Philly Newspapers boss Tierney made $1.175M in '08

April 23, 2009 6:13:44 PM PDT
The company that owns The Philadelphia Inquirer and Philadelphia Daily News hosted a $233,000 trip to Rome for about 70 people a year before filing for bankruptcy protection. The six-day Philadelphia Newspapers trip was an incentive for advertising managers and major advertisers, Executive Vice President Richard Thayer told a U.S. bankruptcy trustee Thursday. The three top executives - Chief Executive Brian Tierney, Thayer and Executive Vice President Mark Frisby - and their wives also attended, he said.

"It was at a time when the financial situation was very different, but I think this is a fairly typical and standard type of advertising sales program," newspaper spokesman Jay Devine said of the March 2008 trip.

Philadelphia Newspapers LLC filed for bankruptcy protection in February 2009, citing $395 million in debt.

Recent court filings also show that Tierney collected $1.175 million in salary and bonuses last year, somewhat higher than previously disclosed. Tierney's compensation included $650,000 in salary, a $350,000 bonus for 2008, a $175,000 bonus for 2007 and $81,000 in transportation costs.

In questioning from a creditor's lawyer, Thayer defended his own 2008 bonus of $150,000, a sum that came atop his $420,000 salary and $60,000 cash housing allowance. He called it appropriate for a financially troubled company to boost executives' pay because there is more work to do and a need for incentives to keep them onboard.

"The bonuses aren't related to whether the company makes money or not," said Thayer, who called his compensation package "a very low number" for the work he does.

Amid layoffs and the company's worsening financial outlook, editorial and other unionized employees late last year agreed to give up their scheduled raises of about $25 per week.

Court filings also show payments of about $100,000 to Tierney's nephew James R. Tierney, the real-estate advertising manager, and $50,000 to an Internet consulting company his son Brian Jr. co-owns. The company, Clipper Global, has no Web site or phone number.

According to Devine, Clipper Global has advised the company on e-mail and online marketing, boosting revenue of books, CDs and other items the company sells online.

Tierney's brother Michael is a partner in the Dilworth Paxson law firm, which has more than a dozen lawyers working on the company's bankruptcy petition.

Tierney and other local investors bought the company in 2006 for more than $500 million.

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