Daily Research News Online no. 11060 - Arbitron CEO Resigns after Committee 'Misstatement'

Arbitron CEO Resigns after Committee 'Misstatement'

January 12 2010

Michael Skarzynski has resigned as President & CEO of ratings giant Arbitron, after allegedly making a 'misstatement' in his testimony before a US congressional committee hearing last month. He is replaced by Board Director William Kerr.

Arbitron is facing continuing criticism based on claims that its PPM (Portable People Meter) audio tracking device undercounts minority radio listeners.

The system was recently under review at a hearing of the Committee on Oversight and Government Reform, and Chairman Edolphus Towns said earlier that he had received information that Skarzynski 'may have provided false testimony' at the hearing held in December. Towns added that subcommittee staff members are currently reviewing the transcript.

According to reports, at the hearing Skarzynski told the committee that Arbitron was ramping up training for those who use the PPM, and then falsely claimed to have attended a focus group in Maryland which dealt with this training.

Should he have to defend himself against Towns' allegation, Arbitron will offer Skarzynski up to $100,000 to use for 'reasonable' attorney's fees and costs 'in connection with matters that culminated with his resignation'.

According to an SEC filing, Skarzynski will also receive a $750,000 cash payoff from Arbitron as well as his health care costs paid until the end of the year, and the firm will not claim back the $125,000 it paid for his relocation when he took the job last year. However, Skarzynski will not receive stock awards which would have been due to him tomorrow.

During a conference call this afternoon, Kerr said that the firm had acted very quickly once it learned about the House committee's concern regarding Skarzynski's testimony. However, he would not answer one analyst's question about the extent of Skarzynski's severance pay-off, nor why he had been given the option to resign rather than being fired.

Kerr, who is Chairman of the Board of publisher/broadcaster Meredith Corporation, has been a member of the Arbitron Board since 2007, and has served on the Meredith Board since 2006. He joined Meredith's in 1991, and was subsequently the firm's CEO for 11 years.

In addition, he has been a member of the Boards of Directors of The Interpublic Group of Companies since November 2006; Whirlpool Corporation since June 2006; The Principal Financial Group since 2001; and is a member of the Board of Penton Media.

'Bill's experience as a CEO and Chairman of a large public media company coupled with his Board memberships make him uniquely qualified to lead Arbitron,' stated Arbitron Chairman Philip Guarascio. 'Additionally, his service as a member of Arbitron's Board of Directors should provide a fast and effective transition into his new role.'

Separately, while the Media Ratings Council (MRC) continues to deny accreditation to PPM services in 20 local markets, Arbitron today announced that the council had accredited its Average Quarter Hour (AQH) radio ratings data in the Minneapolis-St. Paul market.

Arbitron share price fell 10.1% to $24 earlier.

Web site: www.arbitron.com .