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Business & Media Institute

5/27/2006 10:06:44 AM

Updated 05/24/06

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Fight Media Bias!


Sidebar: Hypocrisy at the NY Times
This is a sidebar to Media Attack Executive Pay, Hide Effort to Seal Their Own Compensation Records

By Noel Sheppard
Business & Media Institute
April 26, 2006

Send this page to a friend! (click here)     During The New York Times weeklong executive pay blitzkrieg, an April 13 editorial entitled A Cozy Arrangement highlighted an interesting irony.

     Its conclusion: Runaway pay matters because top executives are snatching more than their fair share of corporate proceeds. More important, it also means that the board of directors is not performing its function as internal guardian of the company's health.

     What made this so ironic was the revelation less than a week later that several major shareholders of the newspapers parent company were complaining about the pay structure of the Times upper management. As reported in an April 19 article, the fourth-largest Times shareholder, Morgan Stanley Investment Management (MSIM), questioned the salaries of top management when the stock was performing poorly.

     The Times quoted Hassan Elmasry, a managing director of MSIM, saying, Despite significant underperformance, management's total compensation is substantial and has increased considerably over this period.

     Yet, this didnt stop the Times from pointing fingers at other companies that pay a great deal of money to top management, including Morgan Stanley. In fact, during an eight-day period, the Times complained about the executive pay structure at the Vanguard Group, Putnam Investments, Verizon, ExxonMobil, Occidental Petroleum, U.S. Steel, Alcoa, Sunoco, Goldman Sachs, Lehman Brothers, Merrill Lynch, Gap, Activision, Equitable Resources Inc., and ConAgra.

     The Times even had the nerve to chastise companies that had poor performance while still paying their executives huge sums of money. In April 9s C.E.O. Pay Keeps Rising, And Bigger Rises Faster, author Eric Dash wrote: boards at many automobile, retail and telecommunications companies appeared to ignore last year's bad news. Gap, for example, more than doubled the compensation of its chief executive, Paul S. Pressler, to $19.1 million, even though the company posted its worst results in years.

     Of course, this mirrors Morgan Stanleys complaint concerning the New York Times Companys poor performance and its apparent lack of impact on the increasing pay of Times upper management. As Katharine Q. Seelye reported in the April 19 story, While the newspaper industry as a whole has been buffeted by stagnant advertising, flagging circulation and competition from the Internet, the Times Company's stock has fared worse than the industry's average in the last two years. Since January 2004, the company shares have fallen 47 percent; an index of industry stocks has fallen 35.8 percent. In the same period, stocks in the Standard & Poor's 500 index have climbed more than 17 percent.


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