Like a phoenix that knows it's a fucking phoenix and therefore is not to be trifled with, Martha Stewart will not quit. She's over 70 and trying to find a man, she's been continually sued and seemingly does not care and now she's doing what she has (literally, is being forced) to do, which is give up some of her money to make sure the company she founded doesn't go under.
"Consistent with their plan to return Martha Stewart Living Omnimedia, Inc. (the “Company”) to profitability", the Board of Martha Stewart Living and Martha herself "have agreed to certain modifications to the employment agreement between Ms. Stewart and the Company" says the regulatory filing released Wednesday. So until 2017, Stewart has accepted:
- a reduced annual salary of $1.8 million, $200,000 less than she's making now
- "a new expense policy" that will reduce what business expenses she gets reimbursed for
- $1.7 million a year from licensing her name to products, down $300,000
- Martha Stewart Living will get two-thirds of the money Stewart receives from appearing in productions funded outside the company
Basically, Stewart is getting her base pay cut, the money she gets from putting her name on everything cut, the fancy perks of being the founder of a company cut, and the money she gets from projects that Martha Stewart Living doesn't produce cut. This may seem harsh. But it's a necessary step for a company that doesn't know what to do with its founder.
Let's remember that Martha just became chairman of her company again last year. She's refused to see the brand as larger then herself, a problem that affects all sorts of media companies, Playboy for one. Both Stewart and Playboy founder Hugh Hefner are similar in that they're aging heads of once brilliantly profitable companies, companies that are trying to become more than just the face of their founders and actually make money again. This kind of eventual change happens at smaller companies too; just look at the recent ousting of Men's Warehouse founder George Zimmer. When Zimmer was fired, an analyst told BuzzFeed that the company had been deciding whether to remove him as a spokesperson because they were “evaluating his effectiveness, particularly with the millennial consumer."
That sounds a lot like what Martha Stewart Living is trying to figure out. They've tapped into the fact that hipsters love them and are putting money towards bettering their digital operations to keep up with these modern timez. She might be as hip as a woman over 70 can be, with a budding friendship with Andy Cohen and a big Twitter presence, but that also might not be enough. It's a little difficult to see what the long-term prospects of her company are. They laid off a lot of people recently, and the company's recent troubles concerning the lawsuit filed by Macy's over their deal to sell products at J.C. Penney also seemed like it could have been avoided. How much is that costing the company in litigation alone? And all for something that was supposed to make them more money in the short-term.
What Martha has in common with her aging peers is that she thinks – often to her benefit – that she's indestructible. As New York's Benjamin Wallace noted in 2011, she's not. She was making $10 million a year in 2009, and that's not including the fact that "[s]he expenses an extraordinary amount of [her amenities]." It takes a lot to look as good as Martha and she also happens to suffers from the hubris that her way is the best way, a deadly combination that once made her incredibly profitable.
And what this week's announced pay cut going to amount to – $500,000 a year, plus an undetermined amount? That's half a million dollars upfront, and the potential that Stewart's notoriously expensive lifestyle be reduced considerably, but otherwise, it's totally unclear how much funneling more of her payments back into Martha Stewart Living will help the company that, to her, couldn't do anything without Martha.
"I have learned," Stewart told Fortune in 2005, "that I really cannot be destroyed." Of course, that was right after she'd just been in jail. Who knows what a pay cut will do to her. That could lead to real devastation.
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