- The Washington Times - Sunday, November 24, 2013

Not long before he left his job as managing editor at Time magazine for a post at the State Department, Richard Stengel delivered some bad but not unexpected news — the magazine needed to cut staff to close a budget gap.

But the cuts apparently only went so far. They didn’t extend to the more than quarter-million-dollar bonus that Time had doled in 2012 out to Mr. Stengel on top of his $700,000 base salary, records obtained by The Washington Times show.

And while Time Inc. has moved to freeze pay and lay off hundreds of employees this year, Mr. Stengel estimates that he is still in line to receive another bonus worth $100,000 to $250,000, according to a recent government ethics filing.

The $289,000 bonus last year, as well as the anticipated bonus to be paid out early next year, came to light in a disclosure form Mr. Stengel filed following his nomination to undersecretary for public diplomacy and public affairs at the State Department. The White House announced the nomination in September.

Mr. Stengel did not respond to a request for comment through the State Department, nor did Time after being provided a copy of the ethics filing.

A State Department spokeswoman said Friday that Mr. Stengel was aware of the newspaper’s inquiry and would respond if he had anything to say.

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Edward J. Wasserman, dean of the graduate school of journalism at the University of California, Berkeley, said such payouts show how media organizations have taken a lesson on executive compensation from Wall Street.

“It offends our sense of justice,” he said. “Some people are not just escaping, but walking away in terrific shape financially, whereas others get a fairly minimal severance and no safety cushion at all.”

But such deals also are hardly unusual, Mr. Wasserman added.

“It’s become standard practice in the industry,” he said, adding that he feels a bit like “old school moralist wagging my finger” when he considers his reaction to such deals.

Indeed, The Washington Times reported last year on a similar situation of a media executive disclosing a big payout while news staff either feared for their jobs or lost them.

When Maurice Jones left his job as publisher of The Virginian-Pilot to take a position in the Department of Housing and Urban Development, he disclosed more than a quarter-million dollars in bonus compensation around the time the newspaper was cutting dozens of jobs.

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The New York Times reported in January that Mr. Stengel was seeking two researchers, one staff writer and three copy editors to accept severance deals, but added that he would use layoffs if not enough volunteers accepted.

“Time Inc. is undertaking a company-wide restructuring,” Mr. Stengel wrote earlier this year in an internal memo, which was first reported on by The Wall Street Journal. “As part of this cost savings initiative, we need to make some cuts in our editorial staff.”

While Mr. Stengel did not respond to inquiries on this bonus, he provided more detail to a State Department ethics official about the upcoming bonus he expects to receive.

“Consistent with the customary practice for departing executives of Time Magazine, I will receive a pro-rated bonus in early 2014 based on the pre-established terms of the company’s bonus plan for work I completed in 2013,” he wrote in a letter to the State Department’s ethics official.

Based on a memo from Time Inc. CEO Laura Lang earlier this year, it’s not likely that many others are expecting bonuses. She reminded staff that the company needed to “aggressively manage costs” and that it would be forced to eliminate annual merit increases for staff in 2013.

“I know this is difficult news to hear and we did not take this action lightly, but made this decision with the long term health of the company in mind,” she wrote a memo to staff reported on by The Wall Street Journal.

Mr. Stengel’s nomination also marks yet another departure from journalism to the State Department under Secretary John F. Kerry.

Doug Frantz, assistant secretary at the Bureau of Public Affairs, previously worked as national security editor at The Washington Post.

The appointment required him to get a special waiver from President Obama’s ethics rule that bars appointees from participating “in any particular matter” with a former employer for two years from the date of hire.

“Mr. Frantz’ ability to work on matters involving the Washington Post or the Washington Post Company is of particular importance due to his expertise in national security and in journalism and the media industry,” a State Department official wrote in granting a waiver.

The waiver essentially allows Mr. Frantz to talk to Washington Post reporters and editors. Likewise, Glen Johnson, the former Boston Globe online politics editor turned senior adviser to Mr. Kerry, needed a waiver to talk with Globe reporters and editors.

• Jim McElhatton can be reached at jmcelhatton@washingtontimes.com.

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