Fairfax executive Lloyd Whish-Wilson has told journalistic staff that he is disappointed their union has made a pay demand “so patently at odds with the capacity of the mastheads to pay.”
Where could the journalists have learned to be so greedy?
Let’s look at the remuneration of those at the very top of the company.
These figures are drawn from page 51 of the 2007 annual report (www.fxj.com.au) — click on the picture for a larger version:
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Plus David Kirk, the Managing Director, on page 50.
Do the maths, and one finds that between 2006 and 2007, the top executives in the company were rewarded with a stunning 45% increase in bonuses alone. The total in bonuses for the top eight went from $1.5 million to $2.2 million over the period.
Add to this another 7.7% total increase in salaries for the top people. Note that this does not take into account the shares they were given, or increases in superannuation payments. Nor does it look at the substantial increases in packages for board members.
Within the overall figures are some interesting particulars. Captain Kirk, for example, almost doubled his superannuation pay over the period. Fairfax General Counsel Gail Hambly increased her bonus by almost three times, as well as taking a big boost in superannuation. Her total package went up from $687,136 to $900,649.
Poor old Victorian CEO Don Churchill, on the other hand, dropped both salary and bonuses. Perhaps he needs a union.
It should be noted that the total figures are complicated by the fact that some senior staff left and others joined, but the trend for double digit percentage increases in remuneration is nevertheless clear.
Now the union demand, which of course will have ambit built in, is for 5% on 1 July this year, and another 5% on 1 July 2009. Right.
Here is some very basic back-of-the-envelope figuring. Take the salary and bonus increases (only the increases) over the period among these top executives, and imagine they had been distributed to the 700 odd journalists employed in Sydney and Melbourne. If we assume the journos are on an average salary of $70,000 (and yes I know that figure is open to dispute and there are highs and lows within it) the distribution would, by itself, add up to an average 2% salary increase.
If we took the total bonuses for 2007, and distributed them in the same way, then it adds up to a 4.5% salary increase for the journos.
And this is just the top eight people in the company. My information from inside management is that about 40 managers at the Sydney Morning Herald, The Age, the Australian Financial Review and Fairfax Digital get bonuses. We could estimate that the total cash bonus bill for Fairfax managers is probably around $3 million a year.
Meanwhile the total editorial merit bonus pool for the Sydney Morning Herald and The Age, I am told, is around $300,000 — less than a tenth of that for the top eight.
Now the executives would doubtless argue that the bonuses are really fair reward for doing their jobs well, rather than “extra”.
The journalists may well argue similarly. After all, management never stops boasting about the quality of the journalism.
And it will be interesting to see what happens to the bonuses in the financial year just past, given that the share price has been plunging.
Meanwhile Fairfax management often claims to be investing in journalism.