Interpublic Group, which notched an eyewatering loss of $452 million (€379.54m; £252.79m) in 2003, on Monday released a proxy statement detailing the bonuses rewarding its senior management for this dismal performance.
According to IPG -- parent of McCann WorldGroup and ranked by Advertising Age as the globe's number two marketing services group -- the multimillion handouts were awarded not for bottom-line achievement but for hauling Interpublic out of the fiscal and commercial doo-doo into which it had fallen.
David Bell, IPG's new chairman/ceo, may well need to hire Wells Fargo to transport his modest honorarium: $1 million in basic salary + plus a $1.3 million bonus + $76,000 in other compensation + 200,000 stock options. All this in addition to a $100k signing bonus when he first accepted the hotseat.
Some argue, however, that his rewards are not overly generous, given that Bell is credited with pulling the group back from the brink of bankruptcy. Whether shareholders are of like mind remains to be seen.
Number two in the breadine is Chris Coughlin, chief operating officer and chief financial officer. Coughlin, who joined halfway through the year, enjoyed a partial-year salary of $433,000 plus a $900,000 bonus.
And John J Dooner, whose hand was on the Interpublic tiller before Bell was hired to steer an emergency course, also fared surprisingly well. Demoted to the role of chairman/ceo at McCann WorldGroup, he retained his former salary of $1.25m. Now his personal piggybank will further bulge with a bonus of $750,000 plus $73,000 in "other annual compensation" and 177,000 in stock options.
The group's annual meeting will be held on May 18, at which shareholders will be invited to OK a restructuring of the company incentive compensation plan. This will shift incentive pay emphasis from cash awards and stock options to one based largely on restricted stock grants, especially those linked to future performance.
Data sourced from: AdAge.com; additional content by WARC staff