ON DECK: The public offering documents for Time Inc. didn’t provide a valuation for the publisher or a timing of its spin-off from Time Warner, but it did reveal things much more interesting: salaries of key executives and the division’s financial information.
Time Warner filed its initial public offering documents for the widely anticipated spin-off of its publishing division Time Inc. after the stock market closed Friday.
This story first appeared in the November 25, 2013 issue of WWD. Subscribe Today.
For the year ended Dec. 31, 2012, the publishing business saw its net income fall 28.5 percent to $263 million from year-ago income of $368 million. Operating income fell 25.4 percent to $420 million from $563 million. Revenues slid 6.6 percent to $3.44 billion from $3.68 billion. The filing said that last year Time Inc. held $36 million in long-term debt.
While the struggles of print aren’t new, the filing did reveal that People magazine accounted for almost 20 percent of Time Inc.’s revenues.
As for those salaries, former Time Inc. chief executive officer Laura Lang, who lasted on the job for nearly two years, had total compensation for fiscal 2012 of $7.6 million, which included a base salary of $961,539. She accrued $2.9 million in stock and options and $659,362 in other compensation — the bulk of that sum relating to “relocation-related expenses.”
Lang will continue to receive her base salary, as well as an annual bonus of $1.8 million, until Nov. 2, 2015.
Joe Ripp, Lang’s successor, who officially took the reins in September, has an employment agreement that includes an annual base salary of $1 million, and a discretionary annual cash bonus with a target of $1.5 million, among other things. Ripp is also guaranteed a minimum of $750,000 for his 2013 cash bonus.
Ripp’s hire was just one of many moves at the company. In September, the company acquired American Express Co.’s publishing unit, which included Travel & Leisure, Food & Wine and Departures. It also reorganized its editorial structure, which has managing editors reporting to group presidents of Time Inc.’s magazine divisions. The reorganization caused editor in chief Martha Nelson to leave. The company brought back Norman Pearlstine, who departed Bloomberg LP, as chief content officer, a new yet somewhat amorphous role. Neither Pearlstine’s nor Nelson’s salaries were revealed in the filing.
Time Warner said the spin-off of Time Inc. would create “strategic clarity and flexibility,” “focused management” and “management incentives” for the cable company and the publishing division, which includes more than 20 titles.
The move will allow Time Warner to focus instead on its cable properties, such as its lucrative HBO business, and disentangle itself from Time Inc., which has been its worst-performing division.
According to media reports, analysts put Time Inc.’s enterprise value as a public company at between $2.7 billion and $4.9 billion.