Shareholders lucky enough to attend Omnicom's May 25 annual meeting in Wilmington are expected to have great fun as CEO John Wren defends his company's "golden coffin" benefit.
Amalgamated Bank has proposed a resolution that calls for shareholder approval for any future policy that obliges OMC to "make payments, grants or awards following the death of a senior executive in the form of unearned salary or bonuses; accelerated vesting or the continuation in force of unvested equity grants; awards of ungranted equity; perquisites; and other payments or awards in lieu of compensation."
The bank is all for "pay for performance" schemes, but it believes "golden coffin" arrangements that require a company to make significant payments or awards after an executive's death are inconsistent with that approach.
Amalgamated believes breathing executives have ample opportunity and financial resources (Wren's total '09 comp was a cool $7.9M) to arrange for their own estate needs. It sees "no need to saddle shareholders with payments or awards in return for no services."
The bank zeroes in on OMC's "SERCR Plan" for four execs who can receive up to $1.25M annually for 15 years after leaving the company.
The value of Wren's death benefit is about $25M. The bank does not buy OMC's argument that the SERCR Plan is a way to make sure that execs don't compete with OMC upon termination.
Omnicom, which owns PR firms like Ketchum and Porter Novelli, recommends that shareholders vote against the proposal, trotting out old chestnuts like the plan is needed to attract/retain talent and to ensure the execs are committed to the long-term success of the company.
Whether the "golden coffin" remains in place or not, the death benefit is a tad excessive.
For instance, the National Funeral Directors Association pegs the average cost of a funeral at $6,500, while AARP puts burial costs in the $10,000 range.
Thanks to The Clancy Brothers, there is a perfect anthem for OMC's meeting. That Irish folk group, which popularized the song, "Isn't it Grand, Boys?” (available on iTunes) would fit nicely with the proceedings. The song begins:
Look at the coffin with golden handles
Isn't it grand boys to be bloody well dead?
Let's not have a sniffle,
Let's have a bloody good cry
And always remember the longer you live,
The sooner you'll bloody well die…