NEW YORK Kraft Foods has fired Beekman Associates from its assignment to reassess agency compensation, sources said.
Beekman principal Bob Cauley said the company’s relationship with Kraft is unchanged. Kraft executives did not immediately return calls seeking comment.
A Kraft representative would say only, “We just don’t want to comment on compensation issues.”
Kraft, which markets brands such as Velveeta, Jell-O and Ritz crackers, had hired Beekman to evaluate how it pays roster shops Foote, Cone & Belding, a unit of the Interpublic Group; J. Walter Thompson, Ogilvy & Mather and Young & Rubicam, units of WPP Group; and Leo Burnett, a Publicis Groupe agency [Adweek, Aug. 18].
Kraft spent $775 million last year on ads in the U.S., per TNS Media Intelligence/CMR.
However, the Northfield, Ill.-based client grew concerned over Beekman’s policy not to sign non-disclosure agreements, according to sources.
It is not known whether Kraft will select another compensation consultant to continue the audit.
Kraft, which is 84 percent owned by Altria (the former Philip Morris Cos.), now uses a combination of commissions and fees.
Beekman has also stirred industry controversy because of the detailed information it asks agencies about individual salaries, overhead costs and profit margins. In February, while Beekman conducted a compensation review for Pfizer, roster agency Deutsch refused to sign a contract and supply that information, throwing three brands worth more than $150 million into review. Those Pfizer brands were reassigned in July.
This story updates an item posted on Sept. 24.
Kraft Sacks Agency Fees Auditor
