Tribune Company Compensation 2010

Memo from Tribune Co.'s CEO and COO


From: Tribune Communications
Date: February 26, 2010 12:01:34 PM CST
Subject: Message from Randy and Gerry/Compensation in 2010

Over the last two years we've made a lot of progress -- stabilizing our businesses, redesigning our newspapers and expanding our local news programming, managing expenses, improving our technology infrastructure, launching new products and obtaining great programming for our TV stations and WGN America. We're also changing the culture -- across the company we're taking intelligent risks, making decisions faster and doing less by committee.

On the expense side, some of what we've done hasn't been easy. We have, however, avoided things like furloughs and pay cuts, and we didn't reduce our medical benefits or increase insurance premiums in 2010. We rolled out an enhanced 401(k) plan that provides a dollar-for-dollar "company match" for the first 2% of eligible pay contributed by an employee, and a 50% match for the next 4% contributed. In addition, the plan includes the potential for a discretionary profit sharing allocation at year's end.

Thanks to the talent and efforts of employees across the company, our 2009 financial results were promising, especially in light of the tough economy and the depressed advertising market. We generated close to $500 million in operating cash flow (OCF) and earnings before interest, taxes, depreciation and amortization (EBITDA), including our income from equity investments, was greater than $600 million.

As a result of the company's success last year, there will be no freeze on base salaries in 2010. This does not mean that everyone will get an increase in compensation -- many won't. The current condition of the economy and our industry do not support across-the-board cost-of-living increases.

We're encouraging our local managers to review the work of their employees, provide consistent feedback, and to highlight and reward outstanding performance. Some employees may get an increase in salary, others may be eligible for a discretionary or spot bonus, and still others may receive an increase in their target bonus. But, increases in compensation will be based on merit.

Our goal is to remain competitive within our industry and create a culture that pays for performance. For example, last week at the Sun Sentinel, Howard Greenberg awarded $25,000 and a 7-day cruise to an employee who saved us more than $1 million by suggesting a change in the way the newspaper was replacing some outdated equipment. You'll see more spot bonuses in 2010.

There is still a lot to do. We can't afford to let up. But it's also important that we create a compensation system that encourages and rewards talent, innovation, speed and exceptional results.

Let's build on the momentum we've generated and deliver even better results in 2010. This can be a year of opportunity and growth -- but only if we keep changing, keep experimenting, and move faster than our competitors.

Randy and Gerry

SOURCE: Romenesko