Gannett CEO Michael Reed, preparing to launch a new round of layoffs after the nation’s largest newspaper chain lost $54 million during the second quarter of this year, has increased his personal stake in the company.
Reed spent $1.22 million to buy 500,000 shares Gannett stock on Monday, raising his own holdings in the struggling media empire to 1,826,335 shares, according to filings with the Securities and Exchange Commission.
He paid $2.44 per share just says after his announcement of a 7% drop in revenue and huge losses sent Gannett stock in to a tailspin. Stock prices dropped 28% after Reed announced Gannett’s quarterly earnings last Thursday. The stock is down 57 % so far in 2022, and 85% over the last four years.
The move drew the ire of Matt Pearce, a Los Angeles Times reporter and president of the Media Guild of the West, which represents media employees in Southern California and the southwest.
“Gannett’s market capitalization right now is $348 million,” Pearce wrote on Twitter. “Given that the board just authorized a stock buyback of up to $100 million of those shares (instead of using that money to not fire journalists), sounds like a good plan to help drive up the value of the CEO’s own shares.”
Pearce is not a Gannett employee, but another journalist who works for Gannett-owned The Arizona Republic, also leveled criticism directly at Reed.
“Why are we suffering for poor business ownership? This dude is reaping millions off the backs of our labor, threatening us with layoffs, then betting money on the expected gains from us gone,” stated Joseph Jaafari in a tweet. “This is cold-hearted and an immoral business practice at the hands of a dirty CEO.”
Dan Kennedy, a journalism professor at Northeastern University who runs a blog called Media Nation, noted this week that Reed’s salary in 2021 was $7,741,052, including stock awards and other compensation plans. Other executives and Gannett board members also raked in sizeable earnings.
“You also have to ask what, exactly, Gannett’s executives and board members are being rewarded for,” Kennedy said. “Gannett needs to demonstrate that it can provide communities with the news and information they need, and they’re failing miserably at that.”
A NewsGuild-CWA study in 2020 cited by Kennedy reports that the median salary of Gannett journalists at fourteen daily newspapers that have unionized is $52,000, with those with less than a decade of experience at roughly $44,000.
“The people doing the actual work make peanuts,” noted Kennedy. “And now they are bracing for yet another round of layoffs, while the people presiding over this fiasco are paid hundreds of thousands or millions of dollars.”
Correction: An earlier version of this story identified Dan Kennedy as a professor at Northwestern. He is with Northeastern.