For­mer ed­i­tor’s bonuses amid lay­offs fol­low him to State

The Washington Times Daily - - Front Page - BY JIM MCELHATTON

Not long be­fore he left his job as man­ag­ing ed­i­tor at Time mag­a­zine for a post at the State Depart­ment, Richard Stengel de­liv­ered some bad but not un­ex­pected news — the mag­a­zine needed to cut staff to close a bud­get gap.

But the cuts ap­par­ently only went so far. They didn’t ex­tend to the more than quar­ter-mil­lion-dol­lar bonus that Time had doled in 2012 out to Mr. Stengel on top of his $700,000 base salary, records ob­tained by The Wash­ing­ton Times show.

And while Time Inc. has moved to freeze pay and lay off hun­dreds of em­ploy­ees this year, Mr. Stengel es­ti­mates that he is still in line to re­ceive another bonus worth $100,000 to $250,000, ac­cord­ing to a re­cent gov­ern­ment ethics fil­ing.

The $289,000 bonus last year, as well as the an­tic­i­pated bonus to be paid out early next year, came to light in a dis­clo­sure form Mr. Stengel filed fol­low­ing his nom­i­na­tion to un­der­sec­re­tary for pub­lic diplo­macy and pub­lic af­fairs at the State Depart­ment. The White House an­nounced the nom­i­na­tion in Septem­ber.

Mr. Stengel did not re­spond to a re­quest for com­ment through the State Depart­ment, nor did Time af­ter be­ing

pro­vided a copy of the ethics fil­ing.

A State Depart­ment spokes­woman said Fri­day that Mr. Stengel was aware of the news­pa­per’s in­quiry and would re­spond if he had any­thing to say.

Ed­ward J. Wasser­man, dean of the grad­u­ate school of jour­nal­ism at the Univer­sity of Cal­i­for­nia, Berke­ley, said such pay­outs show how me­dia or­ga­ni­za­tions have taken a les­son on ex­ec­u­tive com­pen­sa­tion from Wall Street.

“It of­fends our sense of jus­tice,” he said. “Some peo­ple are not just es­cap­ing, but walk­ing away in ter­rific shape fi­nan­cially, whereas oth­ers get a fairly min­i­mal sev­er­ance and no safety cush­ion at all.”

But such deals also are hardly un­usual, Mr. Wasser­man added.

“It’s be­come stan­dard prac­tice in the in­dus­try,” he said, adding that he feels a bit like “old school moral­ist wag­ging my fin­ger” when he con­sid­ers his re­ac­tion to such deals.

In­deed, The Wash­ing­ton Times re­ported last year on a sim­i­lar sit­u­a­tion of a me­dia ex­ec­u­tive dis­clos­ing a big pay­out while news staff ei­ther feared for their jobs or lost them.

When Mau­rice Jones left his job as publisher of The Vir­ginian-Pi­lot to take a po­si­tion in the Depart­ment of Hous­ing and Ur­ban De­vel­op­ment, he dis­closed more than a quar­ter-mil­lion dol­lars in bonus com­pen­sa­tion around the time the news­pa­per was cut­ting dozens of jobs.

The New York Times re­ported in Jan­uary that Mr. Stengel was seek­ing two re­searchers, one staff writer and three copy ed­i­tors to ac­cept sev­er­ance deals, but added that he would use lay­offs if not enough vol­un­teers ac­cepted.

“Time Inc. is un­der­tak­ing a com­pany-wide re­struc­tur­ing,” Mr. Stengel wrote ear­lier this year in an in­ter­nal memo, which was first re­ported on by The Wall Street Jour­nal. “As part of this cost sav­ings ini­tia­tive, we need to make some cuts in our ed­i­to­rial staff.”

While Mr. Stengel did not re­spond to in­quiries on this bonus, he pro­vided more de­tail to a State Depart­ment ethics of­fi­cial about the up­com­ing bonus he ex­pects to re­ceive.

“Con­sis­tent with the cus­tom­ary prac­tice for de­part­ing ex­ec­u­tives of Time Mag­a­zine, I will re­ceive a pro­rated bonus in early 2014 based on the pre-es­tab­lished terms of the com­pany’s bonus plan for work I com­pleted in 2013,” he wrote in a let­ter to the State Depart­ment’s ethics of­fi­cial.

Based on a memo from Time Inc. CEO Laura Lang ear­lier this year, it’s not likely that many oth­ers are ex­pect­ing bonuses. She re­minded staff that the com­pany needed to “ag­gres­sively man­age costs” and that it would be forced to elim­i­nate an­nual merit in­creases for staff in 2013.

“I know this is dif­fi­cult news to hear and we did not take this ac­tion lightly, but made this de­ci­sion with the long term health of the com­pany in mind,” she wrote a memo to staff re­ported on by The Wall Street Jour­nal.

Mr. Stengel’s nom­i­na­tion also marks yet another de­par­ture from jour­nal­ism to the State Depart­ment un­der Sec­re­tary John F. Kerry.

Doug Frantz, as­sis­tant sec­re­tary at the Bureau of Pub­lic Af­fairs, pre­vi­ously worked as na­tional se­cu­rity ed­i­tor at The Wash­ing­ton Post.

The ap­point­ment re­quired him to get a spe­cial waiver from Pres­i­dent Obama’s ethics rule that bars ap­pointees from par­tic­i­pat­ing “in any par­tic­u­lar mat­ter” with a for­mer em­ployer for two years from the date of hire.

“Mr. Frantz’ abil­ity to work on mat­ters in­volv­ing the Wash­ing­ton Post or the Wash­ing­ton Post Com­pany is of par­tic­u­lar im­por­tance … due to his ex­per­tise in na­tional se­cu­rity and in jour­nal­ism and the me­dia in­dus­try,” a State Depart­ment of­fi­cial wrote in grant­ing a waiver.

The waiver essen­tially al­lows Mr. Frantz to talk to Wash­ing­ton Post re­porters and ed­i­tors. Like­wise, Glen John­son, the for­mer Bos­ton Globe online pol­i­tics ed­i­tor turned se­nior ad­viser to Mr. Kerry, needed a waiver to talk with Globe re­porters and ed­i­tors.

“It of­fends our sense of jus­tice. Some peo­ple are not just es­cap­ing, but walk­ing away in ter­rific shape fi­nan­cially, whereas oth­ers get a fairly min­i­mal sev­er­ance and no safety cush­ion at all.”

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.