Hats off (sort of) to Omnicom CEO John Wren for a rare example of corporate noblesse oblige! He recommended that `08 bonuses for top brass be limited to 25 percent of what they pocketed during the previous year.
That means Wren collected non-equity incentive plan compensation last year of $1,750,000 (down from $7M in `07) on top of a $1M salary. According to OMC’s proxy, Wren and other top officers cut their payout so underling executives could receive a piece of the bonus pie.
At the risk of looking a gift horse in the mouth, one could question why OMC’s compensation board granted bonuses in the first place. Former Dover Corp. chairman and 23-year OMC director Gary Roubos, 72, chairs that panel. Roubos’ group threw out traditional yardsticks for gauging bonuses due to the “current challenging economic environment.” It should have gone the extra yard.
OMC’s net income growth last year fell short of the double-digit gains that shareholders are accustomed to. Net advanced 2.5 percent to $1B. OMC shares have been in steady decline since they split two-for-one in June `07 at the $55.45 price. OMC’s stock closed at $27.64 on April 9, and traded as low as $20.19 during the past 52 weeks.
Wren, CFO Randy Weisenburger ($1,325,000), Diversified Agency Services CEO Tom Harrison ($750K), BBDO CEO Andrew Robertson ($750K) and DDB CEO Charles Brymer ($750K) should have taken one for the team by refusing incentive comp.
That would have been a more magnanimous gesture than taking a 25 percent bonus. Rather than paying lower-level execs a bonus, OMC could have diverted that cash to a fund for the thousands of people that it has already or will fire.
That would have been an example of corporate social responsibility at its best.