Gannett's Chief Gives Himself A 17 Percent Salary Reduction

Craig A. Dubow, chairman and chief executive of the media giant Gannett, is taking a 17 percent salary cut as the company struggles with declines in advertising and circulation that prompted staff cuts this summer.

In a memo circulated Monday evening to employees of the McLean-based company, Dubow wrote that he would reduce his pay by $200,000 starting this month and continuing in 2009. That would put him on track for a base salary of $1 million this year and next.

Dubow also said all company and divisional officers would have their salaries frozen for 2009. The moves came after the publisher of USA Today detailed plans in August to cut 1,000 positions in its community publishing division, with layoffs accounting for 600 of those reductions.

"All Gannett employees are making deep sacrifices for their company," Dubow said in the memo. "I have great empathy for those employees and their families who have lost their jobs."

Dubow is not the only local executive to voluntarily trim his compensation. The student lender Sallie Mae of Reston said its chairman, Anthony P. Terracciano would take a yearly pay cut and delay some of his stock awards as the company navigates the tight credit markets.

The compensation of top executives, particularly those on Wall Street, has become a hot-button issue in recent months amid public debate over government efforts to intervene in the financial crisis. For instance, New York Attorney General Andrew M. Cuomo last week sought detailed information about bonus plans at nine banks that got emergency federal funding last month under the Treasury Department's rescue plan. Banks participating in the plan must accept limits on executive compensation. Members of Congress have since called for tougher rules.

Beyond the debate on Capitol Hill, some who study executive compensation said many corporate chiefs are likely to see cuts in pay this year as the downturn puts pressure on corporate earnings and shareholder scrutiny mounts.

"It is certainly a sign of the times," Alexander Cwirko-Godycki, research manager of Equilar, a provider of executive compensation data.

Steven Hall, managing director of the executive compensation consulting firm Steven Hall & Partners, said some executives are moving to accept cuts now before the economy deteriorates further and bad news builds.

"This is not a bad time to stay off the radar screen," he said.

Sallie Mae, more formally known as SLM, said in a filing with the Securities and Exchange Commission on Monday that it had extended Terracciano's contract for an extra year so that it now ends in January of 2012. He will receive a cash retainer of $480,000 a year, down from $600,000, the company said. Terracciano also delayed receiving 66,666 shares from his stock award plan for one year. In his original contract, Terracciano has the right to receive 200,000 shares of Sallie Mae stock, to be paid out in three equal sums on the anniversary of his start date, Jan. 7.

His pay package also includes options to buy 500,000 shares in three equal parts on the same dates, at $17.83 a share. That provision did not change, the company said. Shares for Sallie Mae closed at $11.30 yesterday, up $1.17.