GateHouse CEO Reed Got Bigger Bonus, Less Stock In Loss-Making 2007

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By: Mark Fitzgerald

In a year when GateHouse Media Inc. lost $231 million, CEO Michael E. Reed received a bump in his bonus to $350,000 for 2007, but he was granted far fewer restricted stock units than in 2006.

With a base salary of $500,000, Reed’s cash compensation totaled $850,000 for 2007, according to a proxy filed Tuesday with the Securities and Exchange Commission (SEC). In 2006, his base salary was the same, but the bonus was $200,000.

Reed, 41, was granted 75,633 restrict stock units, stock that vests over time and is designed to retain senior executives. This was the same amount granted other top executives of the acquisitive community newspaper publisher of 101 dailies, 282 weeklies, and 132 shoppers.

In 2006, he was granted 4,299,000 restricted stock units. In the time when the units are not vested, executives can still get the dividend on the stock, which until recently was far higher than most newspaper companies pay out. In 2007, GateHouse said, Reed received $429,380 in dividends from unvested stock.

GateHouse said at the end of 2007, $931 million was outstanding on the various terms loans of its 2007 credit facility. Cash interest payments were $74.9 million for the year.

Revenues for the year totaled $589 million, and the companies “adjusted EBITDA,” a non-GAAP measure of cash flow that does not include interest payments, depreciation, amortization or other one-time costs, was $104.6 million.

Fairport, N.Y.-based GateHouse holds it annual meeting May 22. The principal business is the reelection of two directors, Reed, and Burl Osborne, the former Dallas Morning News publisher.

In mid-day trading, GateHouse (NYSE: GHS) was at $5.88, up 9 cents, or 1.55%, from the opening. It has traded in a 52-week range of $4.80 to $22.18.

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