When Janet Robinson, the former CEO of the New York Times Company (NYSE: NYT) was pushed out of office last December, the corporation that owns the New York Times said it would find a replacement. Over four months later, there are no signs or rumors that the search has borne fruit, or that it ever will. That is because the company already has a de facto CEO — Arthur Sulzberger Jr., the long-time chairman whose family controls the corporation through a series of trusts.
The “1997 Trust,” set up by members of the founding family, holds 90.3% of the company’s Class B shares, which gives them complete control over the New York Times Company.
The board member most likely to press for an independent CEO is Ellen Marram, the company’s presiding director since 2006. She is the president of the Barnegat Group, a small business advisory firm. But Marram is hardly in a position to exercise what would normally be the role of presiding director because of the lock that the Sulzberger family and its relatives have on the board’s decisions. Marram’s position is largely ceremonial.
In most cases, shareholders would be upset that a company like the Times has not replaced its CEO. But those who own the stock should count themselves as lucky. Robinson did not have the power that a CEO traditionally does. That means that the Times had two leaders — Robinson in name and Sulzberger in reality. Each was paid at the level a CEO might be. Sulzberger made $5.9 million last year. Robinson made $11.2 million, some of which was her “retirement” package.
The New York Times is not a large company. Among media firms, it is actually a small one. Its revenue last year was a little over $2.3 billion. Its profits have been very modest recently. The Times’ market cap is down to less than $1 billion, and the stock trades barely one million shares most days.
The Times does not need a new CEO because it already has one. Until recently, it paid two. Now the company can save some money because of the “1997 Trust” and its control over how the the New York Times Company is run.
Douglas A. McIntyre