During the Christmas break, the compensation committee of board elves shelled out hefty grants of options, warming the hearts of executives such as CEO John Wren, CFO Randy Weisenburger and president of Diversified Agency Services Tom Harrison. [A big shout-out goes to my friends at DAS units Fleishman-Hillard, Porter Novelli, Brodeur, Clark & Weinstock, Cone, Gavin Anderson and Ketchum.]Options to purchase one million shares of OMC at $25.48 went into Wren’s Christmas stocking on Dec. 29, while Weisenburger and Harrison got 500K shares each. Thirty percent of those options are exercisable on Dec. 29 of this year. Another 30 percent can be exercised on the second anniversary of the grant. The rest become due year-end 2011.
That’s a pretty sweet deal for the trio. Wren, for instance, held the right to purchase 500K shares at $32.75 on Feb. 25 and 2.5M shares on Dec. 6 at $45.61. A whopping 4M options could be changed into stock on April 4, 2011, at $39.75.
Weisenburger owned options on 150K shares at $32.75 on Feb. 25 and 400K share at $39.16 on March 8, 2010. In 2011, Weisenburger owned options to buy 800K shares at $43.58 on Feb. 2 and 1.5M shares at $31.18 on Oct. 2.
The advertising depression makes those targets more than iffy as OMC is currently trading at $27. The improved options take a load off the financial minds of OMC's brass. Though other shareholders fondly recall that nine years ago today they could have gotten almost $50 for each share?
Hats off to Omincom's board members for taking care of management! A big gold star goes to former Dover Corp. CEO Gary Roubos, 71, who chairs the compensation committee of the board. Silver stars are fixed to the lapels of Alan Batkin, vice chairman of Eton Park Capital; Leonard Coleman, former advisor to Major League Baseball; Susan Dennison, partner of Cook Associates; Michael Henning, ex-deputy chairman of Ernst & Young, and Linda Johnson Rice, CEO of Johnson Publishing.
A wise guy may crack that those board members aren’t exactly General Electric material. Nuts, I say. Coleman, ex-National League Baseball prexy, serves on the board of H.J. Heinz, and Rice, CEO of America’s largest African-American publishing company (an outfit founded by her father), sits on the Kimberly-Clark board. Heinz and K-C are not corporate chump change.
Now only if these directors can figure how to help the 3,000 people OMC plans to or already has fired. That cutback is sure to boost the ad/PR conglom’s profit margin, and might even give its beleaguered stock price a rise, making those management options a very good deal indeed.