A fortnight ago, Bailey's employer said her remuneration had fallen from £1.06m in 2004 to £991,000 in 2005 after her bonus was cut from £450,000 to £360,000. Last week, Trinity Mirror awarded her a 12.9 per cent increase on her £620,000 basic salary, so repairing the dent in her income. So why does a chief executive who does not earn her full bonus deserve a salary increase?
Since Bailey arrived at Trinity Mirror in February 2003, the apparent dichotomy between her business skills and her lack of newspaper experience has plagued her. She began by promising a "more focused publishing approach" and a "deeper understanding of the role a newspaper plays in readers' lives". Then she announced 550 redundancies.
Among the descriptions offered by the journalist wing of the newspaper business are "a woman for whom the bottom line will always matter more than the headlines", "cost-cutter", "driven", "ruthless", "steely" and "brassy".
When Bailey cancelled last year's Mirror Group Christmas party to save funds, one journalist said: "Sly loves being called the axe woman because she thinks it pleases the City. But she has absolutely no understanding of how newspapers or journalists actually function, nor does she show any sign of caring very much."
Then she cut 300 jobs at Trinity Mirror's national, regional and local titles, and National Union of Journalists chapels throughout the group passed a motion of no confidence in her. The NUJ's general secretary, Jeremy Dear, said: "Sacking is Sly's one and only strategy".
But praise for her commercial acumen has been consistent. The outgoing Trinity Mirror chairman, Sir Victor Blank, once credited her with "a proven track record in building businesses and brands" and "excellent media credentials".
When Daily Mirror circulation fell below two million months after her appointment, analysts hardly questioned his view that Bailey would "bring drive and vigour to our newspapers". They remained equally bullish in 2004 when she sacked Mirror editor Piers Morgan for publishing fake pictures of British soldiers abusing Iraqis.
Bailey appeared to perfect a balancing act in which she sacrificed editorial ambition for commercial progress. She accepted circulation decline as an occupational hazard and accused media commentators of being "obsessed" by a statistic that is a poor indicator of financial health.
After she left her Roman Catholic grammar school in east London, Bailey's first job was as a shop assistant. In 1984 she moved into advertising sales for The Guardian before winning a junior managerial job at The Independent. From there she took the step that gave her career wings when she joined the magazine publishing company IPC. She became a member of its board at 31.
From 1997 to 1999 she was chief executive of IPC's television magazine division, overseeing a record market share for its titles What's on TV, TV Times and TV & Satellite Week. In 1998 she helped mastermind an £860m management buyout of the company from Reed Elsevier. Three years later, as IPC's chief executive, she turned that into £1.2bn by selling the business to AOL Time Warner.
IPC colleagues saw a side of Bailey that Trinity Mirror journalists cannot detect. "To those of us outside the boring old boy network it was obvious she offered a glimmer of glamour and personality to what was a pretty mediocre environment," said James Brown, former editor of lad's mag Loaded. Another colleague from that era calls her "ballsy, inspirational and really dynamic. I found her willing to persuade as well as cajole. She is certainly not a bully and she can be great fun when the team is firing on all cylinders."
This hint that Bailey is capable of warmth is confirmed by those who served with her on the Government's advisory panel on BBC charter renewal.
But it was her ability to satisfy investors that attracted Trinity Mirror. In 2003, Sir Victor Blank knew his group lacked commercial credibility. When Philip Graf, his chief executive, resigned, Sir Victor yearned to replace him with a candidate who could attract City approval. Bailey did that, not least because she was so luminously different from her predecessors.
But now the commercial side is faltering, particularly in the national titles division for which Bailey takes direct responsibility. The three national titles underperformed the rest of the group last year. Their combined revenues fell by 2.9 per cent compared with a 1.7 per cent decline across the group. Each recorded falls in circulation. The bad news was confirmed last week when the latest ABC figures recorded year-on-year declines of 4.1 per cent for the Sunday Mirror and 10.92 per cent for its stablemate The People.
Bailey has no intention of returning the Mirror to the campaigning role it played in the 1960s. But she never pretended she would. In 2003 she said she would make the paper "seriously fun" and was ridiculed for it. Since then she has avoided media interviews, preferring to focus her attention on her company and her shareholders.
One analyst says: "Incessant speculation that Trinity Mirror might actually sell the national titles works wonders for the share price. Sly has a lot of reasons to thank her detractors for that."
Perhaps the real conundrum is that few journalists understand that such commercial motivations make her tick.
BIOGRAPHY
BORN 24 January 1962.
EDUCATION
St Saviour's and St Olave's Grammar School for Girls, Dulwich, south-east London. Briefly attended the Italia Conti theatrical school in 1978, a contemporary of Patsy Kensit.
CAREER
1980: make-up artist for Revlon
1984-87: advertising sales person at The Guardian.
1987-89: advertising manager, The Independent.
1989-99: executive, IPC.
1999: chief executive, IPC Media.
2001: sells IPC to Time Inc.
2003: chief executive, Trinity Mirror.
Married to businessman Peter Bailey, whom she met at an Eric Clapton concert. Supports Tottenham Hotspur.
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