New Chairman Roth Is A Growing Presence In IPG Operations

Two weeks after ascending to chairman of Interpublic Group's board, Michael Roth presided over his first meeting involving agency chiefs. The CEOs of IPG's four main divisions—McCann Erickson WorldGroup, FCB Group, The Partnership and the Constituency Management Group—presented mostly rosy pictures of the state of their businesses, according to executives who attended the early August information session.But Roth, described by one source as a "fiscal hawk" who is "stern in his steering of the company from a Wall Street perspective and corporate-governance standpoint," wasn't buying. He asked why the numbers of the underperforming units did not match their leaders' words—typical, said executives, of the frank, no-nonsense style of IPG's increasingly powerful new chairman."Michael is not in this for ceremony," said one colleague. "He's not a ceremonial guy. He's a player.""He's extremely smart, and he's a very quick study," added an agency executive. "And if you don't try to bullshit him, he won't bullshit you."Roth, a board member since early 2002 who served as IPG's Audit Committee chairman, was named chairman after COO/CFO Chris Coughlin's abrupt exit in July and immediately made his presence felt.The 58-year-old New York City native has had a hand in major personnel moves, such as last month's replacement of Lowe worldwide CEO Jerry Judge with Ogilvy & Mather's Tony Wright. (Roth was among the execs who interviewed Wright before he was hired.) Also, along with CEO David Bell, he is involved in succession- planning discussions at Foote Cone & Belding, said sources.And less than two months into his tenure, Roth has already met with scores of CEOs, creative chiefs and worldwide account chiefs.Roth not only runs board meetings but also handles operational and financial tasks, such as planning budgets and cutting costs, according to sources. And he's no stranger to a company in peril: Roth spent 14 years at The MONY Group, taking a life-insurance company on the verge of bankruptcy and transforming it into a diversified group of businesses offering everything from insurance to brokerage services and municipal bonds. He joined as CFO in 1989 and became chairman and CEO in 1993.Roth initially focused on shedding underperforming assets. Over time, MONY grew and diversified through a series of acquisitions, including U.S. Financial Life Insurance in 1998, Advest (brokerage) in 2000 and Lebenthal & Co. (municipal bonds) in 2002. He left shortly after MONY was acquired by AXA for $1.5 billion.At IPG, Bell continues to be the point person for key clients, institutional investors and industry analysts. Over time, however, sources said they expected Roth, a CPA with a law degree, to pick up at least some of the Wall Street outreach work and have a voice in strategic-positioning decisions involving various agencies.Roth declined an interview request, and Bell could not be reached last week.In an Aug. 5 analysts' call, Bell described Roth, whose office is next to his, as "an exceptionally bright, tough-minded and intuitive individual."Clearly, in his first 47 days, Roth has made an impression. But the beleaguered holding company's problems have been stubbornly difficult to resolve.IPG is 15 months into what Bell has described as a 12- to 36-month turnaround plan that began a few months after he replaced John Dooner in February 2003. The company's problems include $2.2 billion in debt, a federal investigation into a $181.3 million accounting imbalance, and leadership and growth issues at units such as Lowe and FCB.Last week, Standard & Poor's placed IPG on CreditWatch with "negative implications," citing the debt load, senior-management turnover, and "material weakness in the company's internal controls related to the processing and monitoring of transactions."Roth may find, as Dooner, Coughlin, Bell and others have, that IPG is a particularly tough challenge to crack. Said an agency executive: "I think he's intrigued because this is a fix-me situation, and guys like him are turned on by that. … [It's] not going to be a six-month job, and he knows that."

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New Chairman Roth Is A Growing Presence In IPG Operations

Kathleen Sampey

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Kathleen Sampey