NEW YORK Interpublic Group shareholders today soundly rejected two activist proposals that the holding company had opposed—one to separate the roles of CEO and chairman and another to recoup bonuses paid to top executives in the event of a restatement.
The votes came during IPG's annual stockholder meeting in New York, during which shareholders also re-elected eight directors, reappointed PricewaterhouseCooopers as outside auditor and adopted a performance incentive plan for 2006. About 88 percent of those eligible to vote cast ballots, either in person or by proxy, according to IPG CEO Michael Roth.
IPG had argued that it already had a presiding director with independence and therefore did not need an independent chairman—the primary rationale for the first measure. Also, IPG earlier this year instituted a policy to recoup bonuses if a restatement stems from wrongdoing.
More than 94 percent of the voting shareholders rejected the Recoup Unearned Management Bonuses proposal, while more than 3 percent favored it and 1 percent abstained, Roth said. The vote on the chairman/CEO measure was slightly less lopsided, with 92 percent voting no, 7 percent yes and less than 1 percent abstaining.
Ken Steiner of Great Neck, N.Y., who proposed one of the measures, acknowledged after the vote that such resolutions rarely pass. "They get 5 percent or 10 percent but they wake management up," said Steiner, who said he owned about 1,500 shares of IPG stock. "None of these proposals have the force of a bylaw. They're merely [designed] to push [management] in the right direction."
During the 50-minute meeting, Roth also reflected on 2005 results and goals for 2006. And, at one point, he touched upon the possibility of combining Foote Cone & Belding and Draft.
Roth stressed that IPG continues to consider different options, but he discussed creating a "modern agency model" that would have one profit and loss center and a single management team—both characteristics of a straight merger.
Roth did not provide a timetable for a decision, but sources have said that IPG is shooting for early June. After the meeting, Roth said, "I want to resolve this sooner rather than later."
Roth, Frank Borelli, Reginald Brack, Jill Considine, John Greeniaus, Phillip Samper, David Thomas and Richard Goldstein, who succeeded Borelli as presiding director, were re-elected to one-year terms at the meeting.