Interpublic Shareholders Nix Sale Idea

NEW YORK During an hour-long meeting today that some described as surprisingly tame, Interpublic Group shareholders reappointed all eight board members standing for re-election and rejected a proposal to sell the company to the highest bidder.Shareholders also rehired outside auditor PricewaterhouseCoopers, which has handled IPG's auditing since its inception. Two other board members, John Dooner and David Bell, did not seek re-election. The votes, which came against a backdrop of continuing losses, accounting problems and a related Securities and Exchange Commission investigation, followed the recommendations of IPG's management. And during an unexpectedly calm and quick annual meeting this morning, only one stockholder, Ken Steiner, voiced dissent, saying he was voting against veteran directors Jill Considine, Reg Brack and Frank Borelli and supporting the so-called "maximum value" resolution which seeks to hire an investment banking firm to field bids for IPG. Steiner said those board members had "presided over a massive loss of shareholder value."Steiner, who said he owned about 1,000 shares of IPG stock, said a potential sale was worth investigating given the myriad problems at the No. 3 advertising holding company. (On the "maximum value" resolution, he was speaking for Charles Miller, the shareholder who put forth the proposal.)He also said that the problems arose on the watch of the three directors, who serve on the board's audit committee. In addition, an institutional investor advisor, Glass, Lewis & Co., had recommended that shareholders vote against the directors.Each was re-elected, however, and 87 percent of the shareholders casting ballots voted against the proposal to sell the company, IPG CEO Michael Roth said.In addition, nearly 92 percent approved the rehiring of PWC. "That was the most surprising thing to me today," said one senior agency executive attendee.Stockholders also approved an employee stock purchase plan, with 85 percent voting yes, 5 percent voting no and the rest abstaining, Roth said.Roughly 86 percent of those eligible to vote, cast ballots, an uptick from the last annual meeting, when 82 percent voted, an IPG representative said. The voters represented 372 million of the 430 million outstanding shares of IPG stock, the rep added.The support for board members ranged from 84 percent (Borelli) to 91 percent (Roth, John Greeniaus, Dave Thomas, Richard Goldstein and Phil Samper), according to the rep. About 85 percent voted yes on Brack and Considine. Roth, in his explanation for re-electing the directors and rejecting the sale proposal, said the entire board is actively involved in IPG's bid to turn itself around and that selling the company would disrupt that effort and fail to enhance value.After the meeting, he acknowledged the shareholder frustration behind the sale proposal—"shareholder value hasn't been where it should be"—but interpreted the outcome of that vote and those re-electing directors as "an indication that management is focused on a turnaround." Added Goldstein, one of the directors: "I think you'll find that the board supports Michael's view. Foote Cone & Belding worldwide CEO Steve Blamer reiterated Roth's turnaround sentiment, adding that a sale is "not going to increase shareholder value" and that the proposal was therefore "ridiculous."About 125 people attended the meeting, which was held in at the McGraw Hill Building in midtown Manhattan.

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Interpublic Shareholders Nix Sale Idea

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