Stewart sheds director, chief creative officer titles

By Theresa Howard
USA Today

NEW YORK — Martha Stewart's once-iron-fisted rule of Martha Stewart Living Omnimedia continued to loosen yesterday as she stepped down as director.

She also gave up the chief creative officer title she took after resigning earlier as chairman and CEO. Stewart, convicted March 5 of obstruction of justice, will now have the title founding editorial director.

The new job, which reports to CEO Sharon Patrick, further distances Stewart from the company she founded. However, it leaves Stewart, who holds more than 60 percent of shares and more than 90 percent of voting control, with a hand in creative decisions.

Patrick said in a statement that the company and consumers will "benefit most if we are able to continue to take advantage of Martha's creative inspiration and capitalize on her prodigious skills."

Stewart will supervise staff on a project-by-project basis, said spokeswoman Elizabeth Estroff.

Stewart's compensation — $900,000 salary and about $1.3 million in bonus and other compensation in 2002, the latest available — remain unchanged through October, when her contract expires.

But Omnimedia will cut half of the seven months left on a $2.5 million annual contract for use of Stewart's properties for photos and filming, Estroff said.

Omnimedia also said Stewart will have "input" in naming her board replacement.

Corporate governance expert Dale Schreiber wondered whether a replacement was needed. "That's a matter over which her franchise as a controlling shareholder has some influence," he said.

Schreiber added that a "truly independent board would ask her not to vote her shares" and warns that too much Stewart influence even as founding editorial director could backfire.

"If she tries to dominate the corporation ... there will be some problems," Schreiber said. "The board has to have a very concerted basis for needing her and has to be able to demonstrate that objectively."

The future of Stewart's name on MSLO products is uncertain. It has filed a magazine trademark application for the title Everyday Living, leading to speculation about plans to rename its signature Martha Stewart Living magazine.

Magazine consultant Samir Husni said the "aging" magazine needs a revamp but not a new name. "You would be killing the message and the messenger at the same time," he said.