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Trinity Mirror boss faces investor rebellion over £1m pay deal

Shareholders to demand Sly Bailey takes pay cut to reflect slump in newspaper group’s share price

Sly Bailey, head of Trinity Mirror, publisher of the Daily Mirror, has become the target of one of the biggest shareholder rebellions of recent years, as investors demand she take a pay cut to reflect a massive slump in the share price.

Leading shareholders told the Guardian Bailey must “significantly” reduce the value of her pay, bonus and pension awards, which topped nearly £1.7m in 2010 and could reach at least £1m in 2011.

Investors are furious Bailey has collected around £12.5m during her nine years at the helm, during a period when the share price has plunged 87% as a result of reduced circulation and a decline in advertising revenue.

One pension fund manager said: “Politicians should take note: Bailey is effectively being rewarded for failure if you take account of the bombed-out share price. This is precisely what ministers have been saying shouldn’t happen in their exhortations to managers to be sensible when it comes to how much they pay themselves.”

Investors intend to raise the issue with chairman-designate David Grigson, a former Reuters finance director, when he gets together with shareholders for a series of interviews in February. Trinity declined to comment about shareholder discontent, beyond confirming that meetings between Grigson, together with current chairman Sir Ian Gibson, and leading investors will begin shortly.

The National Union of Journalists joined in the condemnation of Bailey, slating what it described as “sky-high executive pay” at Trinity, which on Wednesday announced that 75 jobs would be lost on its national titles, which include the Sunday Mirror and the People.

A union spokesman said: “The cull comes after the total directors’ pay and pensions bill for Trinity Mirror last year was £3.9m – £1.3m of which was cash bonuses. However, the share price for Trinity Mirror today is 49p, whereas 12 months ago it was 90p. Trinity has fallen out of the FTSE 100 and no longer pays a dividend.

Although Bailey’s basic salary has been frozen since 2008 at £750,000, bonuses, shares and pension contributions took her total pay up to more than £1.6m in 2010. Results for last year are yet to be announced, but Bailey is expected to have earned at least £1m including pension awards.

Shareholders are incensed about what they see as “the disconnect” between Bailey’s performance and her pay. One top investor described her remuneration as “simply not justifiable given the circumstances the company now finds itself in”.

The company is not the only media firm to have been hit by the growth of the internet and drift of advertising to the web, but Trinity’s shareholders are nevertheless determined to make their views known at the annual meeting in May, where a large number intend to vote against the remuneration report.

When Bailey joined Trinity in February 2003 the company’s share price was about 390p, giving it a market capitalisation of £1.1bn. Today the publisher is valued at just £120m.

As part of Trinity’s latest cost-cutting programme, the company is making radical changes to reporting and production activities for the three titles, which currently have separate operations. This involves a partial merging of reporting and production into a seven-day rota.

However, Trinity said each paper will continue to have “a bespoke editorial team” to “protect their unique identity”. The company also plans to increase the number of pages outsourced to the Press Association for sub-editing.

The Daily Mirror’s editor, Richard Wallace, will take on management responsibility for the merged “content and production hub” in addition to his current role.

Wallace, Sunday Mirror editor Tina Weaver and her People counterpart Lloyd Embley will continue to report to Mark Hollinshead, managing director of Trinity Mirror’s national division.

“[The] restructuring proposals for its UK national titles represent the next stage in [our] aim to create one of the most technologically advanced and operationally efficient multimedia newsrooms in Europe,” Trinity Mirror said. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds