01 April 1998

MEDIA-BUYING specialist CIA Group appears set to cross swords with Martin Sorrell’s WPP group, a 13% shareholder in CIA. The likely bone of contention is a nice little earner dreamed-up by CIA for its top thirty executives and due to be put before shareholders in May. The incentive plan proposes to distribute shares worth over £15m to CIA executives over a five-year period, a move which, corporate governance consultancy Manifest claims, breaks the guidelines laid down by institutional investors - in that it could exceed 10% of CIA’s total equity. CIA founder and chairman Chris Ingram doughtily defended the plan, claiming it is essential to motivate senior staff in a competitive environment, is based on exacting performance targets, and is supported by the group’s leading shareholders. Coincidentally, it also has the useful side-effect of making CIA virtually immune to hostile bids, as its senior directors already hold 40% of group shares [nice one, Chris!]. Sorrell’s only public comment so far is that WPP had not been consulted about the plan. WPP is seen in the ad industry as a potential hostile bidder for CIA.