Monday, September 28, 2009

New York Timesian accounting 

The Times' management commits a number of accounting errors.

Strangely, they all worked accidentally to increase top executives' pay, while the business is hemorrhaging losses and its rank-and-file employees are taking pay cuts and layoffs across the board.
Times' trouble with pay

The New York Times regrets the error(s) -- sort of.

The newspaper publisher said it flubbed in awarding top execs more pay and stock options than they were allowed under the company's rules at a time when the firm has been slashing salaries, selling assets and scrambling to shore up its balance sheet. Now, it says, it will stay with the compensation guidelines.

The move also comes as the firm is trying to unload the money-losing Boston Globe after demanding $20 million in union concessions.

In 1991, the Times adopted a plan that limited execs to no more than 400,000 stock options each year. This year, however, Chairman Arthur Sulzberger (Pinch) Jr. and CEO Janet Robinson each were granted 100,000 options over that limit. Last year, Robinson did even better, with 250,000 more than allowed.

The Times also erred in approving an incentive scheme for 2011 and 2012 that exceeded a $3 million limit. Robinson and Sulzberger could have received as much as $3.5 million.

The publisher, which disclosed the mistakes in a regulatory filing late last week, didn't say what led to the errors and didn't offer any further explanation.

During the Globe talks, the Times first laid out $14 million in possible cuts, then said it miscalculated and lowered the savings estimates to $10 million.

As it struggles with a severe ad slump and $1 billion in debt, the Times has drawn greater scrutiny for its pay practices, accounting and corporate governance. Audit Integrity, which analyzes accounting and corporate governance risks, rates the Times "very aggressive" -- its worst rating.

It now ranks in the seventh percentile -- meaning it has a higher accounting and corporate governance risk than 93 percent of companies in North America... [ NY Post ]
Well, now at least we know the accounting philosophy behind its editorial pages' constant defense of the status quo in Social Security.