Trinity Mirror Pays Up for a New CEO


LONDON -- Trinity Mirror (ISE: TNI.L) shareholders have been left in limbo since the middle of June following the abrupt departure of former CEO Sly Bailey. That said, the company's share price is up by more than 40% since then, so perhaps they aren't too fussed!

Today they found out that Simon Fox, who was in charge of HMV for six years before announcing his departure earlier this month, is to be Trinity Mirror's new CEO. He starts on Sept. 10.

Prior to running HMV, Fox also held senior management positions at Kesa Electricals and Kingfisher. He does have experience in the newspaper world, however, as he is currently a nonexecutive at Guardian Media Group.

Given that Bailey attracted a lot of criticism for the size of her pay package -- she was paid more than 1 million pounds in 2011 -- while overseeing an ever-shrinking business, the remuneration details disclosed for Simon Fox's appointment may raise a few eyebrows. It's less than Bailey received, but arguably not by much.

Explaining Fox's pay package, Trinity Mirror said:

Simon's base pay will be 500,000 pounds per annum. He will have a bonus potential of 75% of salary of which 50% is payable in cash and 50% in restricted shares (the release of which will be deferred for 3 years). For 2012 the bonus will be subject to a series of stretching operating profit and revenue targets. He will receive a cash allowance in lieu of pension of 15% of salary. He will participate in the new Long Term Incentive Plan that was agreed by shareholders at this year's AGM.

For 2012 he will receive an initial grant of performance shares under the LTIP equivalent in value to 80% of his salary. He will also receive a one-off joining grant of performance shares equivalent in value to 120% of his salary. Vesting of the performance shares will be subject to performance targets that require significant growth in the share price over the performance period.

Bailey received an annual salary of 750,000 pounds in 2011, and the maximum bonus she was entitled to was 825,000 pounds (110% of her salary). As it turned out, her eventual bonus came to 248,000 pounds.

Trinity Mirror investors seem to be giving Fox the benefit of the doubt for now, with the shares up 6% on the day to 39 pence. However, the publisher still trades on an astonishingly low price-to-earnings multiple of less than two times expected profits for 2012.

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