If The Company Wins, The Employees Win. We All Win.

I promised it on my first day on the job – Feb. 1st.

A couple of weeks later, I wrote to you and blogged that we would have it done in a couple of weeks.

A couple of weeks after that, I said it would be ready – you guessed it – in a couple of weeks.

Well, it took four months but we finally have it done. Today, I am proud to unveil Journal Register Company’s first-ever profit-sharing plan.  All employees should check your email, you will find a letter from me to participants along with an official description of the plan.

The concept is simple: If the Company is successful in meeting its financial targets for 2010 then employees share in the resulting profits.

In short, if the Company wins, the employees win. We all win.

Every employee, full-time or part-time, is eligible for profit sharing. Union-represented employees are eligible to participate in accordance with the profit-sharing plan and we will be reaching out to our unions to take the necessary steps.

Corporate Executives Excluded From Profit-Sharing Plan

There is, however, one group who will not be eligible to participate in the profit-sharing plan – senior executives. Our senior corporate executives, including me, and our senior publishers, responsible for our clusters, are not eligible. Those folks, including me, already have a performance bonus component as part of their compensation. It’s enough already.

This Year’s Profit-Sharing Plan Goal: Up To One Week’s Additional Pay

Our goal is to target up to one week’s pay as profit sharing for eligible employees.

To hit the pay out we have to hit our corporate financial goals. And we can’t do that unless we all do our jobs. You also need to know our financial goals and so – again for the first time in our history – we are letting the employees know exactly what those goals are. And how we are tracking to those goals.

The chart below says it all. Our goal is $40 million EBITDA – that’s Earnings Before Interest, Taxes, Depreciation and Amortization as defined in the plan. Our goal for the first quarter was $6.0 Million. We hit $8.2 Million. So we are off to a good start.

I will make sure to update you every quarter. You will know exactly how we are doing to plan. At the end of the year we will tally up the results, then get them audited, and pay out based on our final year end audit which will be completed around April 15.

This is not an all or nothing plan. If EBITDA is between $38 million and $40 million we will pay out profit sharing on a pro-rated basis.

Digital First Means Taking Risks. Risks That Should Be Rewarded

We all recognize this company and our industry has to change. We need a Digital First culture that is willing to experiment with that change and willing to reward employees for taking those risks. Our profit sharing plan is the first step in rewarding that risk taking.

Until next time, John.

10 thoughts on “If The Company Wins, The Employees Win. We All Win.

  1. That’s great. Incentive has been missing from this industry for some time. But I also like the transparency regarding the numbers. If that transparency trickles down to other levels I bet it will spawn some innovative ideas on exactly how financial goals can be met by giving departments a much needed perspective on the costs and benefits of their actions.

  2. This is fantastic to get something for giving something. I see a major improvement in morale as well as an in crease in revenue here at the Morning Sun. With the direction we are going I see no reason why we shouldn’t hit our goals. Thanks for leading us to great heights. I’m looking forward to being even more inspired so keep it up.

    Ryan K.

  3. This is doable.
    It, frankly, won’t put a lot of money into my pocket, but every nickel counts. The important thing is that we peons who have been holding things together and telling the stories of our communities despite everything now have a chance to be rewarded for doing it well.

  4. A step in the right direction. 2% bonus is better than nothing. And we are turning things around for the company, so it can only get better. Keep inspiring us.
    Idea – If we can’t afford to reward employees with money, benefits work too. Opportunities to earn extra days off, telecommuting rights, or other creative incentives would be welcomed I’m sure.

  5. This comment isn’t connected to bonus plan – but thought I would throw it on John’s blog anyway. Been thinking in our move to digital first that one area where work still needs to be done is the culture of how we do business without our buildings. Specifically, a lot of our meeting schedules are built into early morning hours of the day (the highest traffic time for the web – at least our web) – and I wonder if that’s the case at other JRC properties.

    What I’m getting at is the need for us to change our in-house meeting schedule to better accomodate our online audience.

  6. Jack,

    Hours and schedules are definitely something that needs to change. We only used to have an afternoon meeting at The Middletown Press, which is still doable for us after we changed people’s schedules around.

    With a staff of only 10 people, we pretty much all communicate with each other throughout the day via cell phones and e-mail, and we have found no need to meet more frequently.

    I say fewer meetings leaves more time to get the actual work done, as long as everyone is on the same page about what needs to get done.

    Viktoria

  7. Here’s another thought about the bonus – how about the option to take an extra week of paid vacation instead of an extra week’s pay?

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