Are They Worth It?   

Top newspaper company executives receive seven-figure pay packages, not to mention lucrative stock options. Does this make sense in an era of tight newsroom budgets?

IT PAYS TO BE at the top.

Last year E.W. Scripps Co.'s chairman and chief executive officer, Lawrence A. Leser, earned $23,365 a week--about 26 times what a reporter with a minimum of five years experience at the company's Rocky Mountain News makes in a week, or about the same as an editorial assistant earns in a year at the Denver paper.

Tribune Co. head John W. Madigan pulled in $2.9 million in compensation last year, collecting more than any of the other CEOs at the 16 public media companies whose executive compensation practices were examined by AJR. Madigan also was awarded stock options for future use valued at $4.7 million. Next in line was Gannett's top executive, John J. Curley, who refused to take an increase in his base salary to signal fiscal conservatism in the nation's largest newspaper organization. He received $2.8 million in compensation last year, plus stock options valued at $3.8 million.

Madigan and Curley beat out Mark H. Willes, the new Times Mirror chairman and CEO. But then they worked 12 months while Willes put in only seven at Times Mirror. Willes dramatically turned around the company's standing on Wall Street by closing New York Newsday, selling its cable division, implementing stringent cutbacks and eliminating more than 2,000 jobs. His employer thanked him with a $2.4 million compensation package, plus stock options valued at $2.2 million.

By year's end, Willes had been rewarded with a $50,000 raise, bringing his base pay up to $800,000. The pay hike equals the annual salary of some reporters at Times Mirror's Hartford Courant, which last year lost 45 people in the newsroom via generous buyouts.

Richard T. Schlosberg III, Times Mirror's executive vice president and publisher of the Los Angeles Times, received $1.2 million in compensation last year, while his newspaper laid off 900 employees to reduce costs.

AT A TIME WHEN AMERICAN newsrooms are under tremendous pressure to tighten budgets, trim newsholes, reduce staff and limit raises, top media company officials are hardly feeling the same pinch. Many of the senior executives who steered their companies to enviable profit margins despite skyrocketing newsprint costs were richly rewarded.

"I just think the discrepancy is a little excessive," says Thomas Winship, former editor of the Boston Globe. "It would be nice if, in this particular downsizing period, the CEOs share a little of the wealth."

"I don't have any argument with a company that's failing trying to get back up on its feet," says David Bates of the Washington-Baltimore Newspaper Guild, which is negotiating a contract with Baltimore's Sun, a Times Mirror paper. "But when you have so much corporate fat at the top, it just seems so unjust to trim from the bottom."

It isn't only the newspaper business where lucrative executive compensation packages are drawing attention. Executives at many companies across the country are making headlines for enjoying generous salary packages while laying off workers and cutting budgets to boost short term profits. It's the crudeness of the formula that seems to bother many. Top management squeezes the company without publicly demonstrating any sensitivity to the hardships it is imposing. Employees work twice as hard or even lose jobs, while top management and shareholders reap the benefits as stock prices rise.

THE QUESTION IS WHETHER the men managing public media companies--and since there are only two women among the five highest paid executives at the 16 media companies AJR studied, we are talking about mostly men--are worth all that money.

Some say absolutely, citing the immense responsibility that accompanies running billion dollar enterprises.

If the answer rests solely on how well the company is performing, shareholder returns and operating profits, then the answer among investors would be a resounding yes.

"The Tribune Company did very well last year," spokesman Bob Carr responded when asked about Madigan's compensation. "Those revenue numbers for us were gangbusters. There sure seems to be a correlation between performance and salary."