New York Times Co. Discloses Bonus, Stock Option Snafus

By: Mark Fitzgerald and Jennifer Saba New York Times Co. Chairman Arthur Sulzberger Jr. and CEO Janet Robinson were inadvertantly awarded stock options and given opportunities for cash bonuses far in excess of internal compensation policies, the company disclosed in a regulatory filing late Friday.

After markets closed, the Times Co. filed a Form 8-K with the U.S. Securities and Exchange Commission (SEC) disclosing the overcompensation. The filing said the Times Co.'s 1991 executive incentive plans limits the number of stock options any person can be awarded in a single year to 400,000.

But in 2008, Robinson was granted 650,000, and another 500,000 in 2009, the company said. This year, it added, Sulzberger was granted 500,000 options.

The filing said Robinson and Sulzberger have agreed that the excess options are "null and void."

But to compensate the two for the lost value, the board of directors' compensation committee drafted up a new plan granting "replacement" SARs, or stock appreciation rights.

The so-called "strike price" for these SARs is equal to original exercise price of the null and void excess options. The strike price for the 2008 options is $20.23 a share, and for the 2009 options is $3.62.

The Times Co, trading on the New York Stock Exchange under the symbol NYT, closed trading Friday at $8.36 a share.

In addition to the excess stock option awards, the Times Co.'s SEC filing disclosed that Sulzberger and Robinson were each also granted long-term performance awards for two three-year cycles, one beginning this year and the second starting in 2010.

The awards were intended to have maximum payouts of $2 million each. But the company said it discovered that if either achieved the performance goals to the maximum, that person would be eligible for a cash payment of $3.5 million.

However, the Times Co.'s long-term incentive plan sets a limit of $3 million to any person in any year.

"Accordingly, the independent directors of the company's board, after consultation with the other non-management directors, have modified the terms of such grants to fix the maximum potential payout at $3,000,000," the Times SEC filing says.