The New York Times, a Crazy Bonus, and Entrepreneurs

I get calls from time to time, from people at employment agencies. They want to know if I'll be filling any positions.

I'm a writer and artist, writer mostly, and run a sole proprietor business where I'm the CEO, general manager, marketing department clerical staff and maintenance department - and do anything else that needs to get done.

Even so, I'm not paying myself all that much. But it's no use complaining to the boss about it: I've tried.

The Brian H. Gill Company isn't one of the most successful small businesses in America: but I've got something in common with those that are.

I don't waste (too much) money.

I can't.

I think it's partly a matter of scale, partly a different approach to running a business.

Take The New York Times: Please!

Take The New York Times, for example. It's an old-school newspaper; and a dispenser of what it says is "All the News That's Fit to Print". That slogan's been around since 1896, and started out as a marketing campaign to distinguish the NYT from what I suppose we'd call tabloids today. (Britannica)

The New York Times won't, I think, disappear: it's got a role to play as the hometown newspaper for Manhattan's upper crust. But it's got financial issues.

"Times Says It Will Cut 100 Newsroom Jobs"
Richard Pérez-Peña, Media Decoder blog, Media & Advertising, The New York Times (October 19, 2009)

"The New York Times plans to eliminate 100 newsroom jobs - about 8 percent of the total - by year's end, offering buyouts to union and non-union employees, and resorting to layoffs if it cannot get enough people to leave voluntarily, the paper announced on Monday.

"The program mirrors one carried out in the spring of 2008, when the paper erased 100 positions in its newsroom, though other jobs were created, so the net reduction was smaller. That round of cuts included some layoffs of journalists - about 15 to 20, though The Times would not disclose the actual figure - which was the first time in memory that had happened.

"The paper has made much deeper reductions in other, non-newsroom departments, where layoffs have occurred several times. But the advertising drop that has pummeled the industry has forced cuts in the news operation as well. The newsroom already has lowered its budgets for freelancers and trimmed other expenses, and employees took a 5 percent pay cut for most of this year...."

I've got my own ideas about why traditional, old-school, established newspapers and network news departments have facing hard times recently. But that's another topic, for another blog. ("The New York Times, Insularity, and Assumptions," Another War-on-Terror Blog (October 21, 2008))

The bottom line is that The New York Times apparently doesn't have enough cash coming in to pay all of its employees. That sort of thing happens. I was laid off for the last time several years ago, from a job I'd had for two decades, so I've got some idea what the Times staff is going through.

Some of them.

"New York Times CEO was paid $4.9 million in 2009"
Breitbart (March 16, 2010)

"An analysis by The Associated Press shows that New York Times Co. CEO Janet Robinson got roughly $4.9 million in compensation in 2009.

"Robinson's base salary fell 4 percent to $962,500. But she got a bonus of about $2.3 million, four times the size of her 2008 bonus.

"Robinson also received stock options that were worth $1.6 million when they were granted. About $560,000 of that was meant to replace options that had been given in 2008 and were later voided because they exceeded a limit set by company bylaws. ..."

I think that managers and executives earn the big bucks: by riding herd on projects and people; and by making the right decisions. (Lemming Tracks: Jobs, Skills, Status and Stress," Apathetic Lemming of the North (March 13, 2010))

Like I said, I think it's reasonable to pay folks at the top of the pyramid more than those who are responsible solely or primarily for their own work. To a point.

I don't know what folks who aren't CEOs in The New York Times get paid, buy my guess is that the $2,300,000 that Robinson got 2009 might have paid the salary of at least one other employee. I could be wrong, though: $2,300,000 sounds like a lot of money to me, but not everybody's like me.

Good thing, too: But that's yet another topic.

Even if Robinson really is worth that much to The New York Times, I am not at all sure that taking over two million bucks as a bonus - $4,900,000 total - sends the right messages to the rest of the employees.

Being Rich is Okay

I have no problem with other folks having more income than I do. I'm where I am as a result of choices, and on the whole I'm satisfied.

Once I told my boss that the way I saw it, my job was to make him ridiculously wealthy. That may sound like apple-polishing, but it was a simple statement of fact. I wanted the person who signed my paycheck to have plenty of cash - because that's where my pay came from.

Entrepreneurs aren't Better: They've Got to Act Sensibly

The person who runs the paper in the town I live in can't act like the CEO of The New York Times. His paper has a little over a dozen employees. Each of them has a cluster of functions, and as far as I can tell the paper needs each of them. (That's not entirely guesswork - I've talked with the owner/operator and folks working there, and seen what they do.)

I suppose he could, in a few bad years, take a whacking great bonus for himself and fire some of the folks who work for him. It would be stupid, but he could do it.

In the short run, he'd have more money for himself. In the long run, I don't think the paper would survive. Even if the remaining employees didn't cut their losses and find work somewhere else.

Sauk Centre might wind up without a newspaper - or someone else might step in to fill the gap. I know of at least one person who could do it.

So it isn't that entrepreneurs are necessarily smarter and more sensible than high-end corporate CEOs. They've got to act responsibly. When they don't, their enterprise collapses.

Unlike major American automakers: who, when they pilot their companies into the ground, get taxpayer support.

Which I've written about before.

Vaguely-related posts:

• "AIG, Outrage, Corporations, Unions, and Common Sense"
  (March 16, 2009)
• "Lemming Tracks: Jobs, Skills, Status and Stress"
  Apathetic Lemming of the North (March 13, 2010)
• "Govenment Bailouts of American Automakers, Financial Firms: Feels Good, But - - - "
  (March 9, 2009)
• "Obama Wants Caps on Fat Cat Payouts"
  (February 4, 2009)
• "Bank Bailouts, Bloated Bonuses, and Common Sense"
  (December 21, 2008)
• "So Big Three Collapse: Is That a Problem?"
  (December 12, 2008)