You would, too, if you’d just been granted a half-million dollar bonus from a company that just three months ago was bankrupt.
This woman is Mary Junck, and she’s CEO of Lee Enterprises, the newspaper conglomerate that owns, among other things, the Wisconsin State Journal. Lee went on a buying binge a few years ago, overpaying for a bunch of daily newspapers scattered around the country. As a result, Lee racked up a billion dollars in debt (which their cash flow obviously couldn’t serve) and declared bankruptcy.
Why would such a company then turn around and give its CEO a half-million dollar bonus? (Not to mention the 250-thousand-dollar bonus to the company’s CFO, Carl Schmidt.)
Because these two captains of industry….err, media….re-negotiated the company’s debt.
That’s the way it works on Wall Street…err, I mean in media….today. It’s not whether your company is fiscally sound; it’s whether you can repackage the crappy debt you put out there, and find some investment banker outfit that will take your paper and charge your company dearly for doing so.
You just keep rolling the unsustainable debt, and collecting huge bonuses.
To make your cash flow support your debt, you slash payroll. Ironically, as Ms. Junck was collecting her half-million-dollar bonus, Lee Enterprises was busy laying off a bunch of staff at its newspaper in Helena, Montana – the Helena Independent Record. (By the way….how’d that paywall work out for you at the Independent Record? Not so good? Oh, that’s too bad.)
The company’s stock, which was almost de-listed a year ago because it had fallen below a dollar a share, is trading at about $1.21 today. In 2004, Lee stock was trading at 48 dollars a share.
So, to summarize: Lee Enterprises stock has fallen totally into the toilet; the company has just emerged from bankruptcy; it has a billion dollars in re-financed and unsustainable debt; and it continues to cut staff in an effort to pay back the sharks they owe.
I’d say it’s about time to give the financial whiz kids who run this company a huge bonus, wouldn’t you?