Stock Swoon Costly for Top Omnicom Execs

In April, DDB Worldwide CEO Keith Reinhard, Omnicom’s largest individual shareholder, owned stock worth upwards of $45 million. Today, those 482,770 shares are worth $22 million.

The breathtaking paper losses reflect a dismal June quarter for Omnicom Group, which closed Friday trading $45.80, down 51 percent from the $94.40 close of March 28. The stock hit an all-time low on Thursday when it slid to $36.50.

The stock dive comes as Omnicom continues to face public and SEC scrutiny following a June 12 feature in The Wall Street Journal that questioned its financial integrity. On Thursday, Moody’s Investors Service added to investor jitters when it put Omnicom’s senior unsecured debt rating on review. Omnicom responded to the news by saying it had ample liquidity to meet all foreseeable business and capital requirements.

Merrill Lynch’s Lauren Rich Fine, citing recent account wins at OMC agencies, is still bullish. “Fundamentally, we do not think there are issues at OMC and maintain our Strong Buy rating,” she wrote Thursday.

But so far, the markets have not heeded Fine’s call, and several of Omnicom’s officers face impressive losses, barring yet-unreported transactions. The 208,712 shares Omnicom CEO John Wren reported in the company’s most recent proxy statement are worth $10 million less just one quarter later. Allen Rosenshine, CEO of BBDO, who holds 282,840 shares, faces a $14 million hit.

The company’s current crisis of confidence with investors has not been a factor in Omnicom chairman Bruce Crawford’s decision to remain on the board. Crawford, who becomes chairman of Lincoln Center for the Performing Arts on Aug. 1, said: “At the beginning of the year John [Wren] asked me to stay at least through 2003.” Although his Omnicom obligations are not a full-time commitment, Crawford continues to play a key role in advising and counseling senior management. His holdings of 279,650 shares are off $14 million for the quarter.