financial performance measures was 60% against adjusted operating income, 20% against net advertising and marketing services revenue, and 20% against net circulation revenue. For the adjusted
operating income financial performance metric, the threshold, target and maximum performance ranges were 100%, 169%, and 200%, respectively, and the threshold, target and maximum bonus payout ranges were 10%, 100%, and 140% respectively. Threshold,
target and maximum performance and payout ranges for the net advertising and marketing services revenue component was 95%, 100%, and 105%, respectively, for performance and 10%, 100%, and 200%, respectively, for payout. Threshold, target and maximum
performance and payout ranges for the net circulation revenue component were 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 2021, 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 and support of
the CEO and Board of Directors with corporate initiatives, including the reverse stock split, diversity, equity and inclusive initiatives, and negotiations with the news guild. Mr. Moises individual objectives included: accelerated growth
of subscription revenue, and an evaluation of senior leadership roles and implementation of recommendations for changes to the Companys organizational structure, including the hiring of key positions. For 2021, Ms. Murrays and
Mr. Moises individual objectives paid out at 110% and 112.5% respectively, or $120,657 and $281,250, respectively.
Financial Performance Goals and Results for 2021. The tables below show the financial performance goals for 2021 for each of the
corresponding performance levels (threshold, target and maximum) and our actual financial performance results for 2021. 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 2021 financial plan approved by the Board of Directors for severance costs and
miscellaneous one-time items.
The following table sets forth the financial metrics for 2021 for
Ms. Murray and for Mr. Moise:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Metric |
|
Threshold Level Goals As % of Target (10% Funding) |
|
|
Target Level Goals (100% Funding) |
|
|
Maximum Level Goals As % of Target (140/ 200% Funding) |
|
|
Actual Results (as adjusted) |
|
|
|
|
|
|
Adjusted Operating Income (Loss) |
|
$ |
(6,508,000 |
) |
|
$ |
(2,017,000 |
) |
|
$ |
0 |
|
|
$ |
(3,645,000 |
) |
|
|
|
|
|
Net Advertising and Marketing Services Revenue |
|
$ |
72,957,000 |
|
|
$ |
76,797,000 |
|
|
$ |
80,637,000 |
|
|
$ |
73,271,000 |
|
|
|
|
|
|
Net Circulation Revenue |
|
$ |
60,683,000 |
|
|
$ |
63,877,000 |
|
|
$ |
67,071,000 |
|
|
$ |
64,943,000 |
|
Summary of Annual Cash Incentive Bonus Payouts. Net circulation revenue
paid out at 134% of target, and adjusted operating income and net advertising and marketing services revenue paid out at 67.2% and 15.5% of target, respectively. Accordingly, Ms. Murray and Mr. Moise received aggregate annual cash
incentive bonus payouts of $77,100 and $175,727, respectively.
Long-Term Incentive Compensation. 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. The executive
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