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.