When Janet Robinson, former CEO of the New York Times Company (NYSE: NYT), left in December with a $23.7 million severance package, the news firm said it would find a new CEO. Bloomberg reported that the company retained search firm Spencer Stewart in March. Apparently, the search has focused on an external candidate. The company must not have a very deep bench.
The acting CEO since Robinson left has been chairman Arthur Ochs Sulzberger, Jr. He not only chairs the board, but is the primary voice for his extended family, who control the board through a trust. That makes Sulzberger the chairman, CEO and the standard-bearer of his kin. The fortunes of the company now rest with him exclusively. He has not said anything about how he plans to better Robinson’s performance, which leaves the balance of shareholders to guess.
Most governance experts frown on one person having such broad power as Sulzberger has. The nonexecutive chairman of a public company is supposed to be, among other things, a counterweight to and evaluator of the CEO’s activities. This philosophy has been written about on a number of occasions in the New York Times business section. However, it is not in practice at the company.
The more time Sulzberger spends as the company’s CEO, the more likely it is that he will keep the job. His short-term tenure has not gone very well, at least as far as stockholders are concerned. Shares of company are down 10% so far this year, while the S&P is 7% higher over the same period. That is not much of a performance for a CEO, even if he is temporary.
Presumably Robinson was pushed out of her job because she could not set a firm and successful strategy to replace the company’s shrinking print revenue with digital sales. As a matter of fact, online revenue has not grown at all recently. If that trend cannot be reversed, neither can the fortunes of the company as a whole. Sulzberger, who might have shared his digital strategy with his shareholders, has not. He should be expected to mention his plans, even if his tenure is only temporary. The firm cannot wait another several months to establish a new program to gain online revenue.
Sulzberger is likely the current and future CEO of the New York Times Company. But he has done almost nothing to assure shareholders he has any idea about how to improve the company’s fortunes.
Douglas A. McIntyre