Tribune Co. Chairman and Chief Executive Officer Dennis J. FitzSimons is expected to announce his resignation as early as today, a person close to the company said yesterday. The resignation would be the first departure of a top Tribune executive as the company prepares to go private under the leadership of Chicago businessman Sam Zell.
FitzSimons, 57, a 25-year veteran of Tribune, is in line to collect close to $40 million in severance, depending on the date on which he chooses to depart, according to corporate disclosure statements.
Zell is expected to complete his takeover of Chicago-based Tribune, parent of the Los Angeles Times and The Sun, tomorrow or Friday. The company will then be owned by an employee stock ownership plan created for the purpose, with Zell installed as chairman.
It was unclear when FitzSimons' resignation would become effective or whether other members of his management team were also preparing to announce their departures. A Tribune spokesman declined to comment.
FitzSimons' resignation is not surprising, given the differences in his and Zell's management style. FitzSimons established a highly centralized management structure, and Zell is known for an entrepreneurial approach. Zell is expected to reduce overhead by delegating more operational decisions to individual business units.
The contrast is likely to be felt promptly at Tribune, which also owns the Chicago Tribune, the Chicago Cubs baseball team, and newspapers and television stations in New York, Connecticut, Pennsylvania and Florida. The company is planning to sell the Cubs and associated properties next year.
FitzSimons' potential payout could include severance of $10.7 million, stock options and restricted stock worth $6.9 million and a $4 million "gross-up," an additional payment designed to cover his taxes on the rest of the package. FitzSimons also owned 498,202 Tribune shares as of March 31, according to company documents. Those are worth $16.9 million at the price of $34 a share under the Zell buyout.
FitzSimons' tenure as head of Tribune has been a troubled one. After joining the company in 1982, he rose through the ranks of Tribune's television operations. He became CEO in 2003, three years after Tribune's acquisition of Times Mirror Co., owner of the Los Angeles Times, and was named chairman in 2004.
That eventually put him in direct conflict with the Chandler family, which had controlled the Los Angeles Times for more than a century. By mid-2006, the Chandler heirs were openly disaffected with FitzSimons' management. They contended that he had failed to exploit the promise of the Times Mirror acquisition, which had been predicated on the advertising and news-gathering synergies of owning newspapers and broadcasting in the same cities.