Exec Bonuses/Newsroom Outsourcing a Virtueless Circle

Rupert Murdoch

In the early ’80s, shortly after I’d started working at LA Weekly, we began to pay 100 percent of health insurance premiums for full-time staffers. There was nothing heroic about this; the paper was in the black, everyone was underpaid and it cost all of 50 cents an hour or so per employee. But when word got out, the collective sigh of relief in the building was almost audible. Even some of the nihilists and anarchists — a significant percentage of the staff — were thrilled.

The decimation of the media industry, and particularly the newspaper business, has meant the elimination of health insurance benefits not only for the tens of thousands thrown out of work but also for the many writers, designers and others now forced to freelance. Media companies have to make cuts to stay in business, and some outsourcing is inevitable. But rewarding execs with big bonuses for, in effect, taking away workers’ health insurance is unconscionable.

A public filing shows Gannett paid its CEO Craig Dubow $4.7 million — including “premiums paid by the Company for supplemental medical coverage” — for 2009, a year in which the newspaper giant laid off more than six thousand employees and cut the pay of many who survived. His $1.5 million bonus could have taken care of non-supplemental coverage for quite a few, and even more could be saved by a fraction of the $19.3 million Dubow will pocket the day he leaves Gannett.

Then there’s News Corp. CEO Rupert Murdoch, always portrayed as a man who, despite his flaws, “loves newspapers.” This mega-mogul, who’s presided over deep newsroom cuts for years while his Fox News and Fox Business Channel rail against health-care reform and financial deregulation, was paid a mere $18 million last year. Completing the virtueless circle, the WSJ — owned by News Corp., natch — noted that “Mr. Murdoch’s biggest hit (ital mine) was in his bonus, which fell following the company’s plunge in earnings and stock price amid the global financial crisis and economic downturn.”

Finally, a company — and not just any company — punishes its CEO for poor performance! From $17.5 million the prior year, Murdoch’s bonus plummeted to — are you ready? — a paltry $5.4 million. Take that, Rupe.

And what about the bonuses raked in by execs at the giant health insurers? Well Point recently paid at least $1 million each in bonuses to 39 execs while its subsidiary Blue Cross announced rate hikes of up to 39 percent. (Could the number 39 be an unconscious reference to the evil, clandestine organization “The 39 Steps” in Hitchcock’s thriller of the same name?) Carolinas HealthCare chief Michael Tarwater made $3.4 million in 2009, including $1.9 million in bonuses. And the list goes on.

The massive profits of these firms — the top five netted $12.2 billion last year while insuring 2.7 million fewer Americans — assure there’s plenty of dough left over to help convince government officials to kill the health-care reform that would require them to perform simple acts of fairness like accepting applicants with preexisting conditions.

While executives laugh all the way to the bank(!) and business types argue about how to rejigger bonuses to make them sound more palatable, some, like McGill University professor Dr. Henry Mintzberg, argue it’s time to get rid of bonuses altogether.

Health insurance for all and bonus systems that don’t cheat and insult Americans should be no-brainers. If health-care reform — the current bill is way better than nothing — and financial reform with teeth — the Dodd bill isn’t much better than nothing — don’t get passed, and passed soon, we need a law prohibiting Congress from using the word “government” to describe what they do. Only, who would pass it?

Michael Sigman

Michael Sigman is a writer/ editor, media consultant and the president of Major Songs, a music publishing company.

Crossposted from Huffington Post with the author’s permission.

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