Four weeks after Carter Murray took the Draftfcb CEO job, he’s still walking the halls of Young & Rubicam, and it could be September before he joins his new agency.
Why? Because Y&R parent company WPP Group is holding him to the six-month notice period in his contract—at least for now, according to sources.
Historically, notice periods were designed to give an agency losing an executive time to find a successor. Also, a cooling-off period between jobs, in theory, keeps an outgoing exec from using client business information in his new post. In Murray’s case, however, Y&R has already filled his North American CEO role with insider Matt Anthony, and the bigger brands that Y&R and Draftfcb handle don’t compete head-to-head. In other words, there’s little Y&R client information that Murray can exploit at Draftfcb, a unit of Interpublic Group. Yet, there he sits as a lame duck at Y&R.
Whether Murray shifts to “garden leave,” or getting paid to not even show up, is beside the point. WPP is paying someone who has resigned and wants to leave. Other holding companies block such exits as well. Publicis Groupe made Tony Granger wait six months before he could exit Saatchi & Saatchi and join Y&R in 2009, even after Saatchi had filled his chief creative officer job with Gerry Graf. It could have been longer, though, given that Granger had a one-year notice period in his Saatchi contract.
Competitive wrangling aside, some say the practice seems like a waste of time and money.
“If the employee gives notice, the company has the option to cut them loose and stop paying them or to keep them from taking the new job but have to pay them,” said attorney Rick Kurnit, a partner at Frankfurt Kurnit Klein & Selz who represents both ad execs and agencies. “The question is, is it really in the shareholders’ interest to pay somebody just to obstruct them from moving on, or is that done out of pique?”
While he declined to talk specifically about Murray, Y&R global CEO David Sable framed the broader issue of notice periods in simple, legal terms: “People sign contracts. They have no right to sign a contract that they don’t intend to keep.”
The stakes are high in the latest episode of sabre rattling. Draftfcb, set back by major client erosion in the past two years (SC Johnson, MillerCoors, Kraft, etc.), spent six months looking for a new global leader and sees in Murray, a seasoned account handler, an opportunity to reverse the slide. For now, existing leaders like outgoing CEO Laurence Boschetto will run the 8,800-person shop. Murray, Draftfcb and WPP declined to comment, and IPG could not be reached.
Other industry leaders appreciate concerns about ex-employees exploiting marketer information, but nonetheless question the wisdom of paying money for nothing. “I’m not sure what the point is,” said TBWA worldwide CEO Tom Carroll. “You have to try to protect your clients. On the other hand, if that’s not the case, I think it’s a little overreaching” to keep someone who wants to leave.
Blocking an exit may also create ill will with the departing exec, making the person unlikely to ever return, added Mark O’Brien, North American president of DDB. And, in an industry that places a premium on talent, that’s a competitive disadvantage. As O’Brien put it, “It doesn’t pay in the long run to pay someone to do nothing for spite.”