It is bonus time once again for YellowCrook Scott Klein

April 7, 2010

SuperMedia CEO Pay up Millions while company struggles.

SuperMedia CEO Pay up 30% while company struggles to evolve.

SuperMedia’s Employee Union Members and Non-Union Members want to ask other Yellow Pages Industry Executives if they believe that formerly Idearc Media, the spun off and quickly bankrupt yellow pages publisher of the Verizon Yellow Pages, now called SuperMedia, CEO Scott Klein is fit for his job and whether he has earned his million dollar per year CEO Salary, recent 2 million dollar bonus, recent 9 million dollar longterm stock incentive and 1 million dollar short term stock incentive that he gets to keep once the company is purchased in a deal he struck behind closed doors with Hedge Fund Company Paulson?
SuperMedia purchases Beach Boys for YPA

To SuperMedia Mr. Tom Rogers….  do you have a clue how angry the sales force of the company is? They are scared and angry. Many have been with the company for 20 years and some in the local advertising industry even longer. Since the days of Bell Atlantic and Nynex. You are the CEO of Tivo. You must be paying attention to Google TV, the iPad, Local Search Verticals like Zillow who now offer rental information, and many other great ideas? Why is SuperMedia only selling products that need unmeasurable research from industry sponsored firms like YPA and the Burke study? Do you honestly think the company can afford to pay debt obligations paying sales reps for fraud? Why does Klein continue to manipulate the companies pay plan while planning golden parachute escape with a simple “Change in Control?”

Local Search is not product it is service. Yellow Pages is still used heavily in rural areas and many suburban areas. Do you think the SuperGuarantee subscriptions and impact is sufficient to sustain the company into the future? Why have all of Scott Klein’s internet directors left the company. They do not want to work for him.

If this was not a deal struck in the dark, why have other executives in both local search or yellow pages not follow suit? Why has the man Paulson put on the companies Board of Directors not spoken up? Oh, that is because it is not just the CEO who is raiding the coffers… it happens to be the companies Executives and the board of directors also gets a nice bonus in the process.

I say employees show concern at the next board meeting. I look forward to meeting you there. As a shareholder of the company I am asking other shareholders to voice concerns. If you knew of the corporate frauds of Enron, Bernard Madoff, Acorn, or Countrywide Mortgage ahead of time would you speak up?

Join the conversation at www.YellowCrooks.com

Form 8-K for SUPERMEDIA INC.

5-Apr-2010

Change in Directors or Principal Officers

Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March 30, 2010, the Human Resources Committee of the Board of Directors of SuperMedia Inc. (the “Company”) established the performance objectives and other terms of the Company’s 2010 Short Term Incentive Plan (the “2010 STI Plan”) pursuant to the Company’s 2009 Long Term Incentive Plan. The 2010 STI Plan provides for a payment of incentive compensation to each of the Company’s executive officers and to other eligible employees. These incentive compensation payments are determined by the Company’s achievement of specified performance metrics for 2010, based on: (i) EBITDA (earnings before interest, taxes, depreciation, and amortization), which comprises 70% of the total performance opportunity; and (ii) total published revenue, which comprises 30% of the total performance opportunity.

Each of the performance objectives will have a threshold, target, and maximum level of payment opportunity. Achievement of 100% of the performance metrics will result in award payouts equal to the target awards. At 90% achievement for EBITDA and 92% achievement for total published revenue, which are the minimum thresholds for award payouts, award payouts will be equal to 25% of the target awards. At 120% achievement for EBITDA and 110% achievement for total published revenue, which are the maximums, award payouts will be equal to 200% of the target awards. If achieved, awards will be paid in cash during the first quarter of 2011.

The target awards under the 2010 STI Plan for each of the Company’s named executive officers are set forth below:

Named Executive Officer Target Award

Scott W. Klein – Chief Executive Officer $ 1,000,000

Samuel D. Jones – Executive Vice President, Chief Financial
Officer and Treasurer $ 337,500

Frank P. Gatto – Executive Vice President – Operations $ 280,000

Michael D. Pawlowski – Executive Vice President – Sales $ 262,500

KEY INFORMATION for SUPERMEDIA from HOOVERS.com
DUNS Number 787911986
Doing Business As Verizon Drectories Disposition
Company Type Public – NASDAQ (GM): SPMD
Location Type Headquarters
Year of Founding or Change In Control 2006
KEY NUMBERS
Fiscal Year-End December
Sales (mil.) $2,512.0
1-Year Sales Growth (15.5%)
Net Income $8,257.0
1-Year Net Income Growth 4,412.0%
Total Employees 5,500
1-Year Employee Growth (9.8%)
Employees At This Location 10
KEY PEOPLE
Scott W. Klein CEO (Mr. Let Me Rob My Way Out The Door)
Frank P. Gatto EVP Operations
Samuel D. (Dee) Jones EVP, CFO, and Treasurer (Mr. Lets Not Tell Investors About Raising Credit Limits and Collections)
Dave O. Bethea EVP Sales (Mr. Drunken Fight Guy)
Sandra L. Henjum EVP Transformation and Marketing (Mrs. Heading Jumping Director)
SuperMedia — then called Idearc — was spun off from Verizon Communications in 2006.
HISTORICAL FINANCIALS
Income Statement
Year Revenue ($ mil.) Net Income ($ mil.) Net Profit Margin ($ mil.) Employees
Dec 2009 2,512.00 8,257.00 328.7% 5,500
Dec 2008 2,973.00 183.00 6.2% 6,100
Dec 2007 3,189.00 429.00 13.5% 7,200
Dec 2006 3,221.00 772.00 24.0% 7,400
Dec 2005 3,374.00 1,025.00 30.4% 7,100
Dec 2004 3,600.00 — — 7,400
Dec 2003 3,675.00 895.00 24.4% —
Dec 2002 3,760.00 1,095.00 29.1% —
Dec 2001 3,831.00 1,203.00 31.4% —
Notice how he is using sales fraud and collections to pump up the numbers for the company?
This one was requested to be removed. I later learned via email that it was true. I was contacted by SuperMedia to remove it. Someone lied to me. Said that they are filing a suit. I have emails that state otherwise.

Company information:
SuperMedia
United States

I have read many reviews of SuperMedia/Superpages.com from many angry customers that feel that have been ripped off,
but have not really read any solid explanations of why Idearc/Superpages.com is a rip off.

My name is Lisa, I work for the company in Everett, WA and have done the research to know why. It is my hope that by divulging
the truth someone will be able to use the information to take action against this company. I’ve made a lot
of money selling worthless advertising and this is my attempt to make it right.

First off, it’s important to know that SuperMedia/Superpages.com employs a very specific sales tactic that they
refer to as “Salesology.” This is the very basis of all training and as an employee of the company, if you do
not follow this method, you will be repromanded. Salesology is taught to all employees by Jay Hughes
(www.salesologyonline.com). Utilizing this sales method, most customers don’t even realize that they just purchased
advertising. Here’s how it works:

1) A Business receives a cold call and they are asked if it’s “a bad time.”
2) Rep tells them that “We have people in your area looking for (fill in blank) in your area, are you
currently taking on more work/new customers?”
3) Then we ask how much more work they can handle and how much they make per job. Multiply the amount of work by
the profit per job and that’s their gap. Let’s say an Electrical Contractor averages $500 per job and can take on
10 more of those per month. “So, if I were able to help you close that $5000 gap per month in your business,
would it be fair to ask for $500 on the back-end in return?”
4) Customer says “of course.”
5) Almost no explanation is given on how we are going to get them this promised work. We get GTI
(General telemarketing international) on the phone who records the customer agreeing to a 12-month
contract. They are told we’re doing this “To enter them into our database.” Most people have no idea
what just happened, but this is 100% legally binding. Our only goal is to get them through GTI.

In the initial training, they state we’re to find the gaps in small to medium sized businesses and help
them grow. The funny thing is that no matter what state their business is in, no matter what they sell, how
much they make per sale…it’s all the same. The soloution to every business is a minimum $500/month program to
meet their objectives. They don’t really encourage anyone to sell over a $500/month plan because that
requires a signed contract in lieu of a GTI recording. If you sell less than $500 you’re scoffed at, even if the
business doesn’t need it.

So, what does a business get for $500/month? We are told to tell businesses that we are selling “SuperLeads.”
However, these are nothing more than clicks with a theoretical conversion rate. Their collateral even shows how
this works. So, for $500 worth of SuperLeads a business will get 125 clicks with the minimum of $4/click (some
categories are more). They state that, on average, for every 5 clicks, a customer will actually make a call
to the business. $500 should then relate to 25 calls in a month. Again, this is how we are trained and this
is what the collateral we can send out states.

If the above actually worked, then it wouldn’t be a bad deal. However, most businesses will not get any calls
for their $500 per month. Why? Most (at least 90%) of these clicks aren’t even from SuperPages.com, Google, Yahoo
or anything you’ve ever heard of. They are from obscure partner sites that pull out a single keyword from the
business and get the needed clicks to bill out $500. As an example, let’s say a kitchen contractor installs sinks.
Let’s say someone googles “sink holes.” A few wrong clicks and the contractor is out $4. Again, at least 90%
of these clicks have nothing to do with what a business does. The customer doesn’t have any access to
these click reports, and there are no audits done to ensure it’s actually working at all. The fact is that
most sales are made to oversaturated markets where businesses will not get any return on their
investments. We can sell to the same type of business in the same cities as much as we want and tell everyone
“we have people looking for your services.” In all actuality, Superpgaes.com gets little traffic, and if a business
gets even one call per month for $500 they are doing better than average.

Next, is there click fraud going on? (i.e. the company clicking on it’s own ads to turn a profit.) I’m not 100%
sure here. We used to be able to see the IP addresses that were clicking on the ads, but not any more.
In the past, I did random sample searches to cross reference the IP addresses by location and a large amount
of the IP addresses were not even in the same state as the busnisses. Many of these IP addresses seemed to
track back to where Idearc has physical offices. I have asked many times if I click on someone’s ad from work, will
they be charged a click and have always been told no. I’m not so sure about that.

We also sell postcard mailers. When these came out I was excited to sell something that actually works. We are
told to tell customers they can expect a 0.5% – 2.0% return of them. I’ve heard of a few businesses getting
work from these, but I also know of businesses that have sent out 10, 000 cards (at $5000) with zero return.
The artwork on these is generally poor, as they have the sales reps do the basic design and ad copy for
them with very little training. It’s mostly a joke to see just how bad they come out. Many contractors have
actually gotten in trouble from the State because License numbers have to be on their ads. This also is not
audited.

SuperMedia Complaints – The Truth About SuperMedia

Review all Idearc Media complaints

SuperMedia

Posted: 2009-10-21 by IdearcEmployee
The Truth About SuperMedia
Complaint Rating:  75 % with 4 votes


SuperMedia Ships Jobs to India….. but Scott Klein Got His Bonus!

January 3, 2010

Have you seen the latest headlines about SuperMedia? (on October 5th 2010, SuperMedia CEO Scott Klein resigned, visit YellowCrooks.com’s forums for more info and participate in the discussion.)

Idearc becomes SuperMedia on Jan. 4 2010, meanwhile the Yellow Pages publisher lays off 150 workers in St. Petersburg Florida.


Idearc Media is now SuperMedia

Still $2.75 Billion in debt!



SuperMedia, the company that publishes the Verizon Yellow Pages, is laying off 150 employees in St. Petersburg and shipping the jobs to India.

Idearc / SuperMedia has been trying to emerge from Chapter 11 bankruptcy and sees the outsourcing and layoffs as a cost-cutting move.

About 245 people work for Idearc at its phone directory business at 10200 Dr. Martin Luther King Jr St. N in the Gateway business district of St. Petersburg.

Idearc said it will keep about 90 people in St. Petersburg as it transfers much of its publishing business to Tata Consultancy Services of Mumbai. Idearc plans to hand out severance packages as employees are dismissed in phases through next December.

“There are no surprises. In November, we told the staff in St. Petersburg what was happening,” company spokesperson Andrew Shane said. Idearc is also slashing jobs at phone book publishing operations in Los Alamitos, Calif., and Everett, Wash.

Based in Dallas, Idearc spun off from Verizon in November 2006. The $3 billion company distributes about 127 million phone books and owns Superpages.com.

The phone book business has been shrinking at accelerating speed. Between 2005 and 2007, the number of Yellow Pages printed shrank by 1 billion to 13.4 billion industrywide. In a plan circulated to creditors, Idearc estimated its printed book revenue would be cut by more than half to $1.6 billion between 2004 and 2013.

Idearc/Verizon Yellow Pages

Print revenue

2004: $3.5 billion

2006: $3.0 billion

2008: $2.7 billion

Projected 2013: $1.6 billion*

Online business:

2006: $230 million

2008: $300 million

Projected 2013: $598 million*

Industrywide classified yellow pages printed:

Down 1 billion to 13.4 billion between 2005 and 2007

* Best-case scenario

Source: SEC and court filings

Kinda funny. Internally Idearc is going to list Paulson & Co. as an investor on the site. Idearc forgets that Paulson picked up its share of Idearc for pennies on the dollar. Meanwhile if you noticed what Google was considering purchasing YELP for, it makes me laugh at the markets evaluation of Idearc. Just in-case you are not familiar with the situation, SuperMedia (formerly Idearc, which was formerly Verizon Information Services, which was formerly Bell Atlantic & GTE Yellow Pages) is emerging from a pre-planned bankruptcy.

Scott Klein, like many crony CEOs and Executives, has “lined his own pockets,”  and has “feathered his own nest” by hiring “cronies.”

It was obvious to me that Scott Klein planned bankruptcy the moment he took over Idearc in June of 2008. What folks from the investment community are unaware of is the example of corporate leadership that he has set since he took over reins as the companies CEO. SuperMedia (still working on getting used to saying the new name) operates on bi-weekly pay cycles. Media consultants and earnings are rolled in periods consisting of two weeks called “Pay Periods.” During the first part of 2009, Scott Klein instructed sales managers not to report losses (decreases and cancellations) for Pay Periods 12 and 13 of 2009 to make sure that “upper management” would get the semi-annual quarterly bonuses. SuperMedia sales reps were instructed by management not to report cancellations or decreases in order to make sure that the crony executive team and mid-level managers qualified for the incentive payouts for the period ending pay period 13. I was very disturbed by these actions as an Idearc media consultant. You see, as a yellow pages publisher, it is easy for SuperMedia/Idearc to manipulate the revenue that it reports to investors. All Idearc executives need to do to meet a bonus period is wait to report losses and cancellations. What was even more unique was that these instructions also included direction from executives on reporting the losses on pay period 15 and not dumping them all in pay period 14 which was what you normally saw while they reported earnings to Ivan Seidenburg at Verizon. I assume the company’s Board of Directors was paying close attention to this potential manipulation.  Now let me state that I specifically recalled this happening on a few occasions while at Verizon. The difference with Scott Klein, it was a directive that was company-wide and only a few months after him taking over. Maybe he was just taking advantage of the “quiet period”? Post bankruptcy, Idearc is no longer going to be financially liable for these actions and ramifications to retirees and investor’s 401k’s, pensions, and stock portfolios.

Did Scott Klein purposely default on the companies credit facility debt to enter into bankruptcy? Considering the amount of cash on hand to make the payments….. YES HE DID! That is one of the reasons the company was sued in January and April of 2009.

I am confident that the personal lawsuit against Klein and his executive team will have a dramatic impact on the future of the organization. Just as Mike Leach is no longer the coach of my beloved Texas Tech Red Raiders for his actions, I am sure that Scott Klein will no longer be the leader of SuperMedia in the near future. If Paulson does not take control of the company and put someone more capable (such as Scott Laver) at the helm of SuperMedia, it will sink faster than a torpedoed ship. It is time for SuperMedia to cease crony executive leadership and “YellowCrook” WallStreet stock manipulation. Time to come clean. Time to become more creative. Time to make a commitment to become “SuperMedia” vs just lip-service. Time to put clients and service above sales and earnings. You build it….. they will come! You get the idea!

From 2004 to 2010 Idearc Media will shrunk from 3.5 billion to approx 2.5 billion. From 2010 to 2013 the company is projected to shrink another billion. Considering the company is doing a poor job of competing in a fragmented local search market and the usage of print directories is expected to drop even further (thanks to a wonderful tool such as the mobile web browser) I would expect to see continued outsourcing and cost cutting measures. The unfortunate thing is the company has many of the tools and people it needs to turn around, but with continued mismanagement from executives who do not fully understand what business owners want in a local ad agency, I foresee continued client churn and lackluster results in competing against other internet marketing offers.  Idearc does not seem to understand that you can not put an axe over a clients head to keep or pay for a poor performing internet product. The axe that the threatened local advertisers with to convince them to keep their placement in the print yellow pages does not work online. SuperMedia’s SMLocal product is, in most situations, a 12 month contract (at least the sales reps push you to sign for 12 months, thereby locking you into the companies costly management fees) and that just does not work for an internet offering. Why 12 months for Internet Advertising that can be changed daily, unlike a printed yellow pages advertisement. The company does not offer the client the ability to own the work and campaigns it creates on Google or Yahoo search engines. If they build your website, you never own it. Ownership is possession even after cancellation. In the event the company fails to fulfill the promises delivered to you by sales representatives, you are still required to pay for management fees, since your sales representative was paid a commission. I call these sales “Monopoly Money.” They look great on paper (considering a $2k/month budget for clicks and $800.00 per month management fee is really only $800.00 per month to report to investors) but horrible after they are reported. Maybe they need to just report sales on the monies  it actually collects from advertisers vs just the ink on the contract. Maybe they ought to pay “Media Consultants” for revenue and service to clients vs ink on the contract? Of course we know that when you are a large organization, with a very large resource of collections attorneys and agencies, it helps to work with ambiguous contract terms and conditions.

Once the company addresses core issues with its product offering,  if resolved, (although the company may potentially give up something financially in the short-term,) they will gain long-term in reputation and reduced client churn.The company needs to get web developers and marketers in the field vs sending web development work to India. You will be amazed at the difference a search engine marketer, a local CMS based website developer, and client can produce together vs a “Indian” (are folks from India called Indians?) website developer. After all, website companies that have margins like print yellow pages companies, are doomed for failure. How can they compete with local boutique web marketing firms? How can they produce the same level of service and attention to detail? Do all businesses need this level of service? I don’t believe so. I just don’t understand why a client would choose something else? The reason churn is high in a fragmented local search market: Clients have options! Unlike the print industry, which is dominated by major players, unless Google puts out a simplified internet offering, people will continue to see fragmentation in local search. Kind of like the fragmentation the yellow pages industry has experienced since the decline of print (thanks to the  increased amount of competition in the space.)

You piss off your client = You lose your clients investment for future years. You lose a client, you run out of options to replace them.

Over the years, Idearc executives discovered new options to replace the clients it lost as Verizon by recently changing the company’s credit policies. If folks owed money to Verizon Information Services, after a certain period of time, the balance was forgiven by Idearc. This was, what I consider, blatant attempt at earnings reporting and manipulation. Why would you give someone who has never paid you a dime for advertising a second chance? Oh, I know! You want more monopoly money on the books to get your bonuses! Those contracts that your sales reps bring back in the office, you know… the ones your talk about in meetings and management conference calls, do not mean anything to investors like Paulson & Co. They do not mean anything to clients. They are only important to commissioned sales reps and crony executives and managers looking for fat bonuses…..reminds you of other Yellow Crooks huh? Like the folks at WallStreet Banks and Countrywide Mortgage/Enron Executives?

Let’s see how long this kind of leadership continues?!

Let’s see if someone investigates what happened in Pay Period 13, 14 and 15 of 2009, or if the company’s executive and mid-level managerial leadership gets away with another form of corporate fraud.

Maybe SuperMedia needs to consider firing sales reps who get paid to produce “Executive Bonus Monopoly Money” and begin hiring Search Engine Marketers who can service clients local search marketing needs, you know, since the internet is the wave of the future and all?

Here is to Idearc…. errrrr, I mean SuperMedia and Scott Klein…..

May 2010 be a great year. The lives, careers, and financial freedom of thousands of Media Consultants is on your shoulders. May you make choices and decisions that positively impact your clients, employees, and investors. Let’s end the old tricks of the yellow pages industry.

Happy New Year!

too bad 7 out of 10 people prefer not to get another phone book and the phone book companies don’t care. Meanwhile we must dispose of the waste ourselves. OPT IN vs OPT OUT!

Here is the Scott Klein Lawsuit:

Scott Klein Lawsuit for Securities Fraud SEC