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
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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 newspaper’s 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 didn’t 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 9’s “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 Stanley’s complaint
concerning the New York Times Company’s 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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