Cordiant Communications has covertly padded the remuneration schemes of its chief executive and finance director, dangling carrots of up to two and a half times annual salary if the lame duck is taken over.
The moolah will also flow if disposal targets are met – each man receiving an additional year’s salary for achieving that feat; likewise if they manage to engineer a debt for equity swap, or a done deal for acquisition of the entire group.
Should the pair, ceo David Hearn (46) and finance director Andy Boland (33), lose their jobs resulting from changes in control of the sick ad group, another eighteen months salary will ease the pain.
None of which is especially newsworthy – save for one thing. While the relatively standard contractual terminal payments were approved by Cordiant shareholders in March 2002 when the pair parked in their respective hotseats, the other potential payments have never been disclosed.
Cordiant declined to discuss the matter on Monday, but word from within reveals that the two men’s contracts were changed following the loss of the $30 million (€26.47m; £18.77m) Allied Domecq global spirits account [WAMN: 08-May-03].
It is understood that the Takeover Panel advised Cordiant the contracts could be amended if no interested parties were opposed to them. Shareholders – presumably interested parties – were not informed of the changes.
Commented a spokesman for the National Association of Pension Funds: “It is difficult to see how a company could justify paying more than twelve months' salary to any departing executive, whether it is related to a change of control or not.”
Data sourced from: Telegraph.co.uk; additional content by WARC staff