print advertising revenue declined almost 14 per cent.
The company intends to cut $180-million out of its operating budget within the next year and a half, and has already managed to cut $82-million since announcing the plan last year.
Few aspects of the company’s operations have been untouched. The company paid out $35-million in restructuring costs in the last year, including severance payments and buyout packages as it consolidated many editing functions cut Sunday papers in several cities. It’s also sold real estate and introduced paywalls for its newspapers and sought concessions from its workers amid as it also looks to free up cash to pay down a $474-million debt.
Last month Mr. Godfrey warned the company wasn’t done yet. He’s hardly the only one making changes – Torstar Corp. has laid off waves of workers, outsourced editing and introduced a paywall. The Globe and Mail instituted buyouts in the last year and also asks readers to pay for digital news.
“We are paying down debt from the proceeds of selling underutilized buildings, outsourcing non-core elements of our business and restructuring our operations to work more efficiently,” Mr. Godfrey said in an October interview. All of these efforts are necessary, but none of them – either separately or combined – are enough, yet.”
The bulk of Mr. Godfrey’s pay increase came from the company’s short-term incentive plan, which provided a $580,000 boost due to operating targets tied to operating profit and digital revenue. The company didn’t actually meet its targets, however, so Mr. Godfrey only received half the amount he could have otherwise. He was also paid $180,000 for “entertainment expenses,” slightly less than last year.
His base salary remained unchanged at $950,000.
Gordon Fisher, who took over at the company’s Pacific Newspaper Group this year and has warned employees at the Vancouver Sun and Vancouver Province that they will need to make concessions if the papers are to survive, was the company’s second highest paid executive after the company issued him a $366,000 retention bonus that helped increase his total compensation by 74 per cent to $871,000.
Chief operating officer Wayne Parrish saw his salary drop almost 50 per cent to $559,000, largely because he was granted a large stock-based bonus in 2012.
The company’s financial documents also show that John Paton decided to leave the company’s board in early November. Mr. Paton, who runs Digital First Media Inc. and is chief executive officer of Journal Register Company, is considered one of the industry’s leading thinkers on the digital transformation of the newspaper industry.
He was recently appointed to the Guardian’s board in the United Kingdom.