UPDATED: Shares fell as much as 9.7% in early trading after Martha Stewart Living Omnimedia said that Lisa Gersh — who just became CEO of the domestic diva’s media company in July – “plans to step down from that role” as directors begin to search for a successor. The former Oxygen Media exec had been president and chief operating officer at Stewart’s company since 2011 and was expected to beef up its TV programming after Hallmark Channel decided early this year not to renew The Martha Stewart Show. As you might expect, execs say that all’s well. “With the restructuring of the media businesses complete and a strong team leading key financial and corporate functions, the company is on solid footing and positioned for growth,” Gersh says. “There is an exciting future ahead for Martha Stewart Living Omnimedia and I am committed to working with the board to ensure a smooth transition.” Martha Stewart, who’s founder and non-executive chairman, says that the “media businesses are now repositioned for the future and we are excited about the potential of our digital, mobile, video and print platforms.” But investors aren’t so sure. The company’s shares lost 45% of their value over the last 12 months before this morning’s drop. The publishing business slowed; Stewart’s company said this month that it will close Whole Living, a magazine dedicated to healthy eating. JCPenney, which bought a major stake in the company last year, plans to put Martha Stewart shops in some of its stores in 2013 — but Macy’s says it has an exclusive deal for Stewart’s merchandise and sued for breach of contract.
Martha Stewart Living Omnimedia is reducing the publication of two of its magazines and laying off about 70 workers as it deals with declining advertising and circulation. The news comes ahead of the media company’s Friday morning …
Martha Stewart Living Omnimedia is looking to shore up its struggling TV operations with the hire of Geoffrey Darby as General Manager of the company’s TV division. Darby, 25-year TV veteran who recently served as EVP of programming for The Weather Channel and president of production for Oxygen Media, will …
Will Martha Stewart put her company’s extravagant good-bye gift to Executive Chairman Charles Koppelman in a tasteful gift box with a bow? The former EMI Music chief — who was a fixture on NBC’s The Apprentice: Martha Stewart in 2005 — will leave by year’s end, Martha Stewart Living Omnimedia disclosed in an SEC filing today. His departure was moved up a year to open running room for MSLO’s new COO Lisa Gersh, who co-founded and ran Oxygen Media until NBCUniversal bought it in 2007. She’s been reporting to Koppelman but will report directly to the board when he leaves. But he shouldn’t complain: His exit package includes a $1.47M severance payment and up to $35,000 for the attorneys who worked on his new arrangement. The filing says he’ll remain on the MSLO board as “Non-Executive Chairman, Vice Chairman or Special Committee Chairman.” That will entitle him to an initial $50,000 in stock rights as well as rights to 100,000 shares. (Stewart, who was convicted of obstruction of justice in connection with an insider trading investigation in 2004, plans to rejoin the board before October.) Don’t let Koppelman’s sweet deal fool you into thinking that the publishing, TV, and merchandise firm’s doing well: MSLO shares lost about 20% of their value over the last 12 months.
EXCLUSIVE: This is exactly the kind of information that shareholders of Big Media need to know but rarely see. It’s considered a red flag when any public company pays one of its bigwigs – usually the CEO – three times more than the average for the four other top executives which the SEC requires them to list. So I’ve taken proxy statements and done the computations and discovered that at least 16 of 35 companies failed that test. Often miserably. Nearly half of the media company compensation packages disclosed so far for 2010 show a startling degree of hero-worship as boards of directors pay their top dogs sums that far exceed what the pay was for other top execs in the company.
Stock grants accounted for big chunks of the compensation for those who top this list, including Discovery Communications CEO David Zaslav, Viacom CEO Philippe Dauman, DirecTV CEO Michael White, Nielsen CEO David Calhoun, and CBS chief Les Moonves. Radio station owner Entercom was off the charts: CEO David Field’s $9.1 million compensation was modest by media company standards but still 25.4 times bigger than average for the company’s other four executives. It includes $7.9 million from stock grants that only pay off if Entercom shares rise to hit certain target prices.
Still, corporate governance experts who focus on what’s often called “CEO centrality” say that an out-of-whack pay package is bad news for shareholders. It indicates that the board of directors may be in the pocket of a CEO – or believes he or she has near super-human power to help the company succeed. In either case, the board is likely to give the CEO all the credit when things go well, and blame others when they go badly. Research shows that usually hurts the stock price over time.
I’ll track this and other measures of lop-sided pay as other media companies release information for 2010. But there are a few things to keep in mind: The SEC reporting rules only cover the top-paid executives of publicly traded U.S. companies. That means we probably won’t know how much privately held Hearst pays CEO Frank Bennack, or how much Japan’s Sony pays CEO Howard Stringer. It also means that we’ll miss a lot of highly paid people who work at subsidiaries of a big company; Universal Studios’ Ron Meyer may be a big deal in Hollywood, but he was a relatively small fish last year at parent company General Electric.
To make comparisons in our list here as fair as possible, we looked at the compensation for the five most highly paid employees for 2010. Sometimes companies report the pay for more than five people — for example, when a top executive is replaced during the year a corporation will include the incoming and outgoing person’s compensation. And the pay data given the SEC can spike in a year when an executive cashes in stock or collects deferred compensation. So here’s how the companies stack up, with the top paid executive’s 2010 reported compensation and comparison to the average (median) pay for the four other highest-paid honchos:
1. Entercom: David Field. The son of company founder Joseph Field became CEO in 2002, about 15 years after leaving his job as an investment banker at Goldman Sachs. Field made $9.1 million last year – the total of his $791,723 salary, $444,308 bonus, $7.9 million in stock, and $28,000 in other perks including medical insurance premiums. That’s a 348% raise in a year when company shares appreciated 53.2%. Though considered a strong operating executive, his salary stands out because it’s 25.4 times higher than the $358,692 average for the four other top executives listed in Entercom’s proxy statement. Field’s salary and the $3.9 million paid to CFO Stephen Fisher accounted for 93% of the $14 million that Entercom paid to its top five executives.