105%, respectively, for performance and 10%, 100%, and 200%, respectively, for payout. Threshold, target and maximum performance and payout ranges for the circulation revenue component was 95%,
100% and 105%, respectively, for performance and 10%, 100% and 200%, respectively, for payout.
The Company believes that linking one-half of the bonus opportunity directly to financial performance, with an opportunity to earn a greater payout than target bonus amount if maximum financial performance is achieved, provides participants with
significant motivation to achieve the Companys financial objectives.
For 2020, individual objectives for Ms. Murray and
Mr. Moise comprised performance metrics based on a point system allocated to each objective which included threshold, target and maximum performance ranges for each objective of 50%, 100%, and 200%, respectively. The threshold, target and
maximum payout ranges for all objectives were 50%, 100%, and 115%, respectively, with payments pro-rated for performance achievement between the three points. The Company believes that, given the transitional
state of the newspaper industry and the unpredictability of core advertising revenues, which directly affect adjusted operating income and revenue, it is important to link one-half of the bonus opportunity to
individual objectives that the NEOs can directly influence, and which have a positive qualitative and quantitative impact on the Company while increasing retention. Ms. Murrays individual objectives included implementation of financial
reporting objectives, support of operational and strategic objectives, remediation of previously-identified material weaknesses, and support of the CEO and Board of Directors with corporate initiatives. Mr. Moises individual objectives
included a review, evaluation and recommendation of integrated upgrades to the Companys financial and operating systems designed for the future of the business, accelerated growth of subscription revenue, and an evaluation of senior leadership
roles and implementation of recommendations for changes to the Companys organizational structure, For 2020, Ms. Murrays and Mr. Moises individual objectives paid out at 115% and 115% respectively, or $107,454 and
$273,125, respectively.
Financial Performance Goals and Results for 2020. The tables below show the financial performance
goals for 2020 for each of the corresponding performance levels (threshold, target and maximum) and our actual financial performance results for 2020. Actual adjusted operating income results shown in the table include adjustments for items that are
excluded for purposes of bonus calculation, as managements ability to control or influence such items is limited. The adjustments include variances above or below the levels set in the 2020 financial plan approved by the Board of
Directors for newsprint pricing, workers compensation expense, severance costs, bonus expense, self-insured medical expense above or below actuarial projections, and miscellaneous one-time items.
The following table sets forth the financial metrics for 2020 for Ms. Murray and for Mr. Moise:
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Financial Metric
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Threshold
Level Goals
As % of Target
(10% Funding)
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Target
Level Goals
(100% Funding)
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Maximum
Level Goals
As % of Target
(200% Funding)
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Actual
Results
(as adjusted)
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Adjusted Operating Income
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$
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(2,248,000
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)
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$
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(1,955,000
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)
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$
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(1,662,000
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)
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$
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(4,901,000
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)
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Advertising and Marketing Services Revenue
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$
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70,973,000
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$
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83,498,000
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$
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96,022,000
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$
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72,214,000
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Circulation Revenue
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$
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54,030,000
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$
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63,565,000
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$
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73,100,000
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$
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64,935,000
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Summary of Annual Cash Incentive Bonus Payouts. While the target level
goal for 2020 circulation revenue was met, the minimum threshold goal levels for 2020 adjusted operating income and advertising and marketing services revenue were not met. Nonetheless, in April, in response to the pandemic, the Companys
management committee determined to forgo the financial performance bonus as part of expense reduction actions. Accordingly, no financial performance bonus was paid to Ms. Murray or Mr. Moise.
Long-Term Incentive Compensation. Beginning in 2018, the Compensation and Management Development Committee approved an all-cash compensation structure for its named executive officers. The Compensation and Management Development Committee also approved changes to the vesting and payout schedule of time-based, long-term cash
incentive compensation beginning with 2019 grants for its named executive officers. Beginning with 2019 grants, the executive officers long-term, time-based cash incentive (LTCI) awards vest over a
two-year period, 50% one year from the date of grant and 50% two years from date of grant. LTCI payments are made outside of the ICP.
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