By: E&P Staff Private Capital Management CEO Bruce Sherman stands to gain $300 million in bonus pay if Knight Ridder is successfully sold.
PCM, which was bought by Legg Mason in 2001, could see a windfall of millions as part of the acquisition agreement if Sherman and other executives meet growth targets set for Aug. 1, The Wall Street Journal reported today. This could be one reason why PCM is calling for the sale of Knight Ridder, the paper suggests.
A spokesman for PCM told the Journal he had no comment.
On Nov. 1, PCM fired a shot to Knight Ridder executives calling for the sale of the company. PCM owns a 19% stake in Knight Ridder, making it the largest shareholder. It also owns shares in many other newspapers companies, including Belo, Gannett, Lee, McClatchy, and The New York Times Co.
Sherman is considered a shrewd investor but lately he's losing his touch. According to the Journal, year-to-date, PCM's investments have lost money -- a very rare occurrence. PCM has recorded losses in only two previous years since 1986.
PCM has been telling its investors over the course of the year that accounts have been down modestly. As of Sept. 30, PCM investments were down 0.6%, reported the Journal.
Over the past five years, PCM has stepped up its stake in Knight Ridder. However, Knight Ridder has fallen far below its high of $80 a share in 2004. This morning, the stock was trading at $61.27.
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