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Pagano to Leave Agency; Kay to Press On Alone

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BOSTON-The strain between Pagano Schenck & Kay partners Woody Kay and Bob Pagano finally broke up an 11-year partnership that saw their midsized agency rise to regional creative prominence.
By month's end, Pagano plans to leave the shop he co-founded in Providence, R.I., with Kay and former partner Ernie Schenck.
When asked why he was leaving, the agency principal said simply, "It's time." Pagano said he has not decided what to do next. Sources close to the executive said he is weighing two options: joining Mullen in Wenham, Mass., or becoming a partner in Kelley/Dexter in Boston. Mullen's Joe Grimaldi and Kelley/Dexter's Glenn Kelley declined comment.
Kay vowed to press on alone and keep the agency operating under the Pagano Schenck & Kay name.
Just last month, PS&K shared the best of show prize at the Francis W. Hatch Awards. Even then, there were signs of growing discontent between Pagano and Kay. The partners became increasingly polarized as client budgets dwindled, employees came and went and disagreement persisted over how to build the shop beyond its boutique origins, said sources close to the partners.
The tension between the two agency principals was palpable during an interview last week in Kay's cubicle in the shop's creative department. When Pagano suggested the interview be moved to a conference room for privacy, Kay declined, saying, "I have nothing to hide."
Pagano's decision comes at a difficult time for the Boston shop. Two weeks ago, after only eight months on the job, agency president and chief executive officer Rick Sandler departed after disagreements with senior management, particularly with Kay.
In addition, Dexter Shoe Co. has said it is putting its ad account in review after 11 years with the agency. Kay said he would pitch the business "as long as they'll have me."
At one time, the agency's largest client was Data General of Westborough, Mass., which pulled its creative assignment in-house some time ago. Media buying and planning duties remain at PS&K, said Virginia Lux, advertising manager at Data General. That will not change in light of Pagano's impending departure.
"We're satisfied with them. We have no immediate plans to change," said Lux, who would not discuss spending levels for the company's current print-based effort now running in technology magazines. Competitive Media Reporting pegged spending at $2.2 million last year.
Another of the shop's showcase accounts is A.T. Cross, which Pagano oversees. The Lincoln, R.I., maker of writing instruments is releasing its first line of watches with a print campaign by PS&K. The client did not return phone calls by press time.
Other clients, including Webster Bank, Dana Farber/Partners CancerCare, Eastern Bank and Whister Corp., could not be reached for comment or did not return phone calls last week.
Sandler, now ensconsed at Boston startup Hawley Cauley Sandler, said last week, "Woody is very much into the quality of the work. I think we all want that, and Bob shared that vision, but we didn't all connect. Something was lost between the strategy and the work," Sandler said. "Woody and Bob were very different kinds of people with different personalities and different visions for the agency."
Jack Wallwork went through a similar trial in 1992, when he and partner Glenn Kelley split up their agency, Kelley & Wallwork, after 11 years. When asked about PS&K's split up, Wallwork said, "It's unfortunate. They had an established agency and a very good reputation." Noting his own success with midsized shop Wallwork Curry and Kelley's solid run with Kelley/Dexter, Wallwork said that in his case, "It worked out for everybody. Hopefully, it'll be the same for [Pagano and Kay]. They're both very talented."
Steve Connelly, president of Ingalls Advertising in Boston and a longtime friend of both Kay and Pagano from their days working together at shops in Providence, R.I., said the most surprising thing about the breakup was that it happened when the agency seemed to have some momentum going, noting recent client additions Webster Bank, Dana Farber and Whistler.