NEW YORK: A mere seventy-five shareholders attended an Interpublic Group special meeting on Friday – an event that lasted just 45 minutes with attendance and duration implying investors are now satisfied that the long-ailing marketing services giant is back on course.
The agenda, however, featured two controversial motions proposed by stockholders but opposed by the IPG board:
- That there be an annual nonbinding vote on compensation packages for corporate officers.
- That holders of ten percent of outstanding common shares should have the right to call special meetings.
The sponsor of the first proposal, the California Public Employees Retirement System
, argued that "too many times companies pay for failure and overpay for average performance".
"Existing US corporate governance arrangements ... do not provide shareowners with enough mechanisms for providing input to boards on senior executive compensation."
IPG argued that a "say-on-pay" vote is unnecessary because shareholders can already communicate directly with the board on such issues.
Moreover, for a company such as IPG with thousands of stockholders, special meetings called for this purpose would be "very expensive" and "time-consuming."
The proposal duly hit the canvas, KO'd by 63% of the vote, with 33% favoring the motion and 4% abstaining.
Voting on the second motion, however, ran neck-and-neck, forty-eight percent in favour, 51% opposing and 1% abstaining.
But the closeness of the vote left chairman/ceo Michael J Roth in placatory mode. The company, he said, will reassess its current bylaws, which allow for special meetings but require the approval of a majority of the holders of outstanding shares.
Referring to the current majority threshold, Roth conceded: "I think we have an obligation to look at that number." A majority of the IPG board can also propose such meetings.
In addition stockholders re-elected ten board directors for another year and reappointed PricewaterhouseCoopers as outside auditor.
Data sourced from AdWeek (USA); additional content by WARC staff