|Thu., Aug. 1, 2013|
|Pay at Top of OMC/Publicis Far From Equal|
|By Jack O'Dwyer|
|The proposed combination of Omnicom and Publicis is being billed as a merger of equals but the pay packages of OMC CEO John Wren and CFO Randy Weisenburger dwarf the pay given to Maurice Levy of Publicis.|
The packages of Wren and Weisenburger indicate they function more like co-CEOs than CEO/CFO.
Wren hauled in $53.3 million in 2012 in pay, bonuses, cashed in stock options and restricted stock while Weisenburger was not far behind with a take of $31.5M in pay, bonuses, options and restricted stock. Total was $84.9M.
Wren’s stock sales in 2012, according to insider trading records, included blocks worth $11.4M, $12.5M and $29.3M while cost of options was $25.4M.
Only Wren and Weisenburger, both accountants by occupation, have access to “personal use of aircraft hours” which totaled $132,841 for Wren in 2012 and $111,590 for Weisenburger.
As of March 15, 2013, Wren owned 1,084,048 shares and Weisenburger, 821,927. No other employee owns close to those amounts.
The only shareholders with larger blocks were Mass. Financial Services with 28.6M shares and BlackRock with 13.4M shares.
Wren’s base pay/bonus was $14.8M while Weisenburger’s was $10.5M.
Wren Paid “Vastly More” than Levy
One of those noting the difference in pay scales of Wren and Levy is Paul Hodgson, who writes about governance for Forbes.
Wren, Hodgson wrote July 30, “is paid vastly more” than Levy. He does not mention the compensation of Weisenburger.
The Publicis CEO receives no fixed pay at all “as his pay is entirely variable, but includes no stock or stock options, pension, deferred compensation, etc.,” says Hodgson.
For 2011, he received a bonus of $3.5M and a payout of deferred bonuses totaling $20.8M requiring that he stay with the company for nine years.
The 2012 bonus was $6.24M. Euros have been converted to dollars at a $1.3 rate.
Levy’s bonus is capped at $6.5M while Wren’s maximum is $24M.
Other compensation to Levy was 68,000 shares of performance restricted stock and most of 78,853 shares from another performance plan, according to Hodgson, which were worth about $8.19M. He also exercised 620,000 stock options for a profit of about $15M.
Will Levy Get Raise? Badinter Controls Publicis
Hodgson wonders if Levy will get a raise since both he and Wren will be co-CEOs and “it seems unlikely that one will be paid less than the other.” He adds that the most Levy could ever earn in one year would be $6.5M.
The deal is being described as a merger of equals but if Levy keeps his pay structure while Wren retains his, “this will certainly not be a merger of equals,” says Hodgson.
Most stories on the historic proposed merger do not mention the pay disparities of Wren/Weisenburger and Levy nor do they mention that control of Publicis is in the hands of Elizabeth Badinter, who inherited it from her father, Marcel Bleustein-Blanchet, who died in 1989.
Badinter was described as the “most influential intellectual” in France “in some quarters” in an 11-page profile in the July 25, 2011 New Yorker.
She is known for her liberal views including championing the right of women to combine careers with raising families.
We wonder what she thinks of OMC where the five highest paid executives are men. The other three are Philip Angelestro, SVP-finance, $2,131,962 in total compensation; Dennis Hewitt, treasurer, $1,170,635, and Michael O’Brien, general counsel, $1,733,696.
Income Gap Is Major Issue
The pay packages of Wren, Weisenburger and Levy will add fuel to the fire of those who say the gap between rich and poor has reached intolerable levels.
President Obama, in a page one story in the Sunday July 28 New York Times, is quoted as saying that widening income inequality is undermining the belief that America is the land of opportunity. Upward mobility has been “eroding over the past 20, 30 years,” he told NYT.
The paper has focused in recent months on soaring CEO pay that has reached $14 million annually for companies with more than $5 billion in sales. It notes that shareholder revolts against this have mostly gone nowhere. An April 7 feature on CEO pay listed the packages of 50 CEOs, only two of them being women.
Stockholders of OMC have protested the pay packages of OMC executives but were only able to garner 19% of the vote at the 2013 annual meeting.
Publicis Owned Freud PR 2005-11
A profile of Matthew Freud, husband of Rupert Murdoch’s daughter Elizabeth, in the Dec. 10, 2012 New Yorker described Freud as heading “what may be the most powerful PR firm in Great Britain.”
The article, by Ken Auletta, says Freud Communications was more than 50% owned by Publicis from 2005 to 2011 when Freud bought it back.
Elizabeth Murdoch was touted as the possible successor to Rupert as head of the News Corp. empire. She is a major business figure herself, having founded the TV production company Shine, with 800 employees, which was sold to News Corp. for $670 million in 2011.
A group of News Corp. shareholders charged “rampant nepotism” in a lawsuit.
The Freud firm is described by Auletta as having nearly 300 employees although PR Week/U.K. reported 188 staffers and $23.8 million U.K. pounds in revenues in 2010.
Freud opened offices in New York and Los Angeles but closed them by 2009. Auletta said his Murdoch connections did not work in the U.S.
Freud is the great grandson of Sigmund Freud and is doubly related to PR figure Edward Bernays. The father of Bernays was Sigmund Freud’s brother-in-law and his mother was Sigmund Freud’s sister.
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