The Washington Post Co.'s longtime CEO turned down a $1.2 million bonus last year to keep his compensation package unchanged from the previous year.
Donald Graham could have collected the seven-figure payment as part of a long-term incentive plan covering 2007 through 2010, according to regulatory documents filed Wednesday.
The sacrifice left Graham's 2010 pay package at $412,740, the same as in 2009, according to an Associated Press calculation of figures disclosed in the filing. The compensation mostly consisted of the same $400,000 salary he has received since he became CEO in 1991. The rest represented the company's contribution to his 401 (k) retirement plan.
Unlike most CEOs, Graham, 65, doesn't get annual grants of stock options or other similar incentives because he is the company's largest individual shareholder. The Post Co.'s board of directors believes Graham is underpaid, according to the filing.
The company didn't explain why Graham didn't want the $1.2 million bonus. He was eligible for a payment under an arrangement in which he gets an incentive award every other year.
Graham's decision to forgo last year's bonus comes amid challenges facing the Post Co., which owns the largest newspaper in the nation's capital and owns the Kaplan education service.
The Washington Post newspaper's revenue has been sliding for several years, forcing staff cutbacks and other cost-cutting measures. Like other major newspapers, the Post has been hard hit by an advertising shift from print publications to free and cheaper alternatives on the Internet. Advertising has been newspapers' main source of income.
The newspaper slump has turned the Kaplan school and testing service into the Post Co.'s biggest moneymaker. But Kaplan's growth prospects have been clouded by intensifying government scrutiny of how for-profit education services recruit their students. The pressure prompted Kaplan to give higher-education students a trial period before they commit to paying, a change that will likely cut into its revenue.
Kaplan's revenue last year climbed 10 percent to $2.9 billon. The Post Co.'s total revenue last year rose 8 percent to $4.7 billion while its earnings tripled to $277 million, partly because of different accounting charges that were absorbed in 2010 and 2009.
The Associated Press formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.