Folk hero in-the-making

CEO Mary Junk‘s frankly absurd bonus of $700,000 for [yet again] refinancing an $800 million debt has led a long-time employee at Lee Enterprises’ most storied newspaper Lee’s St. Louis operation to quit in protest. Post-Dispatch columnist Bill McClellan (as passed along at Jim Romenesko) recounts the story of resigning carpenter Scott Bujnak:

Workers have suffered while the big bosses have prospered. Pensions were long ago frozen. Mandatory unpaid furloughs were introduced. Layoffs were the worst. Families were ravaged. Yet, it was the small things that got to Bujnak…

Who will play Bujnak in the movie version? Too soon to say. But for now there’s a folk song developing, which begins

Scott Bujnak

Scott Bujnak

“Twas the straw that broke the camel’s back”… 

Sez disgusted lead carpenter Scott Bujnak…

Another bonus for old Mary Junck…

Somep’n, somep’n…

Rhymes with clunk…

It’s a work-in-progress

People respect honest work, and Ms. Junck collecting outsize bonuses for simply doing another refinancing is neither honest nor fair. It’s demoralizing to everyone below her in the organization. That Ms. Junk has continued to accept these awards-fer-doing-nuthin’-special is nice for her, but is in every other way bad for morale and bad for business. In fact, we’ll go further. The only way we can understand these bonuses for Junk and her chief financial officer is that they aren’t planning for the enterprise to survive, at least not with them at the helm, and they are instead looting in plain sight taking profits, now, while they still can.

Lee executive bonuses draw criticism

You can readily see why Lee newspaper executives dislike having unionized employees. They’re so outspoken. Unreasonable, too.

The head of the union that represents reporters and other workers at the [Lee-owned] St. Louis Post-Dispatch says employees of Lee Enterprises – rather than its chief executives – deserved bonuses…

…employees hadn’t had a raise since June 6, 2008. Since then, employee costs have increased “for the worst company health insurance we’ve ever had.” Sorkin went on to point out that retiree health and life insurance were gone, pensions frozen, and for new employees there are no pensions.

A bitter, unsuccessful strike finished off the newspaper unions here in Madison over 30 years ago, so there’s less outspoken grumbling.

More bad news for news — the looting continues reports the latest out of Lee Enterprises, Inc.

Mary JunckMary Junck, CEO of Lee Enterprises, has once again been awarded a financial bonus ($700,000) for doing utterly routine work. She — or more likely, accountants brought on temporarily — have restructured Lee Enterprises’ corporate debt. Again. Wow.

(Note: Lee Enterprises owns the Wisconsin State Journal, Madison’s last remaining daily).

If managing corporate debt is somehow not within Ms. Junck’s ordinary job description, we cannot imagine what is. And yet, here she receives another gigantic bonus for doing what’s expected. We’ve griped about this kind of LOOTING before. It’s shocking to the conscience. Why should these Lee executives be specially rewarded for doing a re-fi?

Meanwhile, the working journalists at Lee Newspapers get nothing.

Romenesko’s FaceBook page has comments.

Warren Buffett doubles his stake in Lee Enterprises

The St. Louis Post-Dispatch reports good news for Lee Enterprises’ valuation. Warren Buffett now owns about 6% of shares outstanding.

Lee’s shares jumped nearly 20 percent on the news Wednesday, closing at $1.59, up 26 cents.

Lee Enterprises, Inc., headquartered in Davenport, Iowa, owns over 50 newspapers including the Wisconsin State Journal.

LEE stock is way down from $45/share in 2005. However, the Post-Dispatch article includes this as a partial explanation of why Buffett might be buying now:

 …newspapers still turn out operating profits equaling 10 percent or more of revenues, notes long time newspaper industry analyst John Morton. “There are industries that never expect 10 percent margins in the best of times, and newspapers are doing it in their worse times,” he said.

That combination of low stock prices and respectable margins are what attracts Buffett, says Morton. Lee Enterprise’s operating margin is 14 percent, according to a recent SEC filing.

Would Buffett like to own Lee? “It wouldn’t surprise me,” said Morton.

Lee newspaper columnist writes about CEO Mary Junck

With career-threatening candor, Bill McClellan, a columnist still employed at the Lee-owned St. Louis Post Dispatchwrites about his recent social interaction with the company’s CEO, Mary Junck. Like many of us, he’s a little slow but invariably polite in social situations:

“Hello,” she said. “Aren’t you Bill McClellan?”

I am, I said.

“I’m Mary Junck,” she said.

They didn’t discuss work! It was, after all, a summer party. Bill is more candid when he’s at a keyboard:

I have written about Junck before, and not warmly. Last September, when Lee announced a round of layoffs at this newspaper, I wrote that while the workers were facing uncertain futures, Junck seemed to be like the banks — too big to fail.

If that sort of thing bothered her, she didn’t let on. Not when I wrote it, not at the party.

The fact is, Ms. Junck, by the actual evidence, is dismantling the business she nominally “leads”: She’s cutting staff and has pocketed over a million dollars (in bonus pay this year) for doing it.

McClellan says he’s a Lee stockholder. It makes you wonder how many Lee employees hold Lee stock in their 401k’s. What do they say to each other when the job-slashing CEO is rewarded, gifted, incentivized (what IS the word) with another half-million shares ($655,000)?

The company’s executive compensation committee said stockholders would benefit from linking her compensation to the value of the company’s stock.

As a stockholder, I hope so. When Lee bought Pulitzer Inc. in 2005, Lee stock was at $44.55. It closed Friday at $1.26. Junck has been CEO for all that time.

By the way, her $500,000 bonus in March was for steering the company out of bankruptcy.


Lee Newspaper CEO banks yet another $655,000

This can’t be true, can it? Lee Newspapers has awarded its CEO, Mary Junck, a second whopping-big financial award this year.

The official filing tells us the Lee Enterprises Executive Compensation Committee concluded that Ms. Junck’s compensation “was substantially below that of her peers in the newspaper industry.”

Is this not corporate looting? Only a miraculous turnaround at Lee Newspapers would allow this to make sense.

News from Lee Enterprises

Regular visitors here will be interested in two bits of news about Lee Enterprises, Inc., parent company of the Wisconsin State Journal.

First, Lee Enterprises CEO receives a half-million dollar bonus for the difficult executive work of guiding Lee through its recent refinancing to emerge from bankruptcy. Meanwhile two Lee-owned Montana newspapers lay off actual working journalists. More here at Does it bother working journalists when top management is in position to loot the company damaging the whole enterprise?

Second, the St. Louis Post Dispatch, another Lee newspaper, reports that Lee intends to introduce paid subscriptions for online content in most of its markets by the end of 2012. We’ll say, right off, that we have no problem paying for online content if we want it enough. But then that’s always the problem, isn’t it.

Lee Enterprises, Inc.

Just a week ago Lee Enterprises, Inc., owner of the Wisconsin State Journalemerged from Chapter 11 bankruptcy. The LEE stock price immediately bounced back up over a dollar per share. That’s the good news.

The bad news is that Lee’s 1st quarter income dropped 23% from a year earlier.

Lee owns 48 daily newspapers, so it’s performance says almost nothing about specific performance at the Wisconsin State Journal.

One of the ironies of news purveyors is that they’re usually silent about their own stories. We assume there’s an unrelenting, low-grade sense of worry at nearly every newspaper.