NEWSGUILD-CWA CALLS ON GANNETT SHAREHOLDERS TO VOTE AGAINST CEO MIKE REED AT ANNUAL MEETING
Letter points to Gannett’s mismanagement of newsrooms and plummeting stock price to urge vote of no-confidence
NEW YORK – The NewsGuild-Communications Workers of America today sent a letter to Gannett shareholders urging a vote of no-confidence against CEO Mike Reed at the company’s annual shareholder meeting on June 5. The NewsGuild-CWA represents more than 50 Gannett bargaining units, covering more than 1,000 employees.
The letter warns that Reed’s actions are jeopardizing the financial future of the company, underlining that the hollowing out of newsrooms was tainting the company’s reputation, turning off subscribers, forcing out talented staff, and creating legal risks by hampering proper vetting of stories.
Reed has increasingly come under fire for gutting newsrooms around the country and shrinking pay and benefits for journalists, forcing many to seek employment elsewhere. The company has laid off more than 600 workers over the past year - nearly 20% of its journalism jobs – and has instituted unpaid furloughs and a hiring slowdown and suspended company contributions to employee 401(k) plans.
Under Reed’s watch, the company’s finances have been grossly mismanaged. Since the merger of GateHouse Media and Gannett Media in November 2019, the letter notes, Gannett’s share price has fallen nearly 70% - far more than industry peers such as Lee Enterprises (32% loss over the same time period) and The New York Times Company (19% gain).
Last week, Poynter reported that senior leadership at Gannett was experiencing a “mass exodus”, with eight top-ranking editors and executives departing the company over the past six months, including USA Today’s editor-in-chief, publisher, and vice-president.
Reed, meanwhile, has profited handsomely during this time, earning a salary of $7.74 million in 2021 - 160 times the median salary of a Gannett worker. In 2022, he made $3.4 million. Gannett also continues to hire union-busting law firms while paying poverty wages, slashing newsroom staff and failing on diversity goals.
Gannett is the country’s largest newspaper chain and owns more than 200 daily newspapers across the country, down from the 261 it owned at the time of its merger with GateHouse in 2019.
During the merger of Gatehouse and Gannett, Reed also assumed a massive debt load with high interest rates and quarterly payments that hurt local newsrooms’ ability to function. At the time of the merger, the NewsGuild-CWA criticized the added debt burden, saying it would “exert downward pressure on wages and employment… [and] accelerate news deserts.” Reed brushed these concerns aside and attacked the union as a “big problem.”
“Mr. Reed has dangerously mortgaged the future of our company by assuming debt with high interest rates and quarterly payments that are extracted from stakeholders. He has reduced local content by relying on wire service and regional stories, cut newsroom staff, and maintained a compensation policy that is forcing many of our journalists to seek work elsewhere,” the NewsGuild-CWA says in its letter. “As a result, our communities are not being served and our employees are demoralized. Therefore, we believe it is time for a change in leadership: a clear vote of no-confidence in a guy who has weakened our company, forsaken the towns and cities where we have outlets, and impoverished shareholders.”
The letter urges Gannett shareholders to vote against Chairman Mike Reed for director by withholding their vote for Mr. Reed on Item 1 of the proxy card.
It recommends a series of changes to bring the company back to profitability by reinvesting in newsrooms and journalists. Recommended measures include:
- Reducing the ratio of CEO-to-median salary ratio to 20:1 (it is currently 66:1), which would eventually lower salaries throughout the executive ranks;
- Re-negotiating the company’s debt to extend the payback period and lower annual payments, instead of using asset sales to overpay the debt, and using funds from asset sales to newsrooms;
- Improving transparency about staffing to let the audience know what product they’re buying, including requiring each news outlet to post a list of newsroom staff and, if there are no staff members, stating that in the directory.
As the NewsGuild-CWA says in its letter, “Our company will only survive if its brands reconnect to their communities. Our recommendations will move us in that direction. To undertake this change in direction, we need new leadership at the top.”
The NewsGuild-CWA is a major stakeholder of Gannett. The CWA General Fund owns 1,590 shares of Gannett. NewsGuild-CWA members and staff own Gannett shares, and CWA members hold Gannett shares directly and indirectly through public pension funds.
A fact sheet on the shareholder letter can be found here.
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