Former Gannett Co. CEO Craig Dubow's received a severance package valued at about $32 million after chronic health problems prompted his resignation from the largest U.S. newspaper publisher.
The owner of USA Today and more than 80 other U.S. newspapers disclosed the details of Dubow's compensation in a regulatory filing late Friday. A contract that Dubow signed in February 2007 guaranteed he would receive his full pension, stock awards, a severance payment and other benefits if he became disabled.
Dubow resigned last October after six years as CEO and 30 years with the company. He stepped down after taking two medical leaves during 2010 and 2011 to deal with hip and back ailments.
Dubow's final compensation package includes $12.8 million in retirement benefits, $6.2 million in disability benefits and a $5.9 million severance payment, according to the filing. Gannett stock options and restricted stock, which Dubow had accrued during his years of employment with the company, were also part of the package. Those stock awards are valued at nearly $7 million.
Separately, Gannett will pay $25,000 to $50,000 annually for a $6.2 million life insurance policy covering Dubow and another $70,000 annually for benefits such as health insurance, home computer and secretarial assistance and financial counseling. He will receive most of these benefits for three years unless he goes to work for a competitor, according to the filing.
Dubow's tenure as Gannett's CEO coincided with deep cutbacks in staff, triggered by a sharp decline in print advertising, the main source of revenue in the company's publishing division. Gannett's revenue from print advertising plunged from $5.2 billion in 2005 to $2.5 billion last year. Gannett's stock price plummeted by 86 percent while Dubow was CEO, dropping from $72.69 to $10.45.
The shares have rallied under Dubow's successor, Gracia Martore, amid hope by investors that a recently introduced program to charge readers for online access to most of Gannett's newspapers will boost profits. Gannett's stock ended the week at $15.21, a 46 percent gain since Dubow's resignation. The Standard & Poor's 500 index is up nearly 21 percent during the same stretch.
Martore was Gannett's chief operating officer before Dubow's departure. Martore declined a raise when she became CEO last year, according to Gannett's filing. Instead, she agreed to maintain her salary of $900,000, the same amount that she had been receiving as Gannett's chief operating officer. Even before she was named CEO, Martore was working under a contract that entitled her to a $950,000 salary, but she voluntarily lowered it to $900,000 beginning in 2010 in recognition of the tough times facing Gannett.
Martore's compensation, including a bonus and the estimated value of stock options, totaled $4.7 million last year.
Gannett is the second major newspaper publisher in a week to disclose a large severance payment to a former CEO. The New York Times Co. said its former CEO, Janet Robinson, got a package valued at about $23 million after she retired at the end of last year.
Dubow, who was 56 at the time he resigned from Gannett, is a member of The Associated Press' board of directors. His term ends in April.