Union-represented employees of The New York Times and NYTimes.com, units of The New York Times Company (NYSE:NYT), have ratified a new contract. The agreement took almost two years of hard negotiations to reach. It increases compensation while preserving defined pension benefits. It also merges the print and digital employee groups of the newspaper under a single contract due to expire March 30, 2016. Both the New York Times Co. and the Newspaper Guild of New York have duly confirmed the agreement.
A significant motivating factor for guild members was that members of management were seen as lavishly rewarding themselves even while the paper was struggling and laying off staff. This includes an ex CEO who received a severance package worth some $15 to $23 million (depending on the source), even though she resigned after a less-than-stellar tenure as CEO.
Under terms of the contract, all Times Guild members are due to receive a 3% bonus within the next 30 days. Subsequently, beginning at the end of March 2013, they will be given the first of two2% annual raises. With effect from 2014, Guild members will also be entitled to an incentive bonus of up to 2% of their salary. This is in line with the plan that covers upper managers of the company. The existing pension plan will also be changed into something called an adjustable pension plan, or APP. An APP still provides retirees with monthly retirement income for life, but reduces the often volatile defined benefit plan risks for employers. The new contract also strengthens the employees’ medical claims fund and preserves severance pay for current employees.