Tribune Reduces Executive Compensation, Freezes Salaries

Posted on November 17, 2001

Tribune Company, publisher of the Chicago Tribune, announced 1,400 job cuts in June of this year and is now seeking to find more ways to cut costs but without laying off additional staff. Tribune Company has announced a series of cost cutting measures related to compensation, including:

Approximately 140 senior managers across the company will take a 5% salary reduction, effective January 1, 2002. The group includes John Madigan, chairman and chief executive officer, Dennis FitzSimons, president and chief operating officer, Donald Grenesko, chief financial officer and Jack Fuller, David Hiller and Pat Mullen, the presidents of the company's three business groups.
Effective January 1, 2002, the salaries of all Tribune employees not covered by a collective bargaining agreement will be frozen for 12 months. These employees will be eligible for a special one-time grant of Tribune stock options based on merit. The six executives named above will not be eligible for this one-time stock option grant. The company also will be seeking compensation cost savings from union-represented groups.
Cash bonuses for 2001 will be minimal and the six executives named above will not receive bonuses for 2001.
Hiring will be limited to critical functions; the goal is to reduce staff through attrition.

``It's hard to remember when there has been a stronger need to deliver quality news and information to our readers, listeners and viewers,'' said John Madigan. ``At the same time the advertising marketplace is under tremendous pressure. In light of this, we are taking strong cost-cutting actions, over and above what we already have done. However, we are adding an important long-term incentive in the form of merit-based stock options to recognize the important contributions of our employees. By managing our businesses well, we are positioning Tribune to come out of this downturn with industry-leading journalistic and financial performance.''

In addition to reducing compensation, Tribune will further reduce corporate expenses and all of the company's business units will implement further cost-saving measures.

``During the last year we have realized operational cost-savings throughout our business units, lowered capital spending, left open positions unfilled and completed a voluntary retirement program,'' said Dennis FitzSimons. ``Our people are among the best, and they operate some of the strongest local media franchises in the industry. We are facing the challenges of the current environment head-on. We will cut costs and also put greater emphasis on our ad sales efforts. Most importantly, we will not compromise the quality of journalism that we have always delivered to our readers, listeners and viewers.''