Shareholders of Gannett, the owner of USA TODAY and more than 260 daily publications, reelected the eight Gannett board members who were on the ballot at the company's annual meeting Monday, according to preliminary vote tallies.
The directors, who were running unopposed for reelection to one-year terms, each received a wide majority of shareholder support during Gannett's first annual shareholder meeting since a merger made it the largest U.S. media company by print circulation and one of the largest by digital audience.
A proposal for Gannett to create an annual report detailing its commitment to news failed to win the support of investors.
Monday's meeting came as the company makes a series of cost-cutting moves following November's combination of the old Gannett and New Media Investment Group, the owner of GateHouse Media. Those actions, including the reduction of overlapping corporate costs, personnel and printing facilities, are expected to reduce the company's annual expenses by $300 million by the end of 2021.
At the same time, the combined company, which took on the Gannett name and headquarters in McLean, Virginia, is dealing with a sudden drop in revenue due to the coronavirus pandemic, which caused many companies to temporarily reduce their advertising spending.
In April, Gannett's stock hit a low of 63 cents as investors assessed the effects of the crisis on the media industry. But the shares have rallied since then amid signs of life in the economy and signals that the company's revenue held up better than expected during the first quarter.
Gannett's stock approximately doubled on Friday to close at $2.81.
Gannett said in May that it was confident in its ability to pay back a $1.8 billion loan from Apollo Global Management that helped finance its merger.
Doug Arthur, a stock analyst at Huber Research Partners who tracks Gannett, said recently in an email that he was "not overly worried" about Gannett's short-term prospects given the company's track record of successfully managing costs.
"They certainly understand the seriousness of the amount of debt vs. the horrific revenue trends right now," Arthur said.
The company's challenge, he said, will be to balance the need for effective cost management with the need to invest in journalism, which, he said, will generate value in the long run.
At Monday's meeting, investors who voted on a non-binding proposal for Gannett to prepare a journalism report rejected the proposal by a margin of about 2-to-1. The NewsGuild, part of the Communications Workers of America (TNG-CWA Local 36047), had pitched the report as an annual "internal audit" focused on staffing, coverage beats, information on print publication days and other material.
"For investors concerned about the fate of journalism, such public monitoring represents a means to understanding how our company creates value," The NewsGuild said in its proposal.
Gannett said in a public filing that its board decided not to make a recommendation on how shareholders should vote on the non-binding proposal.
"The Board wholeheartedly agrees with the sentiments expressed regarding the quality of Gannett’s journalism and the importance of local journalism to our Nation’s civic institutions," Gannett said in a public filing. "At the same time, the Board is concerned that the expense and resources (required) to produce the proposed annual journalism report would not be justified by the expected benefits of such (a) report. The Board also notes that information about the Company’s journalism is made available on the Company’s website."
Other measures up for a vote at the annual meeting included:
• The reelection of eight of nine directors whose terms expire this year: Mayur Gupta, Theodore Janulis, J. Jeffry Louis III, Maria Miller, Michael Reed, Debra Sandler, Kevin Sheehan and Barbara Wall. They were all unopposed and received enough majority support to continue serving for another year. The ninth director, Laurence Tarica, who is serving a three-year term, will be up for reelection next year, at which point each director will be up for reelection annually.
• An advisory vote on executive compensation, known to investors as a "say-on-pay" vote. Investors supported the company's executive pay.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.
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