The New York Times Company today abruptly announced that its 61-year-old chief executive officer, Janet Robinson, will leave at the end of the year, with no permanent successor lined up.
An SEC filing says Ms. Robinson will get $4.5 million plus health insurance for a 12-month retirement and consulting agreement, including "two-year non-competition, non-solicitation and non-disparagement covenants, a three-year cooperation covenant and an indefinite confidentiality covenant."
The Times itself reported that Ms. Robinson's pay in 2009 was $4.9 million, so she'll earn almost as much as a retired consultant as as a full-time CEO.
The handy investment calculator on the Times corporate Web site shows that $10,000 invested in NYT stock the day Ms. Robinson took over as CEO, on December 27, 2004, would be worth $1,855.14 today, a decline of 81.45%. The price of the stock went from $40.59 when she took over to $7.53 today, and though some dividends were paid out early in her tenure as CEO, the dividend has since been suspended.
It's all almost enough to be grist for one of those angry New York Times editorials or business section columns about executives whose outsized pay bears no relation to performance. In this case, the board hasn't fired the chairman, Arthur Sulzberger Jr., whose family controls the board and the company through a special class of stock. Ms. Robinson could perhaps argue that she earned her pay by serving as someone outside the family for the family to blame for the poor performance.
Which do you think accounts for more of the $4.5 million, the non-competition covenant or the non-disparagement covenant? Mark your calendar for two years from now when the non-disparagement agreement expires.