UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
| ☒ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☐ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material under §240.14a-12 |
| (Name of Registrant as Specified In Its Charter) |
| (Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
Payment of Filing Fee (Check all boxes that apply):
| ☒ | No fee required. |
| ☐ | Fee paid previously with preliminary materials. |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
April [26], 2023
Dear Fellow Stockholders:
We are pleased to invite you to our Annual Meeting of Stockholders, which will be held on Monday, June 5, 2023, at 8:00 a.m. Eastern Time. The annual meeting will be conducted as a virtual meeting of stockholders by means of a live webcast. We believe that hosting a virtual meeting will enable greater stockholder participation from any location. You will be able to participate in the virtual annual meeting, vote your shares and submit questions during the annual meeting via the internet by visiting www.virtualshareholdermeeting.com/GCI2023. There will not be a physical meeting location and you will not be able to attend the annual meeting in person. As always, we encourage you to vote your shares prior to the meeting.
The matters to be considered by our stockholders at the annual meeting are described in detail in the accompanying materials. After consulting with outside experts and advisors, our board of directors decided to continue its efforts to strengthen our approach to governance and is again proposing several changes to our bylaws and certificate of incorporation to remove certain supermajority voting provisions, enhance stockholder rights and increase our board of director’s accountability. Implementation of these provisions requires the approval of holders of 80% of our common stock, and every vote matters.
Your vote is important. Whether or not you expect to participate in the annual meeting, please complete the proxy electronically or by phone as described on your proxy card and under “How do I vote?” in this proxy statement, or please complete, date, sign and promptly return the proxy card in the enclosed postage-paid envelope so that your shares may be represented at the annual meeting. Returning or completing the proxy does not deprive you of your right to participate in the annual meeting and to vote your shares.
Please note that you must follow these instructions in order to participate in and be able to vote at the annual meeting: All stockholders as of the close of business on April 13, 2023, the record date, may vote and ask questions at the annual meeting by accessing www.virtualshareholdermeeting.com/GCI2023 and entering the 16-digit unique control number found on the proxy card or voting instruction form included with the proxy materials. In addition, any stockholder may also be represented by another person at the annual meeting by executing a proper proxy designating that person as the proxy with power to vote your shares on your behalf. We encourage you to vote using the internet, as it is the most cost-effective way to vote. Even if you have voted by internet, telephone or proxy card, you may still vote via the internet if you participate in the virtual annual meeting. For assistance in voting your shares, please contact our proxy solicitor MacKenzie Partners, Inc., toll-free at (800) 322-2885, collect at (212) 929-5500 or at proxy@mackenziepartners.com or our Investor Relations department at investors@gannett.com or (703) 854-3000.
If you are not the holder of record and own your shares through a brokerage firm, bank, broker-dealer, nominee, custodian or fiduciary (each, a “broker”), we encourage you to follow the instructions provided by your broker about how to vote. Unless you provide your broker with voting instructions, your broker is not required to represent you at the annual meeting and even if they do, they cannot vote your shares on any proposal, except the ratification of our auditors.
Sincerely,
Michael E. Reed
Chairman of the Board of Directors
NOTICE OF THE 2023 ANNUAL MEETING OF STOCKHOLDERS OF GANNETT CO., INC.
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WHEN:
Monday, June 5, 2023 8:00 a.m. Eastern Time
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The principal business of the 2023 Annual Meeting of Stockholders (the “Annual Meeting”), as described in the accompanying proxy materials will be:
(1) Election of nine director nominees to serve until the 2024 annual meeting of stockholders and until their respective successors are elected and duly qualified;
(2) Ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for fiscal year 2023;
(3) Approval, on an advisory basis, of executive compensation;
(4) Approval of our 2023 Stock Incentive Plan;
(5) Approval of an amendment to our Amended and Restated Certificate of Incorporation, as amended (the “Charter”) to reflect new Delaware law provisions regarding officer exculpation;
(6) Approval of an amendment to our Amended and Restated Bylaws (the “Bylaws”) to implement majority voting in uncontested director elections;
(7) Approval of amendments to our organizational documents eliminating certain supermajority voting provisions, namely:
A. Eliminating the supermajority voting requirement to amend certain provisions of our Charter;
B. Eliminating the supermajority voting requirements to amend our Bylaws; and
C. Eliminating the supermajority voting requirements to remove directors and to appoint directors in the event that the entire Board of Directors of the Company is removed; and
(8) Any other business properly presented at the Annual Meeting or any adjournment or postponement thereof.
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WHERE:
Online via: www.virtualshareholdermeeting.com/GCI2023
There will not be a physical meeting location and you will not be able to attend the Annual Meeting in person.
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RECORD DATE:
Only stockholders of record at the close of business on April 13, 2023 will be entitled to notice of and to vote at the Annual Meeting.
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON JUNE 5, 2023:
The Notice of Annual Meeting, Proxy Statement and the Annual Report are available at http://materials.proxyvote.com/36472T
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Proposals 6 and 7 are intended to promote stockholder democracy and increase the Board’s accountability to stockholders. These proposals require approval by a supermajority of the outstanding shares, so it is extremely important that your shares be represented at the Annual Meeting, regardless of the size of your holdings. Whether or not you expect to attend the Annual Meeting, please complete the proxy electronically or by phone as described on your proxy card and under “How do I vote?” in the proxy statement, or complete, date, sign and promptly return the proxy card in the enclosed postage-paid envelope so that your shares may be represented at the Annual Meeting. If you are not the holder of record and own your shares through a brokerage firm, bank, broker-dealer, nominee, custodian or fiduciary (each, a “broker”), we encourage you to follow the instructions provided by your broker about how to vote.
By Order of the Board of Directors,
Polly Grunfeld Sack
Chief Legal Officer
Gannett Co., Inc. 2023 Annual Meeting of Stockholders
VOTE YOUR SHARES
HOW TO VOTE
Your vote is very important, and we hope that you will participate in the Annual Meeting. You are eligible to vote if you were a stockholder of record at the close of business on April 13, 2023. Please read the proxy statement and vote right away using any of the following methods.
Stockholders of Record:
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VOTE BY INTERNET BEFORE OR DURING THE MEETING
Visit: www.proxyvote.com
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VOTE BY TELEPHONE
Call 1-800-690-6903 to vote by phone
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VOTE BY MAIL
Sign, date, and return your proxy card in the enclosed envelope.
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Beneficial Stockholders:
If you are a beneficial stockholder, you will receive instructions from your brokerage firm, bank, broker-dealer, nominee, custodian, fiduciary or other nominee that you must follow in order for your shares to be voted.
Assistance:
For assistance in voting your shares, please contact our proxy solicitor MacKenzie Partners, Inc. toll-free at (800) 322-2885, collect at (212) 929-5500 or at proxy@mackenziepartners.com or our Investor Relations department at investors@gannett.com or (703) 854-3000.
TABLE OF CONTENTS
Cautionary Note Regarding Forward Looking Statements:
This proxy statement includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our environmental, social, and governance goals, our commitments, and our strategies. Words such as “expect(s),” “intend(s),” “plan(s),” “target(s),” “believe(s),” “will,” “may,” “aim,” “seek(s),” “strive(s)” and similar expressions are intended to identify such forward-looking statements. These statements are based on management’s current expectations and beliefs, are not a guarantee of future performance, and involve and are subject to a number of known and unknown risks, uncertainties, and other factors that could lead to actual results materially different from those described in the forward-looking statements. We can give no assurance our expectations will be attained. For a discussion of some of the risks and important factors that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time in the Company’s most recent reports on Form 10-K and Form 10-Q and other filings with the Securities and Exchange Commission (the “SEC”). Such forward-looking statements speak only as of the date they are made. Except to the extent required by law, we expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or change in events, conditions, or circumstances on which any statement is based.
GANNETT CO., INC.
7950 Jones Branch Drive, McLean, VA 22107-0150
Proxy Statement for the 2023 Annual Meeting of Stockholders
to be Held on June 5, 2023
| PROXY STATEMENT SUMMARY |
| To assist you in reviewing the proposals to be considered and voted upon at our Annual Meeting of Stockholders (the “Annual Meeting”) to be held on June 5, 2023, we have summarized information contained elsewhere in this proxy statement or in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “Annual Report”). This summary does not contain all of the information you should consider about Gannett Co., Inc. (“we,” “our,” “us,” “Gannett,” or the “Company”) and the proposals being submitted to stockholders at the Annual Meeting. We encourage you to read the entire proxy statement and Annual Report carefully before voting. |
2023 Annual Meeting of Stockholders
| Date & Time | Location | Record Date |
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Monday, June 5, 2023 8:00 a.m. Eastern Time |
Online via: www.virtualshareholdermeeting.com/GCI2023 |
April 13, 2023 |
Meeting Agenda and Voting Matters
| Item | Proposal | Board Vote Recommendation |
Page Reference (for more information) |
| 1 | Election of nine director nominees named in this proxy statement | FOR each nominee | 14 |
| 2 | Ratification of the appointment of Grant Thornton LLP | FOR | 56 |
| 3 | Advisory vote on executive compensation (“say on pay”) | FOR | 59 |
| 4 | Approval of our 2023 Stock Incentive Plan | FOR | 61 |
| 5 | Approval of an amendment to our Amended and Restated Certificate of Incorporation, as amended (the “Charter”) to reflect new Delaware law provisions regarding officer exculpation | FOR | 72 |
| 6 | Approval of an amendment to our Amended and Restated Bylaws (the “Bylaws”) to implement majority voting in uncontested director elections | FOR |
74
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| 7 | Approval of amendments to our organizational documents eliminating certain supermajority voting provisions, namely: | ||
| A. Eliminating the supermajority voting requirement to amend certain provisions of our Charter | FOR | 77 | |
| B. Eliminating the supermajority voting requirements to amend our Bylaws | FOR | 77 | |
| C. Eliminating the supermajority voting requirements to remove directors and to appoint directors in the event that the entire board of directors is removed | FOR | 78 |
Director Nominees
| Name | Age | Recent Professional Experience | Committees | |
| Theodore P. Janulis* | 64 | Founder and Principal, Investable Oceans | AC, CC, NGC | |
| John Jeffry Louis III* | 60 | Co-Founder and Former Chairman, Parson Capital Corporation | CC, NGC, SRC | |
| Maria M. Miller* | 66 | Former Chief Marketing Officer, Bahamas Paradise Cruise Line | AC, NGC, SRC | |
| Michael E. Reed | 56 | Chief Executive Officer, Gannett Co., Inc. | — | |
| Amy Reinhard* | 48 | Vice President, Studio Operations and Consumer Products, Netflix, Inc. | AC, TC | |
| Debra A. Sandler* | 63 | President and Chief Executive Officer, La Grenade Group, LLC | NGC, TC | |
| Kevin M. Sheehan* | 69 | Chairman, Dave & Buster’s Entertainment, Inc. | AC, CC, SRC | |
| Laurence Tarica* | 73 | Former President and Chief Operating Officer, Jimlar Corporation | NGC, TC | |
| Barbara W. Wall* | 68 | Former Chief Legal Officer, Gannett Media Corp. | NGC, TC | |
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* AC CC NGC SRC TC |
— Independent Director Nominee — Audit Committee — Compensation Committee — Nominating and Corporate Governance Committee — Share Repurchase Committee — Transformation Committee |
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Who We Are
We are a subscription-led and digitally-focused media and marketing solutions company committed to empowering communities to thrive. We operate a scalable, data-driven media platform that aligns with consumer and digital marketing trends. We aim to be the premier source for clarity, connections, and solutions within our communities. Our mission is to provide unbiased, unique local and national content and unrivaled digital marketing solutions to the communities we serve. We seek to drive audience growth and engagement by delivering valuable content to our consumers, while offering the unique products and marketing expertise our advertisers desire. Our strategy prioritizes the growth of highly recurring digital businesses, while maximizing the lifetime value of our legacy print business, and we expect the execution of this strategy to enable us to continue our evolution to a digitally-focused content platform.
Company Governance Highlights
Operating Priorities. In 2022, we continued our commitment to a subscription-led business strategy that drives audience growth and engagement by delivering valuable content experiences to our consumers, while offering the products and marketing expertise our advertisers desire. The five key operating pillars of our strategy include: driving digital subscription revenue growth, driving digital marketing solutions growth by engaging more customers in recurring monthly revenue offerings, optimizing our traditional businesses across print and advertising, prioritizing investments in growth businesses, and building on our environmental, social and governance (“ESG”) focus to foster culture and community, both internally and externally.
Stockholder Outreach and Engagement. We regularly engage with our stockholders over the course of a year on diverse topics such as financial performance, executive compensation and pay for performance matters, corporate governance and corporate social responsibility. These meetings can be in person or via teleconference. During 2022, we held over 130 meetings with stockholders and attended nine conferences, while also engaging with our analysts on a quarterly basis at a minimum. In early 2023, we invited 25 of our investors (representing over 50% of our share ownership) to engage with us for a comprehensive update with respect to our governance efforts, including our transparency on our inclusion and diversity, our ESG initiatives, further alignment of our executive compensation to financial performance, the significant progress on debt paydown, and an update on progress against our long-term strategy.
We are committed not just to continued engagement with our shareholders, but to reviewing and applying the substance of the engagement. Management routinely reports to our board of directors (the “Board”) and specific Board committees on the substance and nature of our stockholder communications. This feedback was used to help shape our 2023 proxy statement disclosures and the re-inclusion of Proposals 6 and 7 to further promote stockholder democracy and increase the Board’s accountability to stockholders. These proposals require a supermajority of the outstanding shares and we have engaged MacKenzie Partners, Inc. to assist us in the solicitation of stockholder participation.
Detrimental Conduct Recoupment Policy. We have adopted a Detrimental Conduct Recoupment Policy (the “clawback policy”) which allows the Company to recover incentive compensation provided to the current and former employees of the Company and its subsidiaries and affiliates, in certain circumstances. We believe the clawback policy will maintain and enhance a culture that is focused on integrity and accountability, and that seeks to discourage conduct detrimental to the Company’s long-term growth.
Board of Directors. The majority of our Board are considered independent directors of the Company. Our Board is composed of talented directors with diverse skill sets such as expertise in technology, cybersecurity, and financial reporting and each independent director is a member of at least two Board committees. Cyber and data security are priorities for us and our Board receives regular updates on Gannett’s cyber strategy, developments and results. We also believe ongoing evaluation and board refreshment are critical for the Company to execute its long-term strategy and maximize stockholder value. The Nominating and Corporate Governance Committee develops criteria for potential directors. In 2022, Amy Reinhard, Vice President, Studio Operations at Netflix, Inc., joined our Board as an independent director with significant experience across media and subscription-led businesses.
Inclusion, Diversity and Equity Efforts. Inclusion, Diversity and Equity are core pillars of our organization and influence all that we do, from recruiting, development and retention, to day-to-day operations including hiring, onboarding, education, leadership training and professional development. In early 2023, we published our 2022 Inclusion Report which highlighted our inclusion, diversity, and equity efforts. The 2022 Inclusion Report outlined our current workforce diversity data, our inclusion goals that reach into 2025, as well as the steps we are taking to achieve our goals. We remain consistent, committed, and intentional in our quest to be a leader in Inclusion, Diversity and Equity. In 2022, we were recognized in the 2022 Best Places to Work for LGBTQ Equality. Also in 2022, for the fifth year in a row, we received a perfect score of 100 on the Corporate Equality Index, the nation’s premier benchmarking survey and report measuring corporate policies and practices related to LGBTQ workplace equality and inclusion.
ESG Initiatives. As a leading media organization, our longstanding corporate social responsibility position is driven by our deep commitment to our communities. We are dedicated to ensuring that we have mindful and ethical business practices that positively impact our world. In early 2023, we published our 2023 ESG Report detailing the progress we made on our U.N. Sustainable Development Goals (“U.N. SDGs”) that include Reduced Inequalities, Climate Action, and Peace, Justice & Strong Institutions. The 2023 ESG Report included noteworthy highlights such as improving our workplace diversity, expanding our systems infrastructure to provide Scope 1 and 2 emissions for our entire global carbon footprint and reducing the number of manufacturing facilities. Also, we recently published the inaugural edition of our network-wide 2022 Impact Report, which highlighted the most influential articles we produced in 2022 and covers topics such as coverage on inclusion, diversity, and equity, as well as climate change.
The well-being of all our employees is of paramount importance to us and we are committed to maintaining a corporate culture that conducts business in a responsible and ethical manner that includes promoting, protecting and supporting human rights across our operations and throughout our entire organization, which is why we have published a companywide Human Rights Policy. This policy expands upon an existing policy already enacted by our United Kingdom (“U.K.”) operations. Our Human Rights Policy covers areas such as our commitment to diversity and inclusion, a safe and healthy workplace, our communities and stakeholders, and freedom of association and collective bargaining, which ensures our employees’ right to form and choose whether to join a labor union without fear of reprisal, intimidation, or harassment. The policy also reflects our commitment to bargaining in good faith with chosen representatives of such groups in accordance with applicable laws.
Director Nominees Skills and Attributes
We believe that our director nominees possess the requisite experience and skills necessary to carry out their duties and to serve our best interests and those of our stockholders.
Number of Director Nominees displaying Key Competencies and/or Profiles
For more information regarding our directors, director nominees, and our corporate governance, see “Proposal No. 1 – Election of Directors” and “Environmental, Social and Governance Matters.”
GENERAL INFORMATION
Why am I receiving these proxy materials?
These proxy materials are being furnished to you in connection with the solicitation of proxies by our Board for the 2023 Annual Meeting of Stockholders of Gannett Co., Inc. to be held on Monday, June 5, 2023 at 8:00 a.m. Eastern Time, and at any adjournment or postponement thereof. The Annual Meeting will be conducted as a virtual meeting of stockholders by means of a live webcast. We believe that hosting a virtual meeting will enable greater stockholder participation from any location. There will not be a physical meeting location and you will not be able to attend the Annual Meeting in person.
We made our proxy materials available to stockholders via the internet or in printed form on or about April [26], 2023. Our proxy materials include the Notice of the Annual Meeting, this proxy statement, and our Annual Report. These proxy materials, other than the proxy card which is available with the printed materials, can be accessed at http://materials.proxyvote.com/36472T. A proxy may confer discretionary authority to vote with respect to any matter presented at the Annual Meeting.
What am I voting on?
At the Annual Meeting, you will vote on:
| 1) | the election of nine director nominees to serve until the 2024 annual meeting of stockholders and until their respective successors are elected and duly qualified; |
| 2) | a proposal to ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for fiscal year 2023; |
| 3) | a proposal to approve, on an advisory basis, the Company’s executive compensation (“say on pay”); |
| 4) | a proposal to approve our 2023 Stock Incentive Plan; |
| 5) | a proposal to approve an amendment to our Charter to reflect new Delaware law provisions regarding officer exculpation; |
| 6) | a proposal to amend our Bylaws to implement majority voting in uncontested director elections; and |
| 7) | proposals to eliminate certain supermajority voting provisions from our organizational documents, namely: |
| A. | a proposal to eliminate the supermajority voting requirement applicable to the amendment of certain provisions of our Charter; |
| B. | a proposal to eliminate the supermajority voting requirements applicable to the amendment of our Bylaws; and |
| C. | a proposal to eliminate the supermajority voting requirements applicable to remove directors and to appoint directors in the event that the entire Board is removed. |
Will there be any other items of business addressed at the Annual Meeting?
As of the date of this proxy statement, we are not aware of any other matter to be presented at the Annual Meeting. If any other matter is properly brought before the Annual Meeting, the proxy holders will vote for you on such matter in their discretion.
What must I do if I want to participate in the Annual Meeting?
By visiting www.virtualshareholdermeeting.com/GCI2023 and signing in with your unique control number, you will be able to participate in the Annual Meeting, vote your shares and ask questions during the meeting. Guests who are not stockholders are welcome to join the virtual meeting but will be restricted to listen-only mode. If you encounter technical difficulties accessing our Annual Meeting, a support line will be available on the login page of the virtual meeting website shortly before the beginning of the Annual Meeting.
As always, we encourage you to vote your shares prior to the Annual Meeting. This proxy statement furnishes you with the information you need in order to vote, whether or not you participate in the Annual Meeting.
Who may vote at the Annual Meeting?
If you owned shares of our common stock at the close of business on April 13, 2023, which is the record date for the Annual Meeting, then you are entitled to vote your shares at the meeting. At the close of business on the record date, we had [●] shares of common stock outstanding and entitled to vote. Each share is entitled to one vote on each proposal.
Stockholders who have not voted their shares prior to the Annual Meeting or who wish to change their vote will be able to vote their shares electronically at the Annual Meeting while the polls are open.
How do I vote?
Telephone and internet voting are available through 11:59 p.m. Eastern Time on June 4, 2023 using the 16-digit unique control number included on your proxy card or in the instructions that accompanied your proxy materials. Whether you are a stockholder of record or a beneficial owner, you can submit a proxy for your shares by internet at www.proxyvote.com. Stockholders of record can also submit a proxy for their shares by calling 1-800-690-6903.
You can also submit your proxy by mail by completing, signing, dating the proxy card and returning it in the pre-paid enclosed envelope so that it is received prior to the Annual Meeting. In addition, you may vote your shares during the Annual Meeting if you log into the meeting using your unique control number.
If you are a beneficial stockholder, you will receive instructions from your brokerage firm, bank, broker-dealer, nominee, custodian, fiduciary or other nominee that you must follow in order for your shares to be voted. Many such firms make telephone or internet voting available, but the specific processes available will depend on those firms’ individual arrangements.
We encourage you to vote as soon as possible, even if you plan to participate in the Annual Meeting. Your vote is important and for all items other than ratification of the appointment of our independent registered public accounting firm, if you hold shares in street name, your shares will not be voted by your brokerage firm, bank, broker-dealer, nominee, custodian, fiduciary or other nominee if you do not provide voting instructions.
For assistance in voting your shares, please contact our proxy solicitor MacKenzie Partners, Inc. toll-free at (800) 322-2885, collect at (212) 929-5500 or at proxy@mackenziepartners.com or our Investor Relations department at investors@gannett.com or (703) 854-3000.
What is the difference between a stockholder of record and a beneficial owner of shares held in street name?
Stockholder of Record. If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company LLC, you are considered the stockholder of record with respect to those shares, and we sent the printed proxy materials (including your 16-digit unique control number) directly to you.
Street Name Holders. If your shares are held in an account at a brokerage firm, bank, broker-dealer or other similar organization (which is referred to as holding shares in “street name”), then the broker, nominee, custodian, or fiduciary (each, a “broker”) is considered the stockholder of record for purposes of voting at the Annual Meeting, and the printed proxy materials will be forwarded to you by the broker. As the beneficial owner of the shares, you have the right to instruct your broker on how to vote the shares held in your account. If you are not the holder of record and own your shares through a broker, we encourage you to follow the instructions provided by your broker about how to vote.
What happens if I do not give specific voting instructions?
If you are a stockholder of record and you indicate when voting over the internet or by telephone that you wish to vote as recommended by our Board or sign and return a proxy card without giving specific voting instructions, then the proxy holders will vote your shares in the manner recommended by our Board on all matters presented in this proxy statement and as the proxy holders may determine in their discretion with respect to any other matters properly presented for a vote at the Annual Meeting.
If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, then a “broker non-vote” occurs. In that case, the broker has discretionary authority to vote your shares on Proposal 2 with respect to the ratification of the selection of Grant Thornton LLP as our independent registered public accounting firm (because it is considered a “routine” proposal under the rules of the New York Stock Exchange (“NYSE”)), but cannot vote your shares on any other matters being considered at the Annual Meeting (because they are considered non-routine proposals under NYSE rules). When our inspector of election tabulates the votes for any particular matter, broker non-votes will be counted for purposes of determining whether a quorum is present, but will not otherwise have an effect on Proposals 1, 3, 4 and 5 and will count as a vote “Against” with respect to Proposals 6, 7A, 7B and 7C. We therefore encourage you to provide voting instructions on each proposal to the organization that holds your shares.
What constitutes a quorum for the Annual Meeting?
The presence, in person or by proxy, of the holders of a majority of the shares of common stock outstanding on the record date will constitute a quorum to conduct business at the Annual Meeting. Shares held by an intermediary, such as a brokerage firm, bank, broker-dealer or other similar organization, that are voted by the intermediary on any or all matters will be treated as shares present for purposes of determining the presence of a quorum. Abstentions, broker non-votes, and “withhold” votes for election of directors also will be counted for the purpose of determining the existence of a quorum. If a quorum is not present, the Annual Meeting may be adjourned by the vote of a majority of the shares represented at the Annual Meeting until a quorum has been obtained.
What vote is required to approve each proposal and how does the Board recommend that I vote?
The vote required to approve each proposal and the Board’s recommendation with respect to each proposal are described below.
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Proposal |
Board Recommendation |
Votes Required |
Effect of Abstentions | Effect of Broker Non-Votes | |
| 1. | Election of nine director nominees | FOR each nominee | Plurality of votes cast (1) | None | None |
| 2. | Ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for fiscal year 2023 | FOR | Majority of shares present and entitled to vote thereon | Same effect as vote cast against proposal |
Not applicable since this proposal is a routine matter on which brokers may vote
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| 3. | Advisory vote on executive compensation | FOR | Majority of shares present and entitled to vote thereon (2) | Same effect as vote cast against proposal | None |
| 4. | Approval of our 2023 Stock Incentive Plan | FOR | Majority of shares present and entitled to vote thereon | Same effect as vote cast against proposal | None |
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Proposal |
Board Recommendation |
Votes Required |
Effect of Abstentions | Effect of Broker Non-Votes | |
| 5. | Approval of an amendment to our Amended and Restated Certificate of Incorporation, as amended (the “Charter”) to reflect new Delaware law provisions regarding officer exculpation | FOR | Majority of shares present and entitled to vote thereon | Same effect as vote cast against proposal |
None
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| 6. | Approval to implement majority voting in uncontested director elections |
FOR |
80% of outstanding shares
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Same effect as vote cast against proposal
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Same effect as vote cast against proposal |
| 7A. | Approval to eliminate the supermajority voting requirement to amend certain provisions of our Charter |
FOR
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80% of outstanding shares
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Same effect as vote cast against proposal
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Same effect as vote cast against proposal |
| 7B. | Approval to eliminate the supermajority voting requirements to amend certain provisions of our Bylaws |
FOR
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80% of outstanding shares
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Same effect as vote cast against proposal |
Same effect as vote cast against proposal |
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Proposal |
Board Recommendation |
Votes Required |
Effect of Abstentions | Effect of Broker Non-Votes | |
| 7C. |
Approval to eliminate the supermajority voting requirements to remove directors and to appoint directors in the event that the entire Board is removed |
FOR |
80% of outstanding shares
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Same effect as vote cast against proposal |
Same effect as vote cast against proposal |
| (1) | A “withhold vote” will have no effect on the vote’s outcome, because the nominees who receive the highest number of “for” votes are elected, and since the nominees are running unopposed they only need a single “for” vote to be elected. |
| (2) | The results of the advisory vote on executive compensation are not binding on our Board or our Compensation Committee. However, our Board and Compensation Committee value the opinions expressed by our stockholders in their votes on this proposal and will consider the outcome of the vote when making future compensation decisions regarding our named executive officers. |
In addition, if you grant a proxy, your shares will be voted in the discretion of the proxy holder on any proposal for which you do not register a vote and any other business that properly comes before the Annual Meeting or any adjournment or postponement thereof.
How can I obtain a stockholder list?
A stockholder list will be available for examination by our stockholders at our principal executive offices at 7950 Jones Branch Drive, McLean, VA 22107-0150 during ordinary business hours throughout the ten-day period prior to the Annual Meeting and during the Annual Meeting via the virtual meeting site for any purpose germane to the meeting.
Can I change or revoke my vote?
If you are a stockholder of record, you may revoke your proxy through any of the following methods:
| ● | send timely written notice of revocation to our Chief Legal Officer at Gannett Co., Inc., 175 Sully’s Trail, Pittsford, NY 14534; |
| ● | properly complete, sign, date and mail a timely new proxy card to the address above; |
| ● | dial the number provided on the proxy card and timely vote again; |
| ● | log on to the internet site provided on the proxy card and timely vote again; or |
| ● | attend the Annual Meeting and vote again. |
Only your last-submitted, timely vote will count at the Annual Meeting. If you are a street name holder, you must contact your broker to receive instructions as to how you may revoke your proxy instructions.
We encourage you to vote in advance of the Annual Meeting to ensure your vote is counted should you be unable to participate in the Annual Meeting. Stockholders who have not voted their shares prior to the Annual Meeting or who wish to change their vote will be able to vote their shares electronically at the Annual Meeting while the polls are open. If you properly provide your proxy in time to be voted at the Annual Meeting, it will be voted as you specify unless it is properly revoked prior thereto. If you properly provide your proxy but do not include your voting specifications, the shares represented by the proxy will be voted in accordance with the recommendations of the Board, as described in this proxy statement.
Who is paying for this proxy solicitation?
The Board is soliciting proxies for use at the Annual Meeting, and we will bear the expense of preparing, printing and mailing the proxy materials and the proxies solicited hereby. Following the mailing of this proxy statement and other proxy materials, we and/or our agents may also solicit proxies by mail, telephone, electronic transmission, including email, or in person. In addition, proxies may be solicited by officers and directors, without additional remuneration, by personal interview, telephone or otherwise. Following the mailing of this proxy statement and other proxy materials, we will also request brokerage firms, banks, broker-dealers, nominees, custodians and fiduciaries to forward proxy materials to the beneficial owners of shares held as of the record date and will provide reimbursement for the cost of forwarding the materials.
We have retained MacKenzie Partners, Inc. to assist with soliciting proxies on our behalf for a fee of approximately $17,500, plus reasonable out of pocket expenses. We bear all proxy solicitation costs. If you have any questions or need any assistance in voting your shares, please contact our proxy solicitor, MacKenzie Partners, Inc. toll-free at (800) 322-2885, collect at (212) 929-5500 or at proxy@mackenziepartners.com or our Investor Relations department at investors@gannett.com or (703) 854-3000.
Can I ask questions at the Annual Meeting?
You may submit questions in advance of the Annual Meeting or during the Annual Meeting. We encourage you to submit questions in advance at www.proxyvote.com after logging in with your 16-digit unique control number found on the proxy card or voting instruction form included with the proxy materials. We request that questions sent in advance be submitted by June 2, 2023. You may also submit questions during the Annual Meeting by accessing the virtual meeting website at www.virtualshareholdermeeting.com/GCI2023 with your 16-digit unique control number and following the instructions available on the virtual meeting website.
We expect to respond to questions during the Annual Meeting that are pertinent to meeting matters as time permits. We may group together questions that are substantially similar to avoid repetition. If we are unable to answer your question during the Annual Meeting due to time constraints, we encourage you to contact our Investor Relations department at (703) 854-3000 or investors@gannett.com.
Who counts the votes?
A representative of the Carideo Group, Inc. (an affiliate of Broadridge Financial Solutions Inc.), our independent tabulating agent, will count the votes and act as the inspector of elections. We keep all proxies, ballots and voting tabulations confidential as a matter of practice. We permit only our inspector of elections to examine these documents.
How can I find out the voting results of the Annual Meeting?
Preliminary voting results will be announced at the Annual Meeting. We will publish the voting results in a Current Report on Form 8-K, which will be filed with the SEC within four business days after the Annual Meeting.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The first proposal is to elect nine director nominees to serve until the 2024 annual meeting of stockholders and until their respective successors are duly elected and qualified. Our Bylaws provide that our Board shall consist of not less than three and not more than eleven directors as the Board may from time to time determine. The number of directors on the Board is currently fixed at nine.
Upon the recommendation of the Nominating and Corporate Governance Committee, the Board has unanimously nominated Michael E. Reed, Kevin M. Sheehan, Theodore P. Janulis, John Jeffry Louis III, Maria M. Miller, Amy Reinhard, Debra A. Sandler, Laurence Tarica, and Barbara W. Wall for election as a director to serve until the 2024 annual meeting of stockholders and until their respective successors are duly elected and qualified, subject to earlier retirement, resignation or removal. All of the Board’s nominees for director were elected at the last annual meeting and all nominees have agreed to serve if elected.
The Board recommends that you vote FOR each of the director nominees.
Unless otherwise instructed, all proxies that we receive will be voted FOR the director nominees. Abstentions and broker non-votes will have no effect on the election of directors. A “withhold vote” will have no effect on the vote’s outcome, because the nominees who receive the highest number of “for” votes are elected, and since the nominees are running unopposed they only need a single “for” vote to be elected. If a nominee becomes unable to stand for election as a director, an event that our Board does not presently expect, the persons named in the proxy reserve the right to vote for such substitute nominee or nominees as they, in their discretion, determine and as the Nominating and Corporate Governance Committee or the Board may recommend, provided that proxies cannot be voted for a greater number of persons than the number of nominees named in this proxy statement.
Information Concerning our Director Nominees
Set forth below is certain biographical information for our director nominees. Each of our director nominees was selected because of the knowledge, experience, skill, expertise and diversity the director contributes to the Board as a whole. Our director nominees have experience from senior positions in large, complex organizations. In these positions, they gained core management skills, such as strategic and financial planning, public company financial reporting, corporate governance, risk management, and leadership development. The Nominating and Corporate Governance Committee believes that each of the director nominees also has key attributes that are important to an effective Board: integrity and demonstrated high ethical standards; sound judgment; analytical skills; the ability to engage management and each other in a constructive and collaborative fashion; diversity of origin, background, experience, and thought; and the commitment to devote significant time and energy to serve on the Board and its committees.
| Name, Position, Age | Description | |
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Michael E. Reed
|
Mr. Reed has been Chairman of the Board since May 2019, and he has served as our Chief Executive Officer and President, and a member of our Board, since November 2013. Previously, he had been Chief Executive Officer of GateHouse Media, Inc. (“GateHouse”), our predecessor, since January 2006 and served in this position when GateHouse filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in September 2013. He was a member of the board of directors of GateHouse since October 2006. Mr. Reed formerly served on the board of directors for the Newspaper Association of America, including one year as Chairman. He formerly served on the board of directors for the Minneapolis Star Tribune, from 2009 to 2014. Mr. Reed also formerly served as a director of the Associated Press and Chairman of the Audit Committee for the Associated Press. Mr. Reed currently also serves on the board of directors of TouchCare Holdings LLC.
Mr. Reed has a deep understanding of our operations, strategy and people, as well as our industry, serving in senior executive capacities in the newspaper and publishing industries for more than 25 years. Mr. Reed also has extensive corporate board experience.
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Kevin M. Sheehan Lead Director since May 2019
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Mr. Sheehan has been a member of our Board since November 2013, and served as Lead Director since May 2019. He was a member of the board of directors of GateHouse from October 2006 through November 2013 and served in this position when GateHouse filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in September 2013. From August 2016 to September 2018, Mr. Sheehan served as a director of, and from June 2018 to October 2018, as a senior advisor to, Scientific Games Corporation, a provider of games, systems and services for casino, lottery, social gaming, online gaming and sports betting. Mr. Sheehan served as the Chief Executive Officer and President of Scientific Games from August 2016 until June 2018. From February 2015 through August 2016, Mr. Sheehan taught full time as the John J. Phelan, Jr. Distinguished Visiting Professor of Business at Adelphi University. Mr. Sheehan currently serves as a director and a member of the finance committee, and since April 2021 as Chairman, of Dave & Buster’s, Inc. (Nasdaq: PLAY), having served as its Interim CEO from October 2021 to June 2022. Mr. Sheehan served as a director of Navistar, Inc., (NYSE: NAV) from October 2018 to June 2021, Hertz Global Holdings, Inc. (NYSE: HRI) and its wholly-owned subsidiary The Hertz Corporation from August 2018 to July 2021, and Bob Evans Farms (Nasdaq: BOBE) from April 2014 to May 2017.
Mr. Sheehan has significant experience in a senior management capacity for large corporations. Specifically, his experience as the chief executive officer and chief financial officer of several large corporations provides him with important experience and skills, as well as an understanding of the complexities of our current economic environment. Mr. Sheehan also brings significant financial expertise to our Board and is a Certified Public Accountant.
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| Name, Position, Age | Description | |
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Theodore P. Janulis |
Mr. Janulis founded and has served as a principal of Investable Oceans, an investment platform incorporated in 2020 that is focused on sustainable ocean investing, since September 2019. From January 2014 until June 2016, Mr. Janulis served as the Chief Executive Officer of CRT Greenwich LLC, a financial services company. Prior to that, Mr. Janulis served as Chief Executive Officer of Aurora Bank FSB, a federal savings bank, from September 2008 to January 2013. Before Aurora, Mr. Janulis spent 23 years at Lehman Brothers in various senior management roles including Global Head of Mortgage Capital, Global Head of the Investment Management Division, which included Neuberger Berman, and Global Co-Head of Fixed Income. Mr. Janulis also served on the firm’s Executive Committee.
Mr. Janulis’ knowledge, skill, expertise and experience, including his extensive senior management experience, his service as chief executive officer of two companies and his significant financial background, as evidenced by his professional and educational history, provides us with valuable experience at the board level.
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John Jeffry Louis III |
Mr. Louis served as a director and as Chairman of the Board of Legacy Gannett from June 2015 to November 2019. Mr. Louis previously served as a director of TEGNA, Inc., Legacy Gannett’s former parent, from October 2006 until June 2015. Mr. Louis is the co-founder of Parson Capital Corporation, a Chicago-based private equity and venture capital firm, and served as its Chairman from 1992 to 2007. He currently serves as a director of The Olayan Group and S.C. Johnson and Son, Inc.
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Maria M. Miller
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Ms. Miller has a more than 30-year career in innovative marketing and digital communications, spanning the consumer products, financial services, e-commerce, travel, hospitality and cruise industries. Most recently, she served as Chief Marketing Officer for Bahamas Paradise Cruise Line from June 2017 to January 2019. Ms. Miller also held various senior marketing roles at several companies, including Norwegian Cruise Line (NYSE: NCLH), Dave & Buster’s, Inc. (Nasdaq: PLAY), Elance, Inc. (now Upwork) (Nasdaq: UPWK), Avis Rent A Car, Inc. (Nasdaq: CAR), American Express (NYSE: AXP), the General Foods Corporation and The Shulton Group. Ms. Miller serves on the board of directors of Playa Hotels & Resorts N.V.
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| Name, Position, Age | Description | |
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Amy Reinhard
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Ms. Reinhard has been the Vice President of studio operations and consumer products for Netflix, Inc. (Nasdaq: NFLX) since September 2020, having previously served as Vice President of content acquisition and consumer products for Netflix, Inc. from November 2016 to September 2020. From January 2005 until November 2016, Ms. Reinhard was with Paramount Pictures Corporation, a subsidiary of ViacomCBS Inc. (Nasdaq: PARA), where she held a series of advancing roles, most recently as President of Worldwide Television Licensing and Distribution from April 2014 to November 2016.
Ms. Reinhard is a senior media executive with more than 20 years of strategy, operational, and management experience across the spectrum of television and film acquisition, production, marketing, and distribution. She has significant experience across traditional and digital media and brings to the Board a unique combination of strategy and operational skills with a global perspective, growth orientation and audience-focus.
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Debra A. Sandler |
Ms. Sandler serves as President and Chief Executive Officer of La Grenade Group, LLC, a privately held consulting firm that she founded in 2015 and advises a wide range of clients on marketing innovation and overall business development. Ms. Sandler served as a director of Legacy Gannett from June 2015 to November 2019. Ms. Sandler served as Chief Health and Wellbeing Officer of Mars, Inc., a manufacturer of confectionary, food, and pet food products, from July 2014 through June 2015, having served as President, Chocolate, North America from April 2012 to July 2014, and Chief Consumer Officer, Mars Chocolate, North America from November 2009 to March 2012. Prior to joining Mars, Ms. Sandler spent ten years with Johnson & Johnson in a variety of leadership roles and, before that, 13 years with PepsiCo. She serves as a director of Keurig Dr Pepper Inc. (Nasdaq: KDP), Dollar General Corporation (NYSE: DG), Archer-Daniels-Midland (NYSE: ADM), a trustee of Hofstra University, and is a member of the Executive Leadership Council. Ms. Sandler is a regular speaker on topics such as diversity and inclusion, multicultural business development and health and wellbeing in the consumer packaged goods industry. Ms. Sandler has served a member of the Board of Executive Managers of Pharmavite, LLC since 2017.
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| Name, Position, Age | Description | |
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Laurence Tarica |
Mr. Tarica was President and Chief Operating Officer of Jimlar Corporation (“Jimlar”), a member of the Li and Fung Group and a designer, distributor, and supplier of footwear, from March 1991 until his retirement in December 2014. Mr. Tarica serves on the board of directors of D’Addario and Company, a manufacturer of musical instrument accessories. Mr. Tarica also served on the Advisory Board of the New York Mets until November 2020.
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Barbara W. Wall
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Ms. Wall served as the Chief Legal Officer of Legacy Gannett from June 2015 to November 2019, and as its interim Chief Operating Officer from March 2019
to November 2019. She previously held various other positions with TEGNA, Inc., where she worked for thirty years. Since 2007, Ms. Wall has taught media law at American University’s School of Communications. She also currently serves on the
boards of The Freedom Forum and The News Media Alliance.
Ms. Wall brings extensive First Amendment and legal expertise in addition to a deep knowledge of Legacy Gannett and its history and operations. She has
received several lifetime achievement awards, including the Media Law Resource Center’s William J. Brennan, Jr. Defense of Freedom Award (2021), the American Bar Association’s Champion of Freedom Award (2020) and the Reporters Committee
for Freedom of the Press’s First Amendment Award (2012).
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ENVIRONMENTAL, SOCIAL AND GOVERNANCE MATTERS
The Board believes that effective oversight of ESG matters is core to its risk oversight function and is essential to sustainability, providing value to stockholders and benefiting the communities we serve. As a leading media organization, our longstanding corporate social responsibility position is driven by our deep commitment to our communities. Our journalists seek to shed light on important issues and our marketing endeavors promote meaningful connections in our communities.
The Board’s oversight of ESG matters includes review of the following on at least an annual basis:
| ● | environmental practices including energy and resource management; |
| ● | diversity initiatives and human resource policies and practices; |
| ● | privacy and data security practices; |
| ● | executive compensation programs; |
| ● | annual stockholder engagement activity; |
| ● | the whistleblower program and procedures for handling complaints; and |
| ● | the code of business conduct and ethics, code of ethics for executive officers, and related compliance activities. |
Gannett’s mission of empowering its communities to thrive cannot be met without considering the pillars that make up our corporate social responsibility position. Whether reporting the latest news or providing business-to-business solutions, Gannett backs up its corporate mission and purpose with mindful and ethical business practices that positively impact communities, people, and the planet.
Environmental, Social and Governance Sustainability Report
As a leading media organization, our longstanding corporate social responsibility position is driven by our deep commitment to our communities. We are dedicated to ensuring that we have mindful and ethical business practices that positively impact our world. In 2022, Gannett published its inaugural ESG report detailing the alignment of its efforts across the Company’s corporate social responsibility pillars which are people, planet, and communities, with the U.N. SDGs of Reduced Inequalities, Climate Action, and Peace, Justice & Strong Institutions. We aim to contribute to all 17 U.N. SDGs but have chosen these three as our key priorities for sustainability at Gannett where we believe Gannett can help make the most significant impact. In early 2023, we published our 2023 ESG Report detailing the progress we made on our U.N. SDGs that include Reduced Inequalities, Climate Action, and Peace, Justice & Strong Institutions. The 2023 ESG Report included noteworthy highlights such as improving our workplace diversity, expanding our systems infrastructure to provide Scope 1 and 2 emissions for our entire global carbon footprint and reducing the number of manufacturing facilities. While Gannett has made great strides, we know that we can do more, and we look forward to continuing to build upon our efforts in 2023 and beyond. To read the complete 2023 ESG Report, which we intend to update annually, please go to gannett.com/sustainability.
People (U.N. SDG 10: Reduced Inequalities)
Gannett supports a diverse, inclusive, and equitable workplace offering opportunity for growth. We invest in our employees with policies, practices, and resources to enable personal and professional advancement. Beginning in 2020, we made formal commitments to workplace diversity within our own company and to broadening our reporting on diversity and inclusion. These efforts align closely to the broader U.N. SDGs covered in Goal 10, and particularly target 10.2.
We are committed to creating a workplace that is inclusive — where everyone can be their whole, authentic selves, which we believe will influence the stories we tell, the products we create, and how we connect with the communities we serve.
Gannett has defined workplace diversity goals it expects to achieve by 2025 and transparently publishes global workforce metrics bi-annually. Additionally, Gannett newsrooms have pledged to achieve racial and gender parity with the diversity of our nation throughout our workforce. Gannett also broadened the proportion of journalists reporting on diversity and inclusion by adding dedicated reporting positions. In 2022:
| ● | People of color representation in our United States (“U.S.”) workforce increased by 0.6% percentage points from 23.4% to 24%.(1) |
| ● | Female representation in our global workforce declined 1 percentage point from 46% to 45%. However, at the leadership level, it increased 4 percentage points from 41% to 45% of those director and above. |
| ● | Female representation at the leadership level within the U.K. declined 3 percentage points, from 36% to 33%.(1) |
Our target is to increase the representation of people of color in leadership positions by 30 percentage points by 2025 and at the leadership level, representation of people of color in 2022 increased two percentage points from 14% to 16% of those director and above.(1)
To support the well-being of all our employees and to maintain a corporate culture committed to supporting human rights across our operations and throughout our entire organization, we published a companywide Human Rights Policy. Our Human Rights Policy covers areas such as our commitment to diversity and inclusion, a safe and healthy workplace, our communities and stakeholders, and freedom of association and collective bargaining, which ensures our employees’ right to form and choose whether to join a labor union without fear of reprisal, intimidation, or harassment. The policy also reflects our commitment to bargaining in good faith with chosen representatives of such groups in accordance with applicable laws.
Gannett remains consistent, committed, and intentional in our quest to be a leader in Inclusion, Diversity, and Equity (“ID&E”). In 2022, Gannett was recognized in the 2022 Best Places to Work for LGBTQ Equality. In 2022, for the fifth year in a row, Gannett received a perfect score of 100 on the Corporate Equality Index, the nation’s premier benchmarking survey and report measuring corporate policies and practices related to LGBTQ workplace equality and inclusion.
Additionally, in early 2023 we published our 2022 Inclusion Report which highlighted our ID&E efforts. The 2022 Inclusion Report outlined current workforce diversity data, Gannett’s inclusion goals that reach into 2025, as well as the steps we are taking to achieve our goals. To read the 2022 Inclusion Report and for updates on our progress against our workforce diversity goals and the latest additional detail on our inclusion efforts, please go to gannett.com/inclusion.
Planet (U.N. SDG 13: Climate Action)
Gannett strives to minimize its environmental impact through sustainable business practices for sourcing, consumption, and waste. We have taken a number of steps within the organization in an effort to reduce our use of water, to recover and recycle electricity and fossil fuels when possible, and to pursue green energy options where available. In the U.S. and U.K., we have defined environmental policies that align with several of the key aims for Goal 13 and particularly targets 13.2 and 13.3. Additionally, we have committed increased journalism resources for reporting on climate change and our environment.
Gannett is committed to completing a comprehensive Greenhouse Gas emissions report that is expected to allow us to redefine our commitment and set targets around Gannett’s carbon footprint. We will continue to represent the concerns of the local and national communities where we live and work, reporting on local issues including the environmental impact on our planet. During 2022, we reported for the first time our Scope 1 and 2 carbon emissions for 2021, and we expect to expand our reporting to begin to encompass Scope 3 emissions over time.
Gannett launched a sustainability-focused employee resource group (“ERG”) to coincide with Earth Day in April 2022. In 2022, the group welcomed speakers focused on climate change, sustainable farming and impacts of the Inflation Reduction Act. Moving into 2023, the leadership team is planning a company-wide Earth Month celebration in April as well as collaborative events throughout the year with other Gannett ERGs.
Gannett is committed to continuing to include more detailed articles to provide broader context to news in health, environment and science and include in-depth analyses that explore questions of how and why health and climate trends matter to our readers. In 2022, Gannett’s U.S. National Climate Change Cross team published more than 330 stories, newsletters or major projects about climate change and the environment. Additionally, the USA TODAY NETWORK publishes a weekly newsletter, Climate Point, that curates content about the environment, sustainability, and climate change from across the network for a national audience, helping readers make better informed decisions for themselves, their families, and their communities.
Communities (U.N. SDG 16: Peace, Justice and Strong Institutions)
Gannett builds community through storytelling and connects readers and communities to empower action that enhances the neighborhoods we share. Our stories reach millions of readers each year and have the power to inspire people to become good global citizens. These efforts align closely to the broader aims of Goal 16 (particularly targets 16.3, 16.5 and 16.10) and our efforts to educate and empower through our journalism.
Through trusted, fact-based journalism that adheres to the highest ethical standards, Gannett is steadfast in its commitment to expose wrongs, shine a light on threats to fundamental freedoms, and seek solutions that empower citizens to hold their governments accountable.
Gannett is committed to ensuring our coverage is widely available, actively promoted across our media sites and marketed to our millions of registered users. To bolster this effort, the Company commits to the ongoing publishing of an annual network-wide Impact Report, that surfaces the top stories we produced that led to action every year. This report will specifically commit to updates on inclusion, diversity and equity as well as climate coverage and will be disseminated digitally across our entire network, which reaches approximately 1 in 2 adults in the U.S. based on December 2022 Comscore Media Metrix®. During 2023, we expect to publish our key reproductive rights coverage as an additional topic within the annual Impact Report. Gannett commits to refreshing this target annually to address the most pressing threats to fundamental freedoms.
Determination of Director and Director Nominee Independence
A majority of the directors serving on the Board must be independent. For a director to be considered independent, our Board must determine that the director does not have any direct or indirect material relationship with the Company. The Board determines director independence based on our independence standards and the independence standards under the NYSE listing rules. The Board may determine, in its discretion, that a director or nominee is not independent notwithstanding qualification under the NYSE listing rules.
The Board has determined that each of Mmes. Miller, Reinhard, Sandler and Wall, and Messrs. Janulis, Louis, Sheehan and Tarica are, and Vinayak Hegde, a former director, was during the period of his service during 2022, independent for purposes of NYSE Rules 303A.01 and 303A.02 and each such director or director nominee has no material relationship with the Company. In making such determination, the Board took into consideration the relationships that each director or nominee has with the Company, either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company. Mr. Reed, our employee, is not independent.
Statement on Corporate Governance
We emphasize the importance of professional business conduct and ethics through our corporate governance initiatives. Our Board consists of a majority of independent directors (in accordance with the listing standards of the NYSE). Our Audit Committee, Nominating and Corporate Governance Committee, and Compensation Committee are each composed entirely of independent directors.
We have adopted Corporate Governance Guidelines and a Code of Business Conduct and Ethics which delineate our standards for our officers and directors, and employees. Our Code of Business Conduct and Ethics, Code of Ethics for Executive Officers, Corporate Governance Guidelines, and the charters of the Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee of our Board are available on our website, www.gannett.com.
The Company has also adopted a Code of Ethics for Executive Officers which is available on our website and which sets forth specific policies to guide the Company’s senior officers in the performance of their duties. This code supplements the Code of Business Conduct and Ethics described above. We intend to disclose any amendment to, or waiver from, a provision of the Code of Ethics for Executive Officers or the Code of Business Conduct and Ethics under applicable NYSE and SEC requirements by posting such information on our website at www.gannett.com.
We have not incorporated by reference into this proxy statement the information included, or that can be accessed through, our website and you should not consider it to be part of this proxy statement.
Board Structure and Leadership
We do not currently divide the roles of Chairman of the Board and Chief Executive Officer consistent with the flexibility afforded by our Corporate Governance Guidelines. In addition to the Chairman of the Board, we have a Lead Director, who is an independent director.
Our current Chief Executive Officer has a deep understanding of our operations, strategy and people, as well as our industry, serving in senior executive capacities in the newspaper and publishing industries for more than 25 years. The Board believes that these experiences and other insights put the Chief Executive Officer in the best position to provide broad leadership for the Board as it considers strategy and as it exercises its fiduciary responsibilities to stockholders. Further, the Board has demonstrated its commitment and ability to provide independent oversight of management.
At the same time, the Board believes that strong, independent Board leadership is a critical aspect of effective corporate governance. Accordingly, to provide independent leadership, the Board established the position of Lead Director in 2019. The Lead Director is an independent director and is elected annually by the Board. The responsibilities of the Lead Director include, but are not limited to, calling meetings of the non-management directors, if desired, and being available when appropriate for consultation and direct communication if requested by stockholders.
The Board’s Role in Risk Oversight
Our risk management is generally overseen by our Chairman and Chief Executive Officer, who receives reports directly from other officers and individuals who perform services for us. Material risks are identified and prioritized by management, and they are periodically discussed with the Board or appropriate committee.
The Board regularly reviews information regarding our credit, liquidity and operations, including risks and contingencies associated with each area. The Board also receives reports on information technology risks, including cybersecurity and data security risks. Day-to-day management of data and cybersecurity is currently the responsibility of our Chief Technology Officer, who reports directly to our Chief Financial Officer. Our Chief Technology Officer also routinely reports in-person, at least twice a year, to our Board. The Chief Technology Officer reviewed cybersecurity and data security risks with the Board two times in fiscal 2022.
In addition to the formal compliance program, the Board encourages management to promote a corporate culture that incorporates risk management into our corporate strategy and day-to-day business operations.
Board and Committee Meetings
During the year ended December 31, 2022, our Board held 12 meetings (in addition to actions taken by written consent). In 2022, the Board had four standing committees: the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee, and the Transformation Committee. In March 2022, the Board established a Share Repurchase Committee to oversee the Company’s share repurchase program (the “Share Repurchase Program”).
During 2022, the Audit Committee met five times, the Nominating and Corporate Governance Committee met five times, the Compensation Committee met four times, and the Transformation Committee met two times. During 2022, each of our then serving directors attended at least 75% of the meetings of the Board and the committees on which they served. Although director attendance at our annual meeting of stockholders each year is encouraged, we do not have an attendance policy. All of our directors attended our 2022 annual meeting of stockholders except two of our current directors and Mr. Hegde, a former director.
The members of each of our standing committees are set forth in the table below:
| Audit Committee | Compensation Committee |
Nominating & Corporate Governance Committee |
Transformation Committee |
Share |
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| Theodore P. Janulis |  |
(C) |
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| John Jeffry Louis III |  |
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| Maria M. Miller | |
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| Amy Reinhard | |
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| Debra A. Sandler | |
(C) |
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| Kevin M. Sheehan | (C) |
|
(C) |
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| Laurence Tarica | (C) |
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| Barbara W. Wall | |
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|
denotes member | |||||
| (C) | denotes Chair | |||||
Audit Committee
The Audit Committee is responsible for providing assistance to the Board in fulfilling its legal and fiduciary obligations with respect to matters involving the accounting, auditing, financial reporting, internal control and legal compliance functions of the Company and its subsidiaries, including, without limitation, assisting with the Board’s oversight of (a) the integrity of our financial statements; (b) our compliance with legal and regulatory requirements; (c) our independent registered public accounting firm’s qualifications and independence; and (d) the performance of our independent registered public accounting firm and our internal audit function. The Audit Committee is also responsible for appointing our independent registered public accounting firm and approving the terms of the registered public accounting firm’s services.
The Board has determined that each of the members of our Audit Committee is independent in accordance with the rules of the NYSE and the SEC’s audit committee independence standards. The Board has also determined that Mr. Sheehan qualifies as an “Audit Committee Financial Expert” as defined by the rules of the SEC.
Compensation Committee
The Compensation Committee is responsible for administering and approving the grant of awards under any incentive compensation plan, including any equity-based plan of ours, and making recommendations to the Board regarding director compensation. The Compensation Committee also evaluates annually the performance of executive officers and approves their compensation. In addition, the Compensation Committee reviews and discusses with management the compensation discussion and analysis included in the proxy statement, and prepares the Compensation Committee Report as required by the rules of the SEC.
The Board has determined that each member of the Compensation Committee is a “non-employee director” as defined under Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and an independent director under the NYSE listing standards.
Compensation Committee Interlocks and Insider Participation
There were no Compensation Committee “interlocks” during 2022, which generally means that none of our executive officers served as a director or member of the compensation committee of another entity, one of whose executive officers served as a director or member of our Compensation Committee. In addition, there was no insider participation on the Compensation Committee in 2022.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is responsible for: (a) recommending to the Board individuals qualified to serve as our directors and on committees of the Board; (b) advising the Board with respect to board composition, procedures and committees; (c) advising the Board with respect to the corporate governance principles applicable to us; and (d) overseeing the evaluation of the Board. The Board has determined that each member of the Nominating and Corporate Governance Committee is an independent director in accordance with the rules of the NYSE.
The Nominating and Corporate Governance Committee believes that the qualifications for serving as a director include such person’s familiarity with the Company, possession of such knowledge, experience, skills, expertise and diversity with respect to characteristics, such as gender, race, ethnicity and sexual orientation, as would enhance the Board’s ability to manage and direct our affairs and business, including, when applicable, the ability of committees of the Board to fulfill their duties and/or to satisfy any independence requirements imposed by law, regulation or NYSE listing standard. In addition to considering a director-candidate’s background and accomplishments, the process for identifying and evaluating all nominees includes a review of the current composition of the Board and the evolving needs of our business. The Nominating and Corporate Governance Committee will identify potential nominees by asking current directors and executive officers to notify the committee if they become aware of suitable candidates. The Nominating and Corporate Governance Committee also may, from time to time, engage firms that specialize in identifying director candidates.
Our Board believes that diversity can strengthen board performance. In addition, we believe that our current practices support board diversity. Specifically, our Corporate Governance Guidelines provide that the Nominating and Corporate Governance Committee is committed to actively seeking out highly qualified women and other diverse candidates. Accordingly, the Nominating and Corporate Governance Committee includes, and has any search firm that it engages include, diverse candidates with respect to characteristics such as gender, race, ethnicity and sexual orientation in the pool of potential candidates from which Board nominees are chosen. The Nominating and Corporate Governance Committee assesses its achievement of diversity through the review of the Board’s composition as part of the Board’s annual self-assessment process.
The Nominating and Corporate Governance Committee will also consider candidates recommended by stockholders. The evaluation of nominees does not necessarily vary depending on whether or not the nominee was nominated by a stockholder. In considering candidates recommended by stockholders, the Nominating and Corporate Governance Committee may take into consideration the needs of the Board, the qualifications of the candidate, the number of shares held by the recommending stockholder and the length of time that such shares have been held.
Our Bylaws provide certain procedures that a stockholder must follow to nominate persons for election to the Board. Among these procedures, our Bylaws require that the nominating stockholder include the following information regarding the proposed nominee:
| ● | All information relating to such person that is required to be disclosed in solicitation of proxies for election of directors in an election contest or as otherwise required by Regulation 14A under the Exchange Act; |
| ● | The nominee’s written consent to being named in the proxy statement as a nominee and to serve as a director if elected; |
| ● | A statement of whether such nominee, if elected, intends to tender any advance resignation notice(s) requested by the Board in connection with subsequent elections; and |
| ● | A description of all arrangements or understandings between the nominating stockholder or any beneficial owner on whose behalf such nomination is made, or their affiliates, and each nominee or any other person in connection with the making of such nomination. |
For further detail regarding the procedures a nominating stockholder must follow, see below under “Advance Notice for Stockholder Nominations and Proposals for the 2024 Annual Meeting.”
Transformation Committee
The purpose of the Transformation Committee is to assist the Board in achieving our digital transformation. The Transformation Committee is responsible for advising the Board on our strategy to adopt and grow dynamically in the face of the digital age through the monitoring of our digital and innovation performance and oversight of risks associated with our digital transformation.
Share Repurchase Committee
The Share Repurchase Committee was established to determine the timing, number, and value of any shares repurchased under the Share Repurchase Program in its discretion using factors such as, but not limited to, stock price, trading volume, general market conditions, and the ongoing assessment of the Company’s capital needs. There is no assurance of the number or aggregate price of any shares that we will repurchase pursuant to the Share Repurchase Program. In addition, the Share Repurchase Program may be extended, suspended, or terminated at any time by the Board.
Director Retirement
Our Corporate Governance Guidelines generally provide that no director having attained the age of 75 years shall be nominated for re-election or reappointment to the Board. However, the Board may determine to waive this policy in individual cases, giving the Board greater flexibility in director succession planning.
Executive Sessions of Non-Management Directors
Executive sessions of the non-management directors occur regularly during the course of the year without management present. “Non-management directors” include all directors who are not our officers or employees. The non-management director presiding at those sessions will rotate from meeting to meeting among the chair of each of the Nominating and Corporate Governance Committee, the Audit Committee and the Compensation Committee, to the extent the director is present at the executive session.
Stockholder Communications with Directors
We provide the opportunity for stockholders and interested parties to communicate with our directors. You can contact our Board to provide comments, to report concerns or to ask questions, at the following address:
Gannett Co., Inc.
Attention: Corporate Secretary
175 Sully’s Trail
Pittsford, NY 14534
Stockholders can contact the non-management directors individually, as a committee or as a group at the address above or at the following email address: investors@gannett.com.
All communications received as set forth above will be opened by our corporate secretary and forwarded as appropriate.
Prohibitions Against Hedging and Pledging
Our insider trading policy prohibits our directors, officers and other employees from engaging in hedging and pledging transactions with respect to our securities, including collars, equity swaps, exchange funds, prepaid variable forward sale contracts, and any other transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our securities.
REPORT OF THE AUDIT COMMITTEE
Management has the primary responsibility for the integrity of the Company’s financial information and the financial reporting process, including the system of internal control over financial reporting. Our independent registered public accounting firm for 2022, Ernst & Young LLP, was responsible for conducting independent audits of the Company’s financial statements and expressing an opinion on the financial statements based upon those audits. The Audit Committee is responsible for overseeing the conduct of these activities.
The Audit Committee has:
| ● | reviewed and discussed the Company’s audited financial statements for the fiscal year ended December 31, 2022 with management and Ernst & Young LLP; |
| ● | discussed with Ernst & Young LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC; and |
| ● | received the written disclosures and the letter from Ernst & Young LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding its communications with the Audit Committee concerning Ernst & Young LLP’s independence; and has discussed with Ernst & Young LLP its independence. |
Based upon these reviews and discussions, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for filing with the SEC.
| The Audit Committee | |
|
Kevin M. Sheehan, Chair Amy Reinhard |
COMPENSATION DISCUSSION AND ANALYSIS
Named Executive Officers
For purposes of this Compensation Discussion and Analysis, our named executive officers (“NEOs”) for fiscal year 2022 are as follows:
| Name | | | Title |
| Michael E. Reed | | | Chairman of the Board, Chief Executive Officer and President |
| Douglas E. Horne | Chief Financial Officer and Chief Accounting Officer |
Mr. Reed, age 56, has been Chairman of the Board since May 2019, and has served as our Chief Executive Officer and President, and a member of our Board, since November 2013. Additional information about Mr. Reed can be found under “Proposal No. 1 – Election of Directors.”
Mr. Horne, age 52, has served as our Chief Financial Officer and Chief Accounting Officer since April 2020. He is responsible for leading our corporate development, customer service, enterprise data, finance, manufacturing and distribution, and technology organizations. Additionally, Mr. Horne is responsible for helping guide our business strategy, as well as interfacing with our Board and investors. Previously, he served as Global Controller for The We Company from May 2019 until November 2019. Mr. Horne formerly served as Senior Vice President, Controller and Principal Accounting Officer of Warner Media LLC, formerly Time Warner Inc., from January 2015 to April 2019 and its Senior Vice President and Deputy Controller from September 2011 to December 2014. Prior to that, he spent 11 years with AOL Inc. (“AOL”), including as Vice President of Finance, Deputy Chief Financial Officer and Chief Accounting Officer. Before joining AOL, Mr. Horne worked with Ernst & Young LLP in its Technology, Communications and Entertainment assurance practice, where he gained extensive international experience, working with clients in Asia and Europe.
Fiscal 2022 Business Highlights
| ● | 24.2% digital-only paid subscriber growth to over 2.03 million paid subscriptions. |
| ● | Total Digital revenues surpassed $1.0 billion in 2022, or 35.3% of total revenues. |
| ● | Net loss attributable to Gannett of $78.0 million in 2022 and Adjusted EBITDA(2) totaled $257.3 million. |
(2) Refer to Appendix A of this proxy statement for our definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to the most directly comparable U.S. GAAP measure, which is Net loss attributable to Gannett.
Compensation Setting Process
Objective
The primary objectives of our executive compensation program are (a) to attract and retain executives with the requisite skills and experience to help us achieve our business mission and develop, expand and execute business opportunities to improve long-term stockholder value, and (b) to motivate executives to achieve key business objectives and drive operating performance, which then is expected to drive the creation of long-term stockholder value.
Role of the Compensation Committee
Our Compensation Committee is primarily responsible for overseeing the total compensation of our NEOs. In this capacity, our Compensation Committee designs, implements, reviews and recommends to our Board the approval of all compensation for our NEOs.
In evaluating and determining our NEO compensation programs, the Compensation Committee may consider a number of factors, including compensation for similarly situated executives, the historical compensation levels of our executives, performance factors, and the overall goals and objectives of our compensation program. The performance factors described below are considered by our Compensation Committee in connection with our annual performance reviews and are a critical component in the determination of annual incentive awards and long-term equity incentive awards for our NEOs.
Role of Management
Our Chief Executive Officer makes recommendations and provides input to the Compensation Committee and the Board regarding the performance and compensation of the other NEO. The Compensation Committee considers the Chief Executive Officer’s evaluation and his direct knowledge of the performance and contributions of the NEO when making compensation decisions. Our Chief Executive Officer is not present during Compensation Committee deliberations or voting regarding his compensation.
Role of Compensation Consultant
Under its charter, our Compensation Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other advisor. Our Compensation Committee engaged Meridian Compensation Partners LLC (“Meridian”), a compensation consultant, to advise the Compensation Committee regarding the compensation for our NEOs, including assessing the executive compensation of our NEOs and non-employee directors relative to market practices, assisting with the design of our 2022 annual incentives and grants under our long-term incentive plan, and other matters as directed by the Compensation Committee. From time to time, Meridian also provides market, legislative, and regulatory updates to the Compensation Committee to keep them informed of such developments.
Say on Pay
In evaluating executive compensation programs, policies and practices, the Compensation Committee noted that approximately 86% of our stockholders present and entitled to vote thereon cast votes “for” the advisory vote on the Company’s executive compensation program at the 2022 annual meeting of stockholders. After considering the results of the vote, we have continued to enhance our compensation program as described in detail in this proxy statement.
Recoupment Policies
In March 2023, we adopted a Detrimental Conduct Recoupment Policy which covers our current and former employees. Pursuant to this policy, if an employee engages in “detrimental conduct” or materially breaches any restrictive covenant set forth in any agreement we have with the employee, we may seek to recover all or any portion of the recoverable amounts awarded to the employee. Remedies for violations of this policy include cancellation of any outstanding awards and the recovery from the employee of the value (before taxes) on any and all equity or other awards issued to such employee during the 36-month period preceding the employee’s last day of active employment. Covered “detrimental conduct” includes the employee’s involvement in criminal activity; intentional acts of fraud or dishonesty; intentional, material violation of any term of any contract or agreement we have with the employee or any statutory duty the employee owes to us; conduct that constitutes gross insubordination or habitual neglect of duties; intentional, material refusal to follow the lawful directions; intentional, material failure to follow, or intentional conduct that violates our written policies; or any other action that we reasonably deem detrimental to our interests.
We are currently in the process of implementing a financial restatement recoupment policy to comply with NYSE listing standards promulgated in accordance with the SEC’s final clawback rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Risk and Compensation Policies
In considering the risks to us and our business that may be implied by our compensation plans and programs, our Compensation Committee considers the design, operation and mix of the plans and programs at all levels of the Company. Our compensation program is designed to mitigate the potential to reward excessive risk-taking that may produce short-term results that appear in isolation to be favorable, but that may undermine the successful execution of our long-term business strategy and erode stockholder value.
Tax Considerations
Tax rules generally limit the deductibility of compensation paid to each of our NEOs to $1 million per year. The Compensation Committee retains the discretion to pay compensation that may not be tax deductible.
Competitive Market Data
The Compensation Committee reviews market data on executive pay levels and program design to assist in determining appropriate compensation for the NEOs. The Compensation Committee does not benchmark compensation to a particular percentile of market data, but rather uses market data as context when establishing compensation. For 2022, the Compensation Committee, with assistance of its compensation consultant, reviewed market data from a peer group of the following companies: Clear Channel Outdoor Holdings, Inc., Gray Television, Inc., IAC Inc., iHeartMedia, Inc., John Wiley & Sons, Inc., News Corporation, Nexstar Media Group, Inc., Quad/Graphics, Inc., Scholastic Corporation, Sinclair Broadcast Group, Inc., Stagwell Inc., TEGNA Inc., The E.W. Scripps Company, The Interpublic Group of Companies, Inc., The New York Times Company, Yelp Inc., and Ziff Davis, Inc. We believe these companies generally represent companies of comparable size in publishing, advertising and related industries.
Elements of Executive Compensation Program
We seek to achieve the objectives for our executive compensation program through the following compensation elements.
| Compensation Element | | Key Characteristics | | Link to Objectives |
| Base Salary | | Fixed; reviewed annually | | To provide a competitive rate of pay |
| | | |||
| Annual Incentive | | Variable; based on Company and individual performance | | To ensure that a portion of compensation is at risk and linked to Company and individual performance |
| | | |||
| Long-Term Incentive | | Variable; tied to financial and/or stock price performance | | To reinforce the NEO’s long-term commitment to the Company’s success and further alignment with stockholders |
| | | |||
| Benefits and Perquisites | | Fixed; substantially the same as the benefits offered to other employees of the Company, including vacation, sick time, participation in medical, dental and insurance programs | | To provide competitive levels of benefits that promote health, wellness and financial security |
| | | |||
| Post-Termination Pay | | Post-termination pay in specified circumstances, including a change in control | | To provide competitive levels of benefits upon a qualifying termination of employment |
Pay Mix
Mr. Reed’s total direct compensation in respect of fiscal year 2022 consisted of base salary – 17%; annual incentive bonus – 22%; and long-term incentive awards – 61%. Mr. Horne’s total direct compensation in respect of fiscal year 2022 consisted of base salary – 24%; annual incentive bonus – 24%; and long-term incentive awards – 52%. Long-term incentive awards reflect the target grant values approved by the Compensation Committee, which include the value of the 2022 performance stock units (“PSUs”) assigned to the 2023 and 2024 performance periods. The equity values shown in the Summary Compensation Table and Grant of Plan-Based Awards table only include the value of the 2022 PSUs assigned to the 2022 performance period in accordance with FASB ASC Topic 718.
Base Salary
On an annual basis, the Compensation Committee reviews and considers changes to each NEO’s base salary in light of factors such as the nature and responsibility of the position, individual and Company performance and comparative market data.
| Name | 2022 Base Salary Rate | | 2021 Base Salary Rate | |
| Michael E. Reed |
$900,000 (1/1/22 – 9/30/22) $800,000 (10/1/22 – 12/31/22) |
$900,000 | ||
| Douglas E. Horne | $700,000 | $600,000 |
The Compensation Committee approved an increase in Mr. Horne’s base salary for 2022 to reflect the increased scope of his responsibilities and performance, as well as to align with peer pay levels. In connection with Company expense initiatives, Mr. Reed’s base salary rate was voluntarily reduced to $800,000 for the period of October 1, 2022 through December 31, 2022, and Messrs. Reed and Horne received only 50% of their salary for two weeks in December 2022.
Annual Incentive
We maintain the Gannett Co., Inc. Annual Bonus Plan (the “ABP”) to motivate executives to achieve key financial and strategic business objectives of the Company and its affiliates with an annual bonus opportunity. Mr. Reed’s annual target bonus level for 2022 was 125% of his base salary, which was increased from 110% of salary in 2021 to more closely align with market data. Mr. Horne’s annual target bonus level was 100% of his base salary, consistent with 2021.
The Compensation Committee did not establish formal performance metrics under the ABP for the NEOs in 2022 given the uncertainty facing the company at the beginning of 2022 and the strategic organizational restructuring that was announced in June 2022. The Compensation Committee decided that it would use its judgment to determine an incentive payout based on the same framework used under the ABP for 2021, which was based 50% on Adjusted EBITDA, 25% on key growth drivers and 25% on individual performance, and measured performance results against the budgeted Adjusted EBITDA and key growth drivers for 2022.
We did not meet our Adjusted EBITDA target in 2022. The key growth drivers for 2022 were digital-only revenues, digital-only paid subscriptions, subscriber engagement, Digital Marketing Solutions (“DMS”) revenue and DMS Adjusted EBITDA. The key growth drivers paid out at 87.85% of target, based on attainment above threshold in all areas, and above target achievement for DMS Adjusted EBITDA. The Compensation Committee determined that individual performance would pay out at 100%.
Based on the Company and individual performance results for fiscal year 2022, Messrs. Reed and Horne received awards for fiscal year 2022 in the amounts of $513,652 and $328,738, respectively.
Long-Term Incentive
We maintain the Gannett Co., Inc. 2020 Omnibus Incentive Compensation Plan, as amended (the “2020 Plan”), under which the Compensation Committee may grant long-term incentives, in the form of cash or equity, in its discretion. Messrs. Reed and Horne are eligible to receive awards under the 2020 Plan, as determined by the Compensation Committee.
In March 2022, the Compensation Committee awarded Messrs. Reed and Horne long-term incentives of $3,000,000 and $1,000,000, respectively. In determining the awards, the Compensation Committee considered market data as well as each executive’s experience and performance. The awards were granted 50% in PSUs and 50% in time-based restricted stock awards (“RSAs”), based on the total fair market value of the awards. The amounts included in the Summary Compensation Table and Grant of Plan-Based Awards table do not include the portions of the PSUs assigned to the 2023 and 2024 performance periods, in accordance with FASB ASC Topic 718. In June 2022, the Committee awarded Mr. Horne an additional long-term incentive award of $500,000 in the form of RSAs in light of the additional responsibilities he assumed as part of the strategic organizational restructuring.
The PSUs will be earned based 50% on Adjusted EBITDA(3) and 50% on Digital Revenues. The awards will vest after three years, subject to continued service as an employee through the vesting date. Exceptions for termination due to death, disability, involuntary termination without cause, and change-in control are discussed in the “Potential Payments Upon Termination or Change In Control” section. Adjusted EBITDA and Digital Revenues will be measured over three separate annual performance periods, with one-third of the PSUs covered by each separate annual performance period and with the performance target for each annual performance period set by the Compensation Committee at the start of that year The Compensation Committee chose this approach to manage uncertainty while connecting a meaningful portion of compensation to results over the full three-year period. For the 2022 annual performance period, the PSU goals were as follows:
|
Weight
|
Threshold (50%) |
Target (100%) |
Maximum (200%) |
||||
| Adjusted EBITDA | 50% | $362 M | $402 M | $443 M | |||
| Digital Revenue | 50% | $1,059 M | $1,177 M | $1,295 M |
For the 2022 performance period, we did not achieve the threshold level for Adjusted EBITDA or Digital Revenue. Based on these results, none of the PSUs tied to the 2022 performance period will vest at the end of the three-year period. Payouts on the remaining two-thirds of the PSUs will be based on performance results for the 2023 and 2024 annual performance periods.
The RSAs will vest 33.3% on each of the first and second anniversary of the grant date and 33.4% on the third anniversary of the grant date, subject to continued service as an employee through each vesting date. If employment is terminated prior to the vesting as a result death or disability, then any unvested RSA shares will immediately vest.
Benefits and Perquisites
We maintain the Gannett Media Corp. 401(k) Savings Plan (the “Gannett 401(k) Plan”). Messrs. Reed and Horne each participated in the Gannett 401(k) Plan in 2022. The Gannett 401(k) Plan permitted eligible participants to make pre-tax and Roth contributions. For purposes of the Gannett 401(k) Plan and subject to the Internal Revenue Code limits on the amount of compensation that could be taken into account, compensation generally includes a participant’s base salary, performance-based bonuses, and pre-tax contributions to the Company’s benefit plans. Prior to October 24, 2022, the Gannett 401(k) Plan provided for a matching contribution of 50% of contributions up to 5% of eligible pay. Effective October 24, 2022, the Gannett 401(k) Plan was amended to cease matching contributions.
We do not maintain any nonqualified deferred compensation or supplemental retirement plans for any of our NEOs.
The Gannett Foundation, Inc. (the “Gannett Foundation”) is our Section 501(c)(3) charitable private foundation, which is committed to funding nonprofit organizations and programs that promote and celebrate the diversity of the communities we serve. For 2022, the Board of Directors of the Gannett Foundation approved an Executive Grant Program which provides for contributions of up to $10,000 to eligible charitable organizations recommended by our eligible executives. Both Messrs. Reed and Horne were eligible for the 2022 Executive Grant Program, and the Gannett Foundation made a contribution to a charitable organization recommended by Mr. Horne in the amount of $10,000 in 2022.
(3) Refer
to Appendix A of this proxy statement for our definition of Adjusted EBITDA.
Post-Termination Pay
Key Employee Severance Plan
We maintain the Key Employee Severance Plan, as amended (the “Key EE Severance Plan”). Mr. Reed participates in the Key EE Severance Plan, and his multiplier (discussed below) is two. Mr. Horne does not participate in the Key EE Severance Plan because he is entitled to severance benefits under his offer letter agreement, as described below.
Under the Key EE Severance Plan. in the event of a participant’s involuntary termination other than for Cause, if the participant executes a release and agrees to certain restrictive covenants, the participant is entitled to receive:
| ● | any earned but unpaid base salary or bonus through the date of termination; |
| ● | unless the termination is also a qualifying termination under the CIC Severance Plan (discussed below), a prorated annual bonus for the portion of the fiscal year elapsed prior to the termination date based on actual performance; and |
| ● | an amount equal to a “multiplier” that is designated for the participant times the participant’s annual base salary rate immediately preceding termination. |
The Key EE Severance Plan defines “Cause” to mean: (i) the participant’s embezzlement, fraud, misappropriation of funds, misappropriation of funds, breach of fiduciary duty or other act of material dishonesty committed by the participant or at his direction; (ii) the participant’s failure by to perform adequately the duties to perform adequately the duties of his position, as a result of neglect or refusal, that he does not remedy within 30 days after receipt of written notice from the Company; (iii) the participant’s material violation of the Company’s employment policies; (iv) the participant’s gross negligence, including in a supervisory capacity, that causes significant financial or reputational harm to the Company; (v) conviction of, or plea of guilty or nolo contendere by, the participant to a felony or any crime involving moral turpitude; or (vi) a finding by a court of competent jurisdiction in a civil action or by the SEC that the participant has violated any Federal or state securities law.
Change in Control Severance Plan
We maintain the 2015 Change in Control Severance Plan, as amended (the “CIC Severance Plan”). Messrs. Reed and Horne each participate in the CIC Severance Plan, and each of their multipliers (as described below) are two.
In the event of a participant’s involuntary termination without Cause or resignation for Good Reason within two years following a Change in Control, if the participant executes a release and agrees to certain restrictive covenants, in addition to any compensation and benefits that the participant may be entitled to receive under the Key EE Severance Plan or letter agreement with the Company, the participant is also entitled to receive:
| ● | any unpaid base salary or bonus through the date of termination; |
| ● | a prorated annual bonus for the portion of the fiscal year elapsed prior to the termination date in an amount equal to the average annual bonus the participant earned with respect to three fiscal years immediately prior to the fiscal year in which the termination date occurs prorated for the portion of the fiscal year elapsed prior to the termination date; |
| ● | an amount equal to a “multiplier” that is designated for the participant times the sum of: (i) the participant’s annual base salary at the highest rate of salary during the 12-month period immediately prior to the termination date or, if higher, during the 12 month period immediately prior to the change in control (in each case, as determined without regard for any reduction for deferred compensation, 401(k) plan contributions and similar items); and (ii) the higher of (A) the average annual bonus the participant earned with respect to the three fiscal years immediately prior to the fiscal year in which the change in control occurs and (B) the average annual bonus the participant earned with respect to the three fiscal years immediately prior to the fiscal year in which the termination occurs; and |
| ● | an amount equal to the monthly COBRA cost of the participant’s medical and dental coverage in effect as of the date of termination multiplied by the lesser of (A) 18 or (B) 24 minus the number of full months between the date of the change in control and the date of termination. |
In the event of a participant’s involuntary termination without Cause or resignation for Good Reason prior to a Change in Control, and the participant reasonably demonstrates that the prior termination (i) was at the request of any third party participating in or causing the Change in Control, or (ii) otherwise arose in connection with, in relation to, or in anticipation of the Change in Control, then the participant is entitled to payments and benefits under the CIC Severance Plan.
The CIC Severance Plan defines “Change in Control” to mean: (a) the acquisition by person of beneficial ownership of 20% or more of either the outstanding shares of Company’s common stock or the combined voting power of the Company’s outstanding voting securities; (b) the individuals who constitute the incumbent Board cease for any reason to constitute at least a majority of the Board; (c) the consummation of a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving the Company or any of its subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity by the Company or any of its subsidiaries; or (d) the approval of the stockholders of a complete liquidation or dissolution of the Company. Certain acquisitions and transactions are excluded from the definition of a Change in Control: (i) any acquisition directly from or by the Company; (ii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or one of its affiliates; (iii) any acquisition or transaction if all or substantially all of the persons who were the beneficial owners of the outstanding company common stock and the outstanding company voting securities immediately prior to such acquisition or transaction beneficially own, directly or indirectly, more than 50% of the outstanding shares of common stock and the combined voting power of the outstanding voting securities of the Company or entity resulting from such transaction; (iv) any acquisition or transaction if no person (excluding any employee benefit plan (or related trust) of the Company or entity resulting from such transaction) beneficially owns, directly or indirectly, 20% or more of the outstanding shares of the Company’s common stock or the common stock of the entity resulting from the transaction or the combined voting power of the outstanding voting securities of the Company or the entity resulting from the transaction, except to the extent that such ownership existed prior to the acquisition or transaction; and (v) any acquisition or transaction at least a majority of the members of the Board or the board of directors of the entity resulting from the transaction were members of the incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such acquisition or transaction.
Under the CIC Severance Plan, “Cause” has the meaning given such term in the Key EE Severance Plan.
The CIC Severance Plan defines “Good Reason” to mean the occurrence after a change in control of any of the following without the participant’s express written consent, unless fully corrected prior to the date of termination: (i) the material diminution of the participant’s duties, authorities or responsibilities from those in effect immediately prior to the change in control; (ii) a material reduction in the participant’s base salary or target bonus opportunity as in effect on the date immediately prior to the change in control; (iii) the relocation of the participant’s office from the location at which the participant is principally employed immediately prior to the date of the change in control to a location 35 or more miles farther from the participant’s residence immediately prior to the change in control; (iv) the failure by the Company to pay any material compensation or benefits due to the participant; (v) the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform the CIC Severance Plan, or if the business of the Company for which the participant’s services are principally performed is sold at any time within 24 months after a change in control, there is a material diminution of the participant’s duties, authorities or responsibilities from those in effect immediately prior to the change in control; or (vi) any purported termination of the participant’s employment that is not effected pursuant to a notice of termination satisfying the requirements of the CIC Severance Plan.
Offer Letter Agreements
Mr. Reed — We entered into an offer letter agreement with Mr. Reed, effective January 1, 2021, pursuant to which Mr. Reed became our employee and serves as our Chief Executive Officer. Pursuant to Mr. Reed’s agreement, he is entitled to an annual base salary of at least $900,000 and an annual cash bonus target of at least 110% of his base salary. Pursuant to Mr. Reed’s agreement, he is eligible to participate in our Key EE Severance Plan, as amended, and our CIC Severance Plan.
Mr. Horne — We entered into an offer letter agreement with Mr. Horne, effective as of April 7, 2020, pursuant to which he serves as our Chief Financial Officer and Chief Accounting Officer. Mr. Horne’s agreement provides that he is entitled to an annual base salary of at least $600,000 and an annual cash bonus target of at least 100% of his base salary. In the event that Mr. Horne’s employment is involuntarily terminated by the Company without Cause or he resigns for Good Reason, his agreement provides that he is entitled to receive an amount equal to the sum of his annualized base salary and cash bonus for the most recently completed fiscal year. “Cause” and “Good Reason” have the meanings given such terms by the CIC Severance Plan, described above. Mr. Horne’s agreement contains standard non-solicitation restrictions. Pursuant to Mr. Horne’s agreement, he is eligible to participate in our CIC Severance Plan.
2022 Summary Compensation Table
| Name (Position) | Year | Salary ($) |
Bonus ($) |
Stock Awards (1) ($) |
Non-Equity Incentive Plan Compensation (2) ($) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
All Other Compensation (5) ($) |
Total ($) |
| Michael E. Reed (3) | 2022 | 859,615 | 513,652 (4) | 1,999,998 |
— |
— |
6,184 |
3,379,449 |
| Chairman and CEO | 2021 | 900,000 |
— |
6,074,000 | 767,052 |
— |
— | 7,741,052 |
| Douglas E. Horne | 2022 | 686,539 | 328,738 (4) | 1,166,663 |
— |
— | 16,184 | 2,198,124 |
| CFO & CAO | 2021 | 600,000 |
— |
581,318 | 562,380 |
— |
10,000 | 1,753,698 |
| 2020 | 445,385 | 600,000 (6) | 601,333 | — | — | 218,595 | 1,865,313 |
| (1) | The amounts in this column reflect the aggregate grant date fair value of the stock awards for each year pursuant to FASB ASC Topic 718, Compensation – Stock Compensation. Additional details on accounting for stock-based compensation can be found in Note 12 (Supplemental equity information) to our consolidated financial statements contained in our 2022 Annual Report on Form 10-K. Pursuant to FASB ASC Topic 718, the number of shares and the grant date fair value of the performance-vesting stock units granted in 2022 (the “2022 PSUs”) included only the portion of the 2022 PSUs assigned to the 2022 annual performance period; the number of shares and grant date fair values of the 2022 PSUs assigned to the 2023 and 2024 annual performance periods will be reported in 2023 and 2024, respectively, using a grant date when the performance target for each such annual performance period is set by the Compensation Committee. The maximum grant date fair values of the 2022 PSUs assigned to the 2022 performance period are $999,997 for Mr. Reed and $333,332 for Mr. Horne. |
| (2) | The amounts in this column reflect the cash incentive payments received for each year under the ABP. |
| (3) | Prior to 2021, our Chief Executive Officer was an employee of, and was compensated by, our former manager, and our former manager did not disclose to our Board the compensation paid to him. While our Chief Executive Officer devoted a substantial portion of his time to us in prior years, he did not exclusively provide services to us and he did not receive any compensation from us. This structure limited the authority of our Compensation Committee to make compensation decisions and provide compensation disclosure for our Chief Executive Officer. |
| (4) | For 2022, we did not establish formal bonus performance metrics under the ABP for the NEOs in 2022 given the uncertainty facing us at the beginning of 2022 and the business restructuring we completed in June. The Compensation Committee decided that it would use its judgment to determine an incentive payout based on the same framework used under the ABP for 2021, which was based 50% on Adjusted EBITDA, 25% on key growth drivers and 25% on individual performance, and measured performance results against the budgeted Adjusted EBITDA and key growth drivers for 2022. |
| (5) | The amounts in the “All Other Compensation” column for 2022 reflect the following: |
| Gannett Foundation Executive Grant Program |
Company Matching Contributions to Gannett 401(k) Plan | |
| Michael E. Reed | — | $6,184 |
| Douglass E. Horne | $10,000 | $6,184 |
| (6) | This amount reflects the cash bonus Mr. Horne received for 2020, which was paid without proration in light of Mr. Horne’s performance during 2020 and in consideration of the extraordinary circumstances he faced. |
Grants of Plan-Based Awards in 2022
The following table shows the plan-based awards granted during fiscal year 2022 to each of our NEOs:
| Name | Award Type (1) | Grant Date | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Other Stock Awards: Number of Shares of Stock or Units (#) |
Grant Date Fair Value of Stock (2)(3) ($) |
||
| Threshold # | Target # | Maximum # | |||||
| Michael | RSA (4) | 3/23/2022 | 323,974 | 1,500,000 | |||
| E. Reed | PSU (5) | 3/23/2022 | 53,996 | 107,991 | 215,982 | 499,998 | |
| Douglas | RSA (4) | 3/23/2022 | 107,991 | 499,998 | |||
| E. Horne | PSU (5) | 3/23/2022 | 17,999 | 35,997 | 71,994 | 166,666 | |
| RSA (6) | 6/14/2022 | 162,866 | 499,999 | ||||
| (1) | PSUs are performance-vesting stock units and RSAs are time-vesting shares of restricted stock. We did not establish formal bonus performance metrics under the ABP for the NEOs in 2022 given the economic uncertainties at the beginning of 2022 and the business restructuring we commenced in June 2022. |
| (2) | Under FASB ASC Topic 718, if an award of a target number of shares is made at the beginning of a multi-year performance period with a portion of the award allocated to each of successive annual performance periods, and the performance target for each annual performance period is set at the beginning of that annual performance period, then each annual performance period has a separate grant date when the performance target for that annual performance period is set for purposes of measuring the grant date fair value of the portion of the award allocated to that annual performance period. Therefore, the number of shares and the grant date fair value of the 2022 PSUs at threshold, target and maximum reflect only the portion of the 2022 PSUs assigned to the 2022 annual performance period. The number of shares and grant date fair values of the 2022 PSUs assigned to the 2023 and 2024 annual performance periods will be reported in 2023 and 2024, respectively, using a grant date when the performance target for each such annual performance period is set by the Compensation Committee. |
| (3) | The amounts shown in this column represent the aggregate grant date fair value of awards pursuant to FASB ASC Topic 718, Compensation – Stock Compensation. Additional details on accounting for stock-based compensation can be found in Note 12 (Supplemental equity information) to our consolidated financial statements contained in our 2022 Annual Report on Form 10-K. |
| (4) | Pursuant to the award agreement for these RSAs, 33.3% vested on March 24, 2023, 33.3% will vest on March 24, 2024, and the remaining 33.4% will vest on March 24, 2025, subject to Mr. Reed’s and Mr. Horne’s continued service through each vesting date. The RSAs may vest earlier upon Mr. Reed’s or Mr. Horne’s death or disability, as described in “Potential Payments upon Termination or Change of Control” below. |
| (5) | The 2022 PSUs have a three-year performance period (2022-2024) consisting of three separate annual performance periods, with one-third of the target number of shares assigned to each annual performance period, and the performance target for annual performance period is set by the Compensation Committee at the start of that year. The PSUs will vest on the third anniversary of the grant date subject to the performance achieved for each annual performance period and continued employment through such date, but may vest earlier upon the NEO’s death, disability, or termination without cause, including following a change in control of the Company, as described in “Potential Payments upon Termination or Change of Control” below. The threshold level of performance set by the Compensation Committee for the 2022 annual performance period was not met, and therefore the portion of the PSUs assigned to such performance period were forfeited. |
| (6) | Pursuant to the award agreement for this RSA, 33.3% will vest on June 15, 2023, 33.3% will vest on June 15, 2024, and the remaining 33.4% will vest on June 15, 2025, subject to Mr. Horne’s continued service through each vesting date. The RSAs may vest earlier upon Mr. Horne’s death or disability, as described in “Potential Payments upon Termination or Change in Control” below. |
Outstanding Equity Awards at December 31, 2022
The table below sets forth the outstanding stock awards that were granted to our NEOs as of December 31, 2022. There were no outstanding stock options held by our NEOs as of December 31, 2022.
| Stock Awards | |||||
| Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested (1) ($) |
Equity Incentive Plan: Number of Unearned Shares, Units, or Other Rights that Have Not Vested (#) |
Equity Incentive Plan: Market or Payout Value of Unearned Shares, Units, or Other Rights that Have Not Vested (1) ($) |
| Michael E. Reed | 1/8/2021 | 689,048 (2) | 1,398,767 | 310,952 (2) | 631,233 |
| 3/23/2022 | 323,974 (3) | 657,667 | |||
| 215,983 (4) | 438,445 | ||||
| Douglas E. Horne | 4/7/2020 | 27,833 (3) | 56,501 | ||
| 6/1/2020 | 133,600 (3) | 271,208 | |||
| 3/3/2021 | 73,297 (3) | 148,793 | |||
| 3/23/2022 | 107,991 (3) | 219,222 | |||
| 6/14/2022 | 162,866 (3) | 330,618 | |||
| 71,994 (4) | 146,148 | ||||
| (1) | The market value of shares or units that have not vested was calculated using a stock price of $2.03, which was the closing price of our common stock on December 30, 2022, the last trading day of our fiscal year. |
| (2) | These PSUs consisted of 1,378,096 shares awarded as an inducement award and 621,904 shares awarded under our 2020 Plan. Of the aggregate PSUs, 1,000,000 shares of common stock vested on December 31, 2022, and the remainder of up to 1,000,000 shares will vest on December 31, 2023, upon the achievement of specified stock price goals (ranging from $4.00 per share to $10.00 per share, based on the highest 20 consecutive trading day average). |
| (3) | These restricted stock awards vest 33.3% of shares on the first anniversary of the grant date, 33.3% on the second anniversary of the grant date, and the remaining 33.4% on the third anniversary of the grant date. |
| (4) | Represents the target number of shares that may be issued pursuant to the 2023 and 2024 tranches of the 2022 PSUs based on achievement of performance at target. We are disclosing the 2023 and 2024 tranches valued as of December 31, 2022 in order to provide you with a more complete disclosure of the grant opportunity provided to the NEO, however, under FASB ASC Topic 718, these portions of the 2022 PSUs were not considered granted as of December 31, 2022 because the applicable performance target for these tranches had not yet been established. See footnote 2 to the Grant of Plan-Based Awards Table regarding the treatment under FASB ASC Topic 718 of awards with a multi-year performance period where the performance target for each annual performance period is set at the beginning of each annual performance period. |
Stock Vested in 2022
The following table provides information about the stock awards held by our NEOs that vested during fiscal year 2022. Our NEOs did not have any outstanding stock options that vested during fiscal year 2022.
| | | Stock Awards | ||||||
| Name | | | Number of Shares Acquired on Vesting (#) |
| | Value Realized on Vesting (1) ($) |
||
| Michael E. Reed | | | 1,000,000 | 2,030,000 | ||||
| | | | | |||||
| Douglas E. Horne | 36,593 | 177,842 | ||||||
| | | 27,723 | 116,991 | |||||
| 133,067 | 522,953 | |||||||
(1) The value realized on vesting is equal to the number of shares vested multiplied by the closing price of a share of our common stock on the vesting date (or if such date falls on a weekend or public holiday, the closing price of a share of our common stock on the date immediately prior to the vesting date on which our shares traded).
Pension Benefits
None of our named executive officers were participants in a tax-qualified defined benefit plans or supplemental executive retirement plans during the fiscal year ended December 31, 2022.
2022 Non-Qualified Deferred Compensation
Neither Mr. Reed nor Mr. Horne are eligible to participate in any nonqualified deferred compensation plans maintained by us. Accordingly, there were no contributions or withdrawals by them under such arrangements during the 2022 fiscal year.
Potential Payments Upon Termination or Change in Control
The following table estimates the amount of compensation payable to Messrs. Reed and Horne in the event of termination of employment, assuming that such terminations were effective as of December 31, 2022.
Potential Payments upon Termination or Change of Control
| Change in Control – Involuntary without Cause or Voluntary for Good Reason ($) |
Involuntary without Cause ($) |
Voluntary for Good Reason ($) |
Voluntary Termination without Good Reason ($) |
Death or Disability ($) |
||
| Michael E. Reed | ||||||
| Annual Cash Bonus | 767,052 | 513,652 | — | — | — | |
| Severance Pay | 4,934,104 | 1,600,000 | — | — | — | |
| Performance Stock Units | 748,020(1) |
— | — | — | — | |
| Restricted Stock Awards | — | — | — | — | 657,667(2) | |
| Executive Insurance and Related Benefits (3) | 33,190(4) | — | — | — | — | |
| Total | 6,482,366 | 2,113,652 | — | — | 657,667 | |
| Douglas E. Horne | ||||||
| Annual Cash Bonus | 581,190 | 328,738 | — | — | — | |
| Severance Pay | 2,562,380 | 1,262,380 | 1,262,380 | — | — | |
| Performance Stock Units | 146,148(5) | — | — | — | — | |
| Restricted Stock Awards | — | — | — | — | 1,026,342(2) | |
| Executive Insurance and Related Benefits (3) | 43,249(4) | — | — | — | — | |
| Total | 3,332,967 | 1,591,118 | 1,262,380 | — | 1,026,342 |
| (1) | The value of PSUs is determined by multiplying the number of PSUs that would have vested as of December 31, 2022 in the event of termination without cause or for good reason in connection with a change in control by $2.03, the closing price of a share of our common stock as of December 30, 2022. For Mr. Reed’s 2021 PSU award, the average highest 20-day closing price for the period of January 8, 2021 through December 31, 2022 was $6.61 which would have resulted in the vesting of 152,500 PSUs. For Mr. Reed’s 2022 PSU award, the remaining 215,983 of the 2022 PSU award assigned to the 2023 and 2024 annual performance periods would have vested. |
| (2) | The value of restricted stock awards is determined by the number of unvested shares of restricted stock that would have vested if Mr. Reed’s and Mr. Horne’s employment had been terminated as a result of death or disability on December 31, 2022 multiplied by $2.03, the closing price of a share of our common stock as of December 30, 2022. In the event of termination due to death or disability, all unvested shares of restricted stock vest immediately. |
| (3) | Amounts shown in this row do not include insurance and related benefits that are available generally to all salaried Company employees under plans and arrangements that by their terms do not discriminate in favor of executive officers. |
| (4) | This amount represents the monthly COBRA cost of medical and dental coverage for 18 months based on the rates in effect on December 31, 2022. |
| (5) | The value of PSUs is determined by multiplying the number of PSUs that would have vested as of December 31, 2022 in the event of termination without cause or for good reason in connection with a change in control by $2.03, the closing price of a share of our common stock as of December 30, 2022. For Mr. Horne’s 2022 PSU award, the remaining 71,994 of the 2022 PSU assigned to the 2023 and 2024 annual performance periods would have vested. |
Compensation of Directors
For 2022, each non-employee director received an annual retainer fee of $100,000 (or a pro-rated portion of such fee for directors who served for part of the year), payable quarterly. In addition, the chairs of each standing committee of the Board, including the Audit, Nominating and Corporate Governance, Compensation, and Transformation Committees of the Board, received an additional annual fee of $20,000, and the Lead Director received an additional annual fee of $40,000. For 2022, the annual retainer fees and additional annual fees to non-employee directors were paid in cash, except with respect to Mr. Louis, who elected to receive his annual retainer fee in shares of our common stock. Directors who are employed by us do not receive compensation for their service as members of the Board.
For 2022, each non-employee director also received an annual stock grant with a value of $125,000. The grant was made on June 7, 2022, and the number of shares of stock awarded was determined by dividing the value of the annual stock grant ($125,000), by the closing price of a share of our common stock on the grant date ($3.79).
Each non-employee director is also eligible for a match from the Gannett Foundation on charitable gifts made by the non-employee director to eligible charitable organizations up to a maximum of $10,000 per year.
Members of the Board, other than Mr. Reed, are also reimbursed for reasonable costs and expenses incurred in attending meetings of our Board.
2022 Director Compensation Table
| Name | Fees Earned or Paid in Cash (1) ($) |
Stock Awards (2) ($) |
All
Other Compensation (3) ($) |
Total ($) |
||||
| Michael E. Reed (4) | — | — | — | — | ||||
| Kevin M. Sheehan | 160,000 | 125,000 | — | 285,000 | ||||
| Vinayak Hegde | 50,000 (5) | — | — | 50,000 | ||||
| Theodore P. Janulis | 120,000 | 125,000 | 5,500 | 250,500 | ||||
| John Jeffry Louis III | 100,000 (6) | 125,000 | — | 225,000 | ||||
| Maria M. Miller | 100,000 | 125,000 | — | 225,000 | ||||
| Amy E. Reinhard | 50,000 (7) | 125,000 | — | 175,000 | ||||
| Debra A. Sandler | 120,000 | 125,000 | — | 245,000 | ||||
| Laurence Tarica | 120,000 | 125,000 | 10,000 | 255,000 | ||||
| Barbara W. Wall | 100,000 | 125,000 | — | 225,000 |
| (1) | Amounts in this column reflect the annual retainer fee paid to each of our non-employee directors, the additional annual fee of $40,000 paid to Mr. Sheehan for his services as our Lead Director, and the additional fee of $20,000 paid to each of Messrs. Sheehan, Janulis and Tarica and Ms. Sandler for as chairs of the Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee and Transformation Committee, respectively. |
| (2) | The amounts in this column reflect the aggregate grant date fair value of the stock awards for each year pursuant to FASB ASC Topic 718, Compensation – Stock Compensation. These amounts reflect the annual stock grants made to each of our non-employee directors of 32,981 shares of common stock on June 7, 2022. The number of shares of stock was determined by dividing the value of the annual stock grant ($125,000), by the closing price of a share of our common stock on the grant date ($3.79). |
| (3) | Amounts in this column represent charitable gifts made by the Gannett Foundation pursuant to the Gannett Match program. The Gannett Match program matches eligible gifts made by Company employees and directors up to an aggregate of $10,000 a year. Gifts must be made to eligible organizations, including tax-exempt charitable organizations, tax-exempt hospitals or medical centers, and tax-exempt colleges, universities, graduate or professional schools, engineering or technical institutions and public and private preschools, elementary and secondary schools in the U.S. and its territories. |
| (4) | Mr. Reed is an employee and receives no compensation for services as a director. |
| (5) | Mr. Hegde received a pro-rated annual fee for 2022 since he did not stand for reelection at our 2022 annual meeting of stockholders. |
| (6) | Mr. Louis elected to receive his annual retainer fee in shares of our common stock in 2022. He was awarded 5,543 shares on March 31, 2022; 8,620 shares on June 30, 2022; 16,339 shares on September 30, 2022; and 12,315 shares on December 31, 2022. The number of shares was determined by dividing the foregone annual retainer fee by the closing price of a share of our common stock on the grant date. |
| (7) | Ms. Reinhard received a pro-rated annual fee for 2022 since she was elected to the Board in June 2022. |
Director Stock Ownership Guidelines
To provide for non-employee directors to have an appropriate equity ownership in the Company in order to more closely align their economic interests with those of other Company stockholders, the Board requires non-employee directors to own equity securities of the Company (including any restricted stock, restricted stock units and vested options) with a value of at least three times the amount of the non-employee director’s annual cash retainer for service on the Board. Non-employee directors must achieve the required level of stock ownership within five years of his or her first election to the Board.
The Board will evaluate whether exceptions should be made under these guidelines in the case of any non-employee director who, due to his or her unique circumstances, would incur a hardship in complying with this requirement and, from time to time, may exercise discretion in light of applicable circumstances. The Compensation Committee will periodically assess these guidelines and the non-employee directors’ ownership relative to such guidelines, and make recommendations with respect to these guidelines, as appropriate.
As of December 31, 2022, all of our non-employee directors, except Ms. Reinhard who joined the Board in 2022, had met the required level of stock ownership.
Equity Compensation Plan Information
The following table summarizes certain information about securities authorized for issuance under our equity compensation plans as of December 31, 2022:
| Plan Category | | Number of Securities to be Issued Upon Exercise of Outstanding Options and Rights (a) |
| Weighted-Average Exercise Price of Outstanding Options and Rights (b) (1) |
| Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) |
| Equity compensation plans approved by security holders: | | | | |||
| Gannett Co., Inc. 2020 Omnibus Incentive Compensation Plan (2) | | 7,228,559 | | $ 13.97 | | 6,462,868 (3) |
| Equity compensation plans not approved by security holders: | | | | |||
| Gannett Co., Inc. 2020 Omnibus Incentive Compensation Plan Roll-Over Shares (4) | 158,388 | — | 436,041 | |||
| Performance Restricted Stock Unit Award Agreement, effective as of January 8, 2021, with Mr. Reed (5) | 689,048 | — | — | |||
| Total | | 8,075,995 | | $ 13.97 | | 6,898,909 |
| (1) | The weighted-average exercise price does not take into account the shares issuable upon vesting of outstanding restricted stock units, which do not have an exercise price. |
| (2) | This row does not include the shares of our common stock that remained available for issuance under the 2015 Plan, which were added to the 2020 Plan by Amendment No. 1, which are reflected in a separate 2020 Plan row under “Equity compensation plans not approved by security holders.” |
| (3) | The maximum number of shares reserved and available for issuance under the 2020 Plan is 15,000,000. |
| (4) | This row represents the shares of our common stock that remained available for issuance under the 2015 Plan that were rolled-over to the 2020 Plan by Amendment No. 1, the use of which is subject to the limitations of Rule 303A.08 of the NYSE Listed Company Manual. The 2015 Plan was established by Legacy Gannett and was initially assumed by the Company in connection with the Acquisition. The 2015 Plan was not approved by the Company’s stockholders. On December 21, 2020, our Board authorized the freeze of the 2015 Plan and no new awards may be granted pursuant to the 2015 Plan after such date. |
| (5) | Pursuant to this Agreement, up to 689,048 shares of common stock are eligible to vest on December 31, 2023 upon the achievement of specified stock price goals (ranging from $4.00 per share to $10.00 per share, based on the highest 20 consecutive trading day average). |
Compensation Committee Report
The Compensation Committee has reviewed and discussed the 2022 Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with the Company’s management.
Based on this review and their discussions, the Compensation Committee has recommended to the Board that the 2022 Compensation Discussion and Analysis be included in this proxy statement for the 2023 Annual Meeting to be filed with the SEC.
| The Compensation Committee |
|
| Theodore P. Janulis, Chair John Jeffry Louis III Kevin M. Sheehan |
CEO PAY RATIO
Our CEO to median compensated employee pay ratio is 1:66, with the 2022 Summary Compensation Table annual total compensation amount for Mr. Reed being $3,379,449 and the equivalent annual total compensation for the identified median compensated employee being $51,035.
To determine our median compensated employee, we reviewed our global employee population, consisting of approximately 11,300 U.S. employees and approximately 2,900 non-U.S. employees who were employed by us as of December 31, 2022. The approximate number of excluded employees by country were as follows: Canada (30) and India (680). As a result, our median compensated employee determination includes approximately 13,500 employees (including approximately 2,100 in the U.K., 60 in Australia, and 40 in New Zealand), whether full-time or part-time, which represents approximately 95% of our global employee population as of December 31, 2022.
To identify our median compensated employee from the selected employee population, we used Form W-2 box 5 wages (and the equivalent amounts for our non-US employees) as our consistently applied compensation measure (“CACM”). We annualized the CACM for permanent employees that were newly hired in 2022, and we did not make any cost-of-living adjustments. We excluded employees who had been on leave for more than one year.
To calculate the annual total compensation for our median compensated employee, we used a methodology consistent with that used for the 2022 Summary Compensation Table. We did not make any assumptions, adjustments, or estimates with respect to annual total compensation.
Because SEC rules for identifying a median compensated employee allow companies to apply certain exclusions, include estimates, and adopt different methodologies that reflect their employee population and compensation practices, the ratio above may not be comparable to the CEO pay ratio reported by other companies.
