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Journal Communications Inc Message Board

  • s5tuck s5tuck Dec 10, 2005 11:15 AM Flag

    Big bonuses for Emmis employees

    The former parent company of KGUN-TV Channel 9 is giving station employees a surprisingly nice parting gift: three months' pay.
    The bonus, which company officials said in a memo is their way of thanking employees for sticking with them through the months-long sales process, is highly unusual, some say.
    "I've never heard of such a thing," said Thomas Bates, an assistant professor with the University of Arizona's Eller College of Management.
    Bates, who specializes in corporate finance, said it is common for companies to give executives a "golden parachute" after a buyout, but it's unusual to pass those perks to employees lower on the rung
    When Pulitzer Inc., owner of the Arizona Daily Star, was sold to Lee Enterprises in June, only top executives were set to receive retention bonuses totaling about $4 million, according to a Security and Exchange Commission filing. General employees didn't receive any bonuses.
    Every employee of KGUN � from the sales staff to on-air talent � will get the bonus from Emmis Communications Corp., which officially closed its sale of the station on Monday. The Indiana-based company announced it was selling 13 of its 16 stations to four buyers in August.
    Channel 9, along with stations in Fort Myers, Fla., and Omaha, Neb., went to Milwaukee-based Journal Broadcast Group, which owns Tucson radio stations Mix-FM, KMXZ (94.9-FM); The Point, KZPT (104.1-FM); Mega Oldies, KGMG (106.3-FM and 104.9-FM); and The Fan, KFFN (1490-AM). The sale was for $235 million.
    Emmis officials notified employees last Thursday, KGUN General Manager Ray Depa said. He said some employees have told him they plan to use the money to buy homes or take dream vacations.
    "People had tears in their eyes," Depa said.
    Bonuses will start at about $4,500 and could get as large as $30,000 or more at KGUN, said accountant Vickie Duprey. Emmis said it expects to pay out more than $15 million in bonuses.
    Bates said companies sometimes tell their employees of possible bonuses as a catalyst to boost production and, in turn, the sale of the business. But though Emmis employees were told they would get some type of bonus after the sale, they weren't told how big it would be.
    A typical holiday bonus for KGUN employees is $200, said Janet Robinson, Depa's assistant.
    Photographer Alfonzo Sahagen said he expected about $400. He said he'll actually get closer to $5,000, so he's planning to take flight lessons.
    The jolly mood the day of the announcement was impossible to miss, said anchor Jennifer Waddell.
    "Everyone had a perma-grin," she said as large smile spread across her face.
    Bates said the bonuses � and the happy feelings that come with them � could be an incentive for employees who are still with the company.
    "That's a really strong signal about how much your company cares about you," he said.
    Plus, it sends a message that if Emmis profits, it will share and that people will be taken care of even if they are let go, Bates added.
    Bates said $15 million sounds like a lot of money, but in the midst of buyouts that have already earned more than $680 million for Emmis, it's a small price to pay for loyalty and good will.
    Shareholders are unlikely to get upset, even though Emmis is selling the companies to pay off debt, because a few executives didn't get a huge chunk of cash, Bates said. Plus, loyal workers can mean a better product and higher yields down the road.

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