Edition, May 9, 2001, Page 1
OF DIMES LOOKS FOR FIRM
The March of Dimes Birth Defects Foundation wants to hire
a firm to handle a three-year "national mission"
communications campaign, according to Rick Bainbridge, its
director of strategic marketing.
He would not say how much the Foundation is willing to pay
for an integrated program that includes PR, advertising,
social marketing and community outreach.
The campaign, targeted at women of child-bearing age, will
teach them what they can do to prevent premature births.
There also will be an "emotional" element to connect
people with the "March of Dimes brand," said Bainbridge.
"Letters of intent" must get to Bainbridge by
May 11. He is stationed at the Foundation's headquarters
in White Plains, N.Y. (914/428-7100). A decision will be
made by July 31.
SET TO AWARD $20M AD/PR PACT
The California Dept. of Health Services is ready to award
a three-year $20 million ad/PR contract to educate people
about cancer prevention and nutrition, according to Katie
Hennelly, marketing manager at the unit.
Sacramento shops Ogilvy PR; Runyon, Saltzman & Einhorn
and Newport Beach-based Lawrence Mayo & Ponder are in
the running for the business.
Hennelly said the review process began at the beginning
of this year, and "took a little longer" than
There will be a focus on childhood obesity, which Hennelly
called a growing problem in California.
Besides a proper diet, the state wants parents to know the
role exercise plays in keeping children fit.
Low-income and Hispanic Californians are key targets of
GCI Group is working with Jerry Giaquinta, the former
PR head of Sony Entertainment, to help navigate the convergence
of technology, content and consumer products. GCI will get
access to wisdom of high-tech PR guru Regis McKenna and
adman Jay Chiat. They serve as advisors to Giaquinta's firm...
Ad spending will fall 1.5% this year, according to
Jack Myers, chief economist for Myers Reports. He
had projected in December a 4.9% gain for 2001. Myers is
looking for a 0.2% rise next year, down from his initial
H&K DIALS UP MARCONI
Hill and Knowlton picked up the worldwide PR account for
Marconi, the London-based telecommunications giant with
55,000 employees, after a pitch against top-tiered firms
that began late last year. Brodeur Worldwide was the finalist
for the account, which could be worth $10 million.
Paul Taaffe, H&K's president will, spearhead the global
account from New York.
He told this NL that H&K will work for Marconi in about
20 countries. Sally Costerton, head of H&K's U.K technology
unit, will oversee things in Marconi's home market.
H&K's mission is to drive awareness of Marconi's brand
into boardrooms throughout the world.
Taaffe said H&K will position Marconi as a worthy competitor
to Lucent and Nortel.
SEEKS FRIENDLY U.S. TIES
is looking to "establish friendly and constructive
relations" with the U.S., and is using consultant Jim
Denton, Alexandria, Va., to do so.
is receiving $120K from the "Serbian diaspora community,"
according to the one-year contract filed with the Justice
is the former executive director of Freedom House, which
is non-profit democracy building group.
worked with Serbian political leaders who opposed Slobodan
Milosevic, and traveled to Serbia many times," he told
political leaders include Zoran Djindjic, the country's
current Prime Minister.
wrote a letter of introduction for Denton that authorizes
him to "conduct informal consultations with officials
in the Bush Administration and the U.S. Congress."
goal is to "enhance Serbia's image as forward looking,
stable, investor-friendly country - rich in history, culture
and the arts."
MACKEY JOINS B-M
Mackey, 43, has joined Burson-Marsteller as chairperson
of its U.S. corporate/financial practice.
heads a staff of more than 100, and reports to Chet Burchett,
who is B-M USA CEO.
joined B-M in 1998 from Edelman PR Worldwide, where he was
an EVP/deputy manager. Mackey has been an Edelman EVP/GM,
corporate affairs and global practice leader, reputation
Edition, May 9, 2001, Page 2
DIES AT 66
Bronx-born John Scanlon, who was known for his bare-knuckle
approach to PR, died of an apparent heart attack on May
4. He was 66.
Scanlon, a former Christian Brother known as Brother Charles
Kevin, made his mark on PR by defending "60 Minutes"
against libel charges lodged by General William Westmoreland.
His most "controversial" client, according to
The New York Times, was Brown & Williamson, for
which he compiled a 500-page dossier besmirching the reputation
of a B&W "whistleblower."
That staffer, Jeff Wigand, contended that B&W was involved
in a conspiracy to make cigarettes more addictive.
Scanlon gave the dossier to The Wall Street Journal,
which reported that many of the allegations were untrue.
Takes on Controversy
Scanlon, who had worked for Edelman PR Worldwide and was
affiliated with WestHill Media Strategies at the time of
his death, had a high-profile client list until the end.
He recently helped Jesse Jackson deal with the "love
Scanlon told former Senator Bob Kerrey how to handle allegations
that he was involved in a raid against civilians during
the Vietnam War.
Another client was Alfred Taubman, the former Sotheby's
chairman who was indicted last week on federal price-fixing
Of his penchant for handling tough clients, Scanlon told
New York magazine in 1997, "Sometimes you sup
with long spoons."
AIDE SETTLES WITH DRUDGE
Sidney Blumenthal, a former Clinton aide, has reached an
out-of-court settlement with cyberreporter Matt Drudge.
Instead of winning any payment, Blumenthal, a former journalist
with Time magazine, has agreed to pay Drudge's lawyer $2,500.
Blumenthal said the payment is to ensure the litigation
and the publicity it brought Drudge will end. Another explanation
given was the payment was to reimburse Drudge's lawyer for
travel expenses to come to Washington, D.C.
Blumenthal had filed a $30 million libel suit in 1997 against
Drudge for his report on his website, "The Drudge Report,"
that falsely suggested Blumenthal had beaten his wife, Jacqueline,
who was also a Clinton White House aide.
Drudge, who later retracted the report and apologized, said
the publicity about Blumenthal's suit made his website successful.
Drudge said he went "from rags to absolute riches-and
I got to keep them." Blumenthal said the suit had cost
him tens of thousands of dollars in legal fees.
Drudge's legal expenses were paid for by a libertarian-oriented
group, Individual Rights Foundation.
'JUNK' FAXES MAY COST HOOTERS $11.9 M
The Atlanta-based Hooters of America restaurant chain has
appealed a Superior Court judge's order to pay $11.9 million
for sending unwanted ads by fax.
A jury ruled March 21 that Hooters had "willfully or
knowingly" sent six faxes to many prospective customers,
which featured lunch coupons.
The Telephone Consumer Protection Act of 1991 requires advertisers
to get prior consent before transmitting or pay a minimum
of $500 per violation.
The faxes were sent by the now-defunct Value-Fax of Augusta
on behalf of the local Hooters in 1995.
If the Georgia Court of Appeals does not rescind the order,
it would give each member in a 1,321-person class action
lawsuit slightly more than $6,000.
GRISWOLD SERVICE SET FOR MAY 17
A service for Denny Griswold, founder of PR News
in 1944, will take place Thursday, May 17 at 5 p.m. at the
Penn Club, 30 W. 44th St., New York.
Elinor Guggenheimer, founder of the New York Women's Agenda
of 120 women's groups and an advocate for rights of women
and senior citizens, has joined Harold Burson as co-chair
of the Denny Griswold Memorial Committee.
Guggenheimer, a longtime friend of Griswold, who died Feb.
8, said she was alarmed by reports that Griswold was largely
isolated from the outside world in recent years. "Seniors
do not surrender their rights as citizens when they enter
healthcare facilities and it is the responsibility of all
of us to see that their rights to receive visitors, mail
and phone calls are protected," she said.
Guggenheimer herself had no contact with Griswold after
the latter entered the Wilton Meadows nursing home in Wilton,
Conn., Aug. 7, 1995.
Members of Women Executives in PR said they couldn't get
through to Griswold while at WM.
REPORTER DENIES IMPROPER BENEFITS
Christy, columnist for The Hollywood Reporter, has
denied charges by fellow staffer David Robb that he improperly
became entitled to Screen Actors Guild health and pension
benefits by performing bit parts in movies.
Robb resigned from the trade paper after it refused to print
accusations that Christy, who writes "The Great Life"
society column, took favors from producers. Also resigning
from the Reporter in support of Robb were editor Anita Busch
and executive film editor Beth Laski. Robb's story ran May
2 on the Inside.com website. Christy denied the charges
in a story in the May 3 Los Angeles Times.
Kara Ingraham, co-owner with Paul Holmes of the defunct
Editorial Media & Marketing Int'l, has been awarded
the right to appoint a receiver of the assets of EMMI. She
had told N.Y. Supreme Court that the assets were eroding
with time. An auction of the assets, including the Creativity
in PR Awards, is now taking place on the PRCentral.com website.
Bids are to be e-mailed and the assets will go to the highest
Edition, May 9, 2001, Page 3
RIDER'S ED GETS NEW TV SHOW
A new cable TV show, called "Inside Powersports,"
will be launched in June on the Speedvision network.
The program will focus on the motorcycling, snowmobile,
ATV and personal watercraft industries.
Genevieve Schmitt, who is editor of Woman Rider,
a quarterly motorcycle magazine aimed at women, will host
the new program. For the last four years Schmitt has been
on-air correspondent for "Bike Week," a weekly
"Motorcycling is just a vehicle for bringing stories
to the forefront," Schmitt said.
"The topic could be an undiscovered travel destination,
a trend encompassing things like fashion or restaurants,
a celebrity or interesting person who rides, and the common
denominator is motorcycling."
Schmitt has the luxury of living wherever she wants because
most of her work is done on the road. She usually handles
the editorial side of the magazine from her home in Colorado
Springs. The layout is done in Minneapolis, the publisher's
OFFERS PRODUCT PLACEMENT DEAL
ABC has extended an open invitation to companies to actively
help create the scenarios for product placements on its
new reality show, "The Runner," which airs this
In the May 7 Newsweek, senior writter Johnnie Roberts
reports ABC is hoping the new series will "transform
the economics of the TV business."
Roberts said the ABC sales force is already trying to line
up companies willing to pay for the privilege of being the
runner's mobile phone, laptop computer, credit card or burger
Roberts said ABC is "offering far more than just a
beauty shot of a soft drink can."
In one mission, for instance, the runner may be instructed
to go to a sponsor's clothing store, such as the Gap, without
being detected. A different mission would call for use of
a different sponsor's product and therefore a different
So far ABC has landed one major sponsor. Pepsi will be "The
Runner's" exclusive soft drink.
NEWS SERVICE OPENS N.Y. BUREAU
The London-based Press Assn. has assigned a reporter to
cover celebrity and entertainment news in the U.S.
Hugh Dougherty, who for the past two years has been covering
Scottish politics for the PA, is based in the new bureau
at 303 E. 5th st. in New York.
The PA, which has been around for centuries, is the equivalent
to The Associated Press in the U.S.
The Press Assn. provides coverage to most of the U.K.'s
top dailies and broadcasters. It also sends news to about
15 newspapers in Ireland.
is especially interested in doing pieces about film and
stage actors, who are known in the British Isles, or have
a connection of some kind.
He said publicists can phone him (212/473-3827) or e-mail
him ([email protected])
to pitch stories, or to invite him to events.
Rothenberg, 45, was named chief marketing officer of Booz-Allen
& Hamilton. He will continue as editor-in-chief of strategy
+ business magazine.
CONTENT TO GO QUARTERLY
Brill's Content will switch from 10 times a year
to a quarterly in the fall, and Steven Brill, chairman/CEO,
has asked eight to 12 people to resign.
BC, which covers the media business, will remain separate
from Inside magazine, which Brill acquired as part
of an agreement to buy Powerful Media, which also operates
BC had a paid circulation of about 290,000, which was short
of the 600,000 that had been expected when the magazine
was started four years ago.
Philip O'Brien, managing editor of WNBC-TV (Ch. 4),
in New York, said his newsroom does not like to get "gimmicks"
from publicists who pitch the station stories.
He said his newsroom recently got two releases that looked
like ransom notes. The mailing, which also went to other
news outlets, was composed of letters cut and glued from
magazines saying, "Stick your head in a blender."
The releases had no contact information or address.
After the second release arrived, two staffers became frightened,
so O'Brien called the postal police to see if they could
locate the sender of the releases.
Using the meter number on the envelope stamp, the police
were able to trace the releases to Four Corners Communications,
a New York-based PR firm that is handling publicity for
Blender, a new music-oriented magazine that made its debut
spokeswoman for the firm said the releases had "caused
quite a bit of interest," including a mention on the
"Page Six" gossip page of The New York Post.
The New York Times will publish a special news
section "From Newspaper Age to Information Age"
on Sept. 20 to mark its 150th anniversary. The report will
span 150 years of landmark moments in world affairs, science
and technology, fashion and the arts. The New York-Daily
Times, as it was known, was founded in 1851 by Henry
Raymond and George Jones as a four-page paper.
Localbusiness.com, a website based in Ft. Lauderdale,
has closed. The website was started as dbusiness.com in
1997 by Edwin Warfield IV.
news continued on next page)
Edition, May 9, 2001, Page 4
ARE MOST TRUSTED MEDIUM
Consumers who get news and information from a multitude
of sources see newspapers as more credible than TV, radio,
magazines or the Internet, according to findings from a
new national readership study for the Newspaper Assn. of
More respondents also cited newspapers as their primary
source for local news, local entertainment information,
personal finance and business news.
The findings are based on a national representa-tive sample
of 4,003 adults.
The 102-page report, "Leveraging Newspaper Assets,"
can be downloaded from www.naa.org/marketscope/index.html.
Sunday circulation continues to be a problem for the newspaper
industry, as most major metropolitan dailies reported declining
Sunday figures in the six-month period ending March 31,
according to figures released by the Audit Bureau of Circulations.
The top three largest daily papers-USA Today, The Wall
Street Journal and The New York Times, each with national
distribution-reported slight gains, less than 1%, over the
year-earlier period. But, overall newspaper circulation
lost ground daily and on Sunday.
An analysis by the NAA shows overall daily circulation at
the nation's roughly 1,500 dailies fell just under 1% while
Sunday circulation fell 1.7%.
John Morton, a newspaper analyst, believes lifestyle may
have affected Sunday newspapers. It's become a huge shopping
day and people have more things to do on Sunday than they
used to, he said.
TRAINER REMEMBERS EARNHARDT
Media trainer Virgil Scudder said Dale Earnhardt, the deceased
race car driver, was one of the most interesting sports
people he has worked with during 23 years in the media training
"Even in the company of such luminaries as Bill Russell,
Magic Johnson, Nick Buoniconti, Joe Torre, and Al Unser
Jr., Dale Earnhardt was unique," said Scudder, who
heads Virgil Scudder & Assocs., New York.
"For one thing, I have never met anyone as fearful
and distrustful of the news media as Dale was when we sat
down for media training in the late 1980s," said Scudder.
"This aggressive-many would say bullying- and rambunctious
man was hurt by many of the things being said and written
about him. The fact that the reporters' criticisms were
based on documented facts, such as his tendency to knock
rival cars off the track, did nothing to diminish his sense
of being treated unfairly," Scudder said.
"Over the years, this feeling seemed to lessen somewhat,
and he learned to use the media to his advantage,"
said Scudder. "But, for better or worse, Dale always
did it `his way.'"
ARE SHUFFLED BY L.A. TIMES
The Los Angeles Times has changed the appearance
and frequency of some columns.
"City Angles," a new column, will appear more
frequently in the "Southern California Living"
section-four days a week, Tuesday through Friday. It has
been running on Sundays, Tuesdays and Fridays.
The celebrity-oriented column, which is written by Ann O'Neill
and supported by reporters Gina Ricalo and Louis Roug, covers
fashion, design, and culture in California and beyond.
"Sandy Banks" column now runs Tuesdays and Sundays;
Al Martinez runs Mondays and Thursdays; the "Guy Chronicles"
by Chris Erskine appears Wednesdays; "Fashion Police"
by Jeannine Stein runs Fridays; "Drive Time" by
Mary McNamara appears Wednesdays, and "Birds &
Bees" by Kathleen Kelleher runs Mondays.
PROMOTES LIDSKY AND GAJILAN
David Lidsky and Arlyn Gajilan were promoted to senior editor
and editor, respectively, at FSB: Fortune.
Lidsky, who was technology editor, will continue to oversee
the "Tech" section of the magazine and will also
contribute feature stories related to small business technology
trends, companies and personalities. He will continue to
write his monthly column, "Tech Skeptic."
Gajilan, who was senior writer, will continue to edit the
"Livewire" section and will also begin to edit
features in addition to writing features.
She will also continue to write her column for fsb.com entitled
"The Conspicuous Consumer."
Charles Peters, who founded The Washington Monthly
33 years ago, has retired as editor-in-chief. He is succeeded
by Paul Glastris, who wrote more than 200 speeches for former
President Clinton on subjects ranging from education to
Laurie Buckle, 44, who is an editor of Bon Appetit
Books, takes over as managing editor of Bon Appetit
magazine on June 1.
Elaine Sciolino, a reporter in the Washington, D.C.,
bureau of The New York Times, was named the winner
of the 2001 New York Public Library Helen Bernstein Book
Award for Excellence in Journalism.
The $15,000 prize was awarded for her book Persian Mirrors:
The Elusive Face of Iran (Simon & Schuster), about
the contradictions of the Iranian revolution and the new
order it created.
Sheila MacVicar, previously a correspondent for ABC
News' "World News Tonight with Peter Jennings,"
is joining CNN as an international correspondent based in
CNN's London bureau.
Edition, May 9, 2001, Page 7
SEC ATTACK WALL STREET
May 14 Fortune magazine has a virtually stem to stern
attack on Wall Street practices, claiming too many insiders
get rich while companies in need of capital and the public
get the short end of the stick.
The story is built around Morgan Stanley analyst Mary Meeker,
who is said to typify the conflict of interest that is rampant
on the Street.
"She may be the greatest deal maker around," said
an opening headline. "The problem is, she is supposed
to be an analyst." The article portrays her as acting
like an investment banker rather than a cold-eyed analyzer
of corporate investments. Her salary in 1999 was estimated
at $15 million.
An accompanying article claims investment bankers are charging
"exorbitant" fees for raising money and are walking
off with the lion's share of any profits. "Betrayal
on Wall Street," with numerous negative comments by
financier Felix Rohatyn, is the headline on the article.
Three-quarters of the 779 IPOs of 1999-2000 are below their
According to Fortune, many IPOs were priced too low.
When their prices shot up in a few days, the bankers, holding
major blocks at nominal prices, unloaded these shares for
huge profits. The money went to the bankers and not the
start-up companies, charges the article. It asks why bankers
should get a non-negotiable 7% of a deal when lawyers get
paid by the hour.
SEC, Washington Post, Rap "Pro Forma"
The "pro forma" reporting of earnings, used by
Interpublic and other companies, has come under attack.
NIRI and Financial Executives International just put out
"guidelines" on the subject (5/2/NL).
Acting SEC Chairman Laura Unger is "troubled"
by the increasing use of pro forma, calling it a "tool
companies have invented to disseminate an idealized version
of their performance...you really don't know what you're
getting except it's what the company wants you to know."
SEC chief accountant Lynn Turner said he is concerned about
earnings releases that "seem to spin straw into gold"
and that "convey an incomplete or inaccurate picture."
He calls them "EBS" releases, meaning, "Everything
but the Bad Stuff."
Washington Post writer Fred Barbash, citing a number
of such releases, said companies are "trying desperately
to make losing look like winning." He called it "compassionate
Barbash, commenting on the NIRI/FEI guidelines, said, "They
could be better...whenever hypothetical numbers appear at
the top of a release, the real numbers should be at the
top as well." The first few lines tend to lead the
stories rushed to the public by wire services and picked
up on the Internet, he said.
PRSA'S AUDITED LOSS FOR 2000: $678,893
PRSA lost $678,893 on revenues of $8,805,108 in 2000 after
a loss of $426,288 in 1999.
Travel expenses soared 23% to a record $717,478 because
of increased travel by staffers and members for chapter,
ethics, international development, accreditation and strategic
Chapter travel spending ballooned from $8,598 in 1999 to
$121,105 in 2000, helped by a meeting of 100+ chapter presidents
in New York last June. Costs will be held down for a similar
meeting this June, said Catherine Bolton, PRSA president.
While $12,291 was spent on travel for planning in 1999,
this grew to $24,111 in 2000. "Global leadership"
travel spending went from $188 in 1999 to $12,035 in 2000;
APR travel from $19,389 to $30,212; awards travel from $6,884
to $17,001, and general leadership travel from $138,654
to $143,061. PR Student Society of America spent $63,094
in travel in 1999 vs. $63,299 in 2000.
Travel by staffers rose from $69,392 to $76,219.
Tactics and Strategist took in $802,047 in
ads and subscriptions but cost $1,368,549 for a loss of
$566,502. APR took in $150,074 but cost $591,541 for a loss
"Other publications" (including directories of
PR firms and suppliers), netted $55,813 on gross of $216,595
and professional development netted $77,538 on $429,103.
Other programs lost money.
The national conference grossed $1,122,545 but cost $1,318,367
for a loss of $195,822.
The Counselors Academy had $497,029 in income but $538,695
in expenses, and awards took in $457,295 but had $529,293
PRSSA continued to cost PRSA about $200K a year as costs
climbed 21.7% to $729,545 and income totaled $528,887. Only
a small fraction of PRSSA members join PRSA, a study has
Cash Improves in First Quarter
Cash and investments totaled $1,274,697 as of Dec. 31, 2000
but this climbed to $1,729,346 as of March 31 because many
members pay dues in the first quarter. Payables, which ballooned
to $1,034,507 as of Dec. 31, had been cut to $598,793 as
of March 31. Receivables were $539,756 at the end of 2000
and $256,945 as of March 31.
Net equity, which was $1,912,843 at the end of 1998, $1,486,555,
at the end of 1999, and $807,662 at the end of 2000, climbed
back to $1,120,445 as of March 31.
The Deferred Dues account, which PRSA had brought down from
$904,767 in 1991 to as low as $169,530 in 1995 when John
Beardsley was president, was $1,077,210 as of March 31.
Colletti Joins as CFO
Colletti, who has been working on a project basis at PRSA,
was named CFO. He was at Resources Connection, a spin-off
of Deloitte & Touche. From 1995-99, he was VP/finance,
Emery Worldwide Airlines. He has a BA in accounting from
Queens College and an MBA from St. John's University and
is a Certified Management Accountant.
Linda Burnett, VP and director of member services at Virtual,
Inc., association management firm, was named chief administrative
and member services officer at PRSA.
Edition, May 9, 2001, Page 8
editorial in the April 30 Advertising Age said Wall Street's
"takeover" of Madison Ave is a "good thing."
The current round of layoffs to satisfy the Street should
be accepted, it says. "A stock that keeps growing over
the long haul is a fine employee motivator," said Ad
Maybe ad people can be hired on a seasonal basis, but PR
pros need years to cultivate relationships with key press.
They need years to understand the companies and industries
they represent. They shouldn't be regarded as replaceable
Also, all stocks don't necessarily grow "over the long
haul." The stocks of the big three (Interpublic, WPP
and Omnicom) have gone nowhere for a year and a half. IPG
is 25 points off its high of $58.
Anyone who has any delusions about Wall Street should read
the May 14 Fortune cover story on the abuses and
conflicts of interest there. Wall Streeters are walking
off with inordinate sums while the public and companies
in need of capital get shafted. What comes across in 12
pages is the selfishness and ruthlessness of Wall St. and
The union of Wall St. and advertising is an odd and dangerous
The ad agencies have dipped into the public till for billions
of dollars in investments to open what should be like a
public park. But "no trespassing" signs are all
over the place. The ad culture, 100% devoted to client aims
and hugely secretive, is in conflict with its public ownership.
The agencies act like they're still private. Neither IPG,
OMC nor WPP has a PR pro to help with press questions; the
press is barred from OMC annual meetings; substandard, "pro
forma" earnings releases lacking a balance sheet are
a habit of these agencies, etc.
A subject unmentioned by Ad Age is the obvious danger of
having a half dozen ad agencies control 80% of ads in the
U.S. and worldwide.
to the O'Dwyer website do not like ad agencies taking over
PR. By a four-to-one margin, they voted "No"
to the question: "Ad agencies' purchase of 13 of the
15 biggest PR firms is good for PR?" We don't think
the conglomerates have shown any great talent in buying
out smaller ad/PR firms by offering them boxcar prices.
The only ones making out from many such deals are the sellers,
as consultant A.T. Kearney has noted (4/11 NL).
era of 20% annual growth for the ad conglomerates may be
over. For one thing, there are almost no sizable ad agencies
or PR firms left to buy. Also, the SEC's Fair Disclosure
Regulation will eventually force the agencies to stop playing
favorites with analysts. Reporters are going to be a much
tougher audience. Reg FD is good but it does not go far
enough. It should order corporate executives to give personal
interviews to reporters as well as analysts. Analysts insist
on "pressing the flesh" of CEOs and CFOs in order
to personally gauge their character and commitment. This
is "material information" that reporters should
Here are three questions we would have asked the recent
IPG teleconference had we been allowed to:
1. If the future of IPG is so rosy, as claimed by CEO John
Dooner and CFO Sean Orr, why have the insiders only proposed
selling IPG stock instead of buying any shares at all since
(37 insiders have proposed selling $20M of IPG stock.)
2. What pay, bonus and stock cuts are you taking since you
have prescribed them for staff?
What companies are you now going to acquire?
High executive pay, often topping $100M in a single year,
has become the norm at many companies. The top people
at the ad conglomerates play in this league. IPG CEO Dooner
was paid about $19 million in 1999 although the stock lost
more than a third of its value. This included $14.9M in
"restricted" stock (stock with the only "restriction"
that the person receiving it must stay with IPG four years
although this could be cut to one). Dooner also owns 1,085,662
shares worth $35M.
John Wren, CEO of Omnicom, is the beneficial owner of 1,667,313
shares worth about $130M. The value of his "in-the-money"
options is worth about $50M. Pay and bonus in 2000 was $3.07M.
PRSA's spending habits (page 7) tell a clear story of
insiders feasting on the treasury and dominance by educators
and non-profits. The travel bill of $717K is obscene
when compared to travel spending of $120K each at IABC and
NIRI. The loss of $441K on the APR program ($207K in fees
to outsiders!), and $200K on the students shows the influence
of the educators. Almost none of these subsidized students
ever joins PRSA. Our basic experience of the students is
that about 1,000 of them have four days of non-stop parties
at national conferences. We would also lay at the educators'
doorstep the $528K loss on Tactics and Strategist.
PRSA cannot afford two publications. The loss of $195K on
the national conference (while NIRI netted $1.4M on its
conference) is the reward for PRSA closing its exhibit hall
for five years. The spending of $1M on computer hardware
and software (for about 35 staffers, or $35K each) is mind-boggling.
We also don't know what happened to the five-year $1.25M
contract with Ray Gaulke. We asked chair Kathy Lewton when
the 250 Assembly delegates would be reachable with one e-mail.
She said no one else has asked for this and therefore saw
no need for it.