BREAKING: Inquirer CEO Tierney Got Bonus Before Bankruptcy
Though the company teetered on the verge of bankruptcy at the time, this past December Philadelphia Media Holdings awarded bonuses to CEO Brian P. Tierney, vice president of finance Richard Thayer and Daily News publisher Mark Frisby.
PMH board chair Bruce Toll confirmed bonuses of $350,000 for Tierney and $150,000 each for Thayer and Frisby in a phone conversation on Friday. Reached by phone, Frisby told Philadelphia, “The numbers are wrong. But I’m not going to give you a number.”
Frisby refused to comment any further.
Tierney did not immediately return phone calls requesting a comment for this story.
Thayer could not be reached by e-mail for a comment.
Toll had first told Philadelphia that no bonuses had been awarded when asked earlier this week, but agreed to look into the matter. Today he said the bonuses had in fact been paid.
“I forgot,” he said. “I’m involved with something like 20 companies, and [when Philadelphia first called] you were asking me to remember what happened in December. But when I asked around, some other board members reminded me we had approved the bonuses.”
PMH filed for bankruptcy in February. Toll, of the homebuilding Toll Brothers company, confirmed that the PMH board knew the company¹s fiscal situation was dire. “The financial condition of the papers was obviously not good,” said Toll. “We knew what was going to happen sooner or later.”
So why give out $650,000 in bonuses? “We thought it was deserved,” he said. “But we can’t get into the details because we’re involved in bankruptcy proceedings.”
It had earlier been revealed that Tierney received a raise in December, just before Christmas, boosting his pay roughly 40 percent to $850,000. The company initially defended the raise, which was revealed in its bankruptcy filing, by saying that Tierney had taken on extra responsibilities since his initial deal had been struck.
Tierney gave up the raise shortly after it was revealed. Frisby and Thayer simultaneously gave back smaller raises. Now comes news of the bonuses, which were awarded just two months after the company’s unions voted to postpone $25-a-week raises for each of its members at the request of PMH.
UPDATE: Saturday morning, Bruce Toll called back and left a voice mail message saying he is not actually sure of the bonus amounts.
Brian Tierney still has not returned phone calls requesting a comment. — Steve Volk
March 29th, 2009 at 7:03 pm
I don’t know who left that comment [now deleted — admin], but it wasn’t me. My comment is no comment. Anyone who’s confused can email me at bunchw@phillynews.com for confirmation.
March 30th, 2009 at 8:47 am
But how does one receive a bonus for failure?
March 30th, 2009 at 11:02 am
ILozZoc Says:
March 30th, 2009 at 8:47 am
But how does one receive a bonus for failure?
====
hmmm, maybe ask someone in the financial industry, they seem to have mastered that tactic.
March 30th, 2009 at 11:59 am
And don’t forget, besides the union giving up raises, there was another round of layoffs of Guild workers as of Dec. 31. No wonder the company couldn’t afford to keep those folks on.
March 30th, 2009 at 12:41 pm
Newspapers journalist prided themselves on standing up for the little guy. They (newspapers) gave voice to those that had none. Now newspapers are the little guy as newspaper newsrooms are diminished and newspapers with respected reputations are ruined by owners who have no passion or commitment to journalism. Why are the employees silent and not getting out of the newsroom and into the streets?
March 30th, 2009 at 1:22 pm
If you look up the word slime in the new Webster’s Dictionary, you will see Brian’s picture. If I was in charge of the union, Id see the papers go out of business before i would give them 1 more cent of concessions.
I wonder what his expense account looks like. He probably hasnt paid for a lunch or dinner out of his pocket since he took over.
March 30th, 2009 at 3:16 pm
Within Knight Ridder, the Philadelphia newspapers had a reputation of having the highest cost structure and the most featherbedded operations due to union greed. No matter what happens in the executive suite, the unions will help drive these papers into the ground, trying to make themselves fat until the very end. It’s no surprise that nearly all of the newspapers facing dire financial straits are unionized, while non-union papers have the flexibility to roll with the punches and even turn a profit. Death to the unions!
March 30th, 2009 at 9:54 pm
Newspaper that railed against AIG bonuses paid bonuses just before declaring bankruptcy
http://hotair.com/archives/2009/03/30/newspaper-that-railed-against-aig-bonuses-paid-bonuses-just-before-declaring-bankruptcy/
March 31st, 2009 at 9:00 am
Garbanzo hit the nail on the head. Clearly the Philly papers are in bankruptcy because of the unions. It was the unions that overleveraged themselves to buy a company they couldn’t afford. It was the unions who awarded themselves massive bonuses and massive raises weeks before filing for bankruptcy. It was the unions who diluted the news product and obtained corporate sponsorship for news pages and jacked up prices and fabricated circulation numbers. Damn unions.
March 31st, 2009 at 8:26 pm
@Ed: So corporate greed and stupidity justifies union greed and stupidity? Unions have been pillaging the Philadelphia papers for decades (which is why McClatchy sold the Inky and DN along with nearly every other union Knight Ridder paper in its portfolio). The work rules for Philadelphia Newspapers sales reps gave them OT for making out-of-town business calls. A buddy of mine used to be a high-ranking exec in the KRI days and told me story after story of union greed (pressmen working OT shifts, but never showing up and being covered by their buddies, etc.). Please show me another industry where white collar employees are so unionized (banks, high-tech, pharma?). And show me an industry that has grown and benefited from unions (steel, autos, ???). It’s all academic — soon members of the coddled unions of the Philadelphia newspapers will be looking for non-union jobs as Wal-Mart greeters.
April 1st, 2009 at 9:57 am
@Garbanzo: I get it. You hate unions. But hating unions doesn’t make them responsible for an investment group that borrowed too much money to overpay for a company, then lied, cheated and stole its way into bankruptcy, looting what was left of the coffers on the way to the poorhouse.
April 1st, 2009 at 9:57 am
Two years ago, 71 lost their newsroom jobs at the Inquirer. Among the 71, the entire suburban staff of longtime writers and photographers. Most of them had twenty years seniority. They were paid half of what the downtown staff received, and used their own cars. They fought years for “equal pay for equal work” and were rewarded with a layoff when the company and the guild cut a deal to get around seniority. Ask the former suburban staff what they think of the newspaper union.
April 1st, 2009 at 10:17 am
Too much money is relative. If PMH had the cashflow to service the debt, they wouldn’t be in this situation. And if they could restructure their operations quickly to take out costs, they would have the cashflow. The unions have given up a lot, to be sure, but they started from fat and happy and have worked their way down to normal. Every time PMH wants to change something (press crew manning, a job description for a newsroom employee, etc.), it’s like crafting the Treaty of Versailles — endless discussions with the union on every nit and twiddle. So yes, I think in this instance, unions are the sand in the machine, slowly it down so it cannot change quickly enough.
The reason I despise most unions is they remove incentive for individual excellence and promote group mediocrity. If you’re a union member and do a kick-ass job, do you get more money? No, as that’s governed by the contract. Better days or hours? No, that’s governed by seniority.
Oddly, look around the economy and you won’t see a lot of union wage givebacks for ailing organizations (particularly governments, where union pensions will be the next subprime mortgage crisis in 10-20 years). The union MO is parasitic, except a good parasite knows that killing its host ultimately leads to its own demise. Really, I challenge you to show me some examples of companies, particularly with white collar employees, where unionization has lead to corporate growth. If the workers of dot coms were represented by the Guild, I hardly believe the Internet boom would have existed.
April 1st, 2009 at 10:25 am
And another anecote: I worked at a newspaper a number of years ago where the old hot metal composing room was replaced with computers, and the journeymen compositors were given lifetime job guarantees in return for allowing this technology into the company (how alien is that concept now!). This was the same crew that, under the union contract, would take the preprints in each week’s newspaper, re-typeset them, and dispose of the typeset material because the contract said that all material printed by the newspaper had to be typeset inhouse. They had 10+ people dedicated to this make-work idiocy.
So these old guys who wouldn’t otherwise have a job because they lack both education and any modern skills would sit around the former composing room on company time and bitch and whine about the company. They would produce below-average quantities of below-average quality work and there wasn’t much management could do about them (marching someone through progressive makes a Supreme Court case look easy in comparison).
If PMH was smart, they would have bought the assets of PNI and started from scratch, rehiring only the employees they needed into a non-union shop. The union cancer would have taken some time to take hold, during which period PMH could have made the structural changes needed. Alas, Tierney didn’t have the killer instinct.
April 1st, 2009 at 8:02 pm
Garbanzo, you are one angry dude. Your description of union featherbedding was something that happened decades ago. You’re way out of touch. I worked in the Inquirer newsroom and let me set you straight on something. There’s something called a merit raise that an employee can get for doing an excellent job. You, obviously, never got one – for obvious reasons, you’re an idiot. Anyone who thinks unions are to blame for the downfall of this paper is uninformed & uneducated. Ed and Stu both have it right..and accurate. If you think non-union newspapers are the way to go, head over to the Courier Post, a Gannet paper, and apply for a job. Oh wait! They cut their staffs too! And you know what else? All employees are required to take a one week furlough. You probably don’t know that means a forced week off without pay. Sounds like you spent too much time at Westy. get yourself some kneepads and go visit Tierney in his office. Thats a job you’re probably good at.
April 1st, 2009 at 8:38 pm
Apologies — perhaps because I live in NYC where taxpayers’ pockets are picked daily by unions that I’m a bit peeved. Cement truck drivers here recently struck because they felt making $130K per year wasn’t enough. Crane operators similarly struck a few years ago because $150K wasn’t enough. NY cops run up their OT and retire in their early 40s on total packages nearing $100K. NYC firefighters work construction jobs on the side where they get injured (and these fire watches are legally mandated by laws pushed by union reps) and retire at 75% pay on the public dole. 90%+ of all unionized LI RR employees retire under disability, but still get to play free at LI public golf courses. NY Times truck drivers regularly made more than $100K before The Times got wise and shut down their distribution arm.
None of these victimless crimes, in that consumers pay for it. I was in a Guild shop the other day and witnessed a (male) shop steward pitch what could best described as a hissy fit in front of management over a union member being denied a car service voucher. My anger is borne out of experience of being a senior executive in this industry for many years (many pay grades above Nostrathomas) and see it first-hand ridden down (more so) by union greed than managerial incompetence. I’m a guy who had access to all the budgets and behind-the-scenes details, so I know of what I speak. And you know what? No one has to believe a word I say because reality will soon play out and render unionized newspapers DOA. There goes Minneapolis. There goes Tribune. SF isn’t far behind…
April 4th, 2009 at 4:39 pm
I rephrase this. My comment is no comment with a caveat.
Please see my post today about Netbooks.