IPG Rides Out Meeting

David Bell’s second annual Interpublic Group shareholder meeting, held last week at The Museum of Television & Radio in New York, was largely a smooth affair, but there were some bumps in the road during the 70-minute event. Five shareholders questioned the rationale for certain 2003 bonuses for Bell, now in his 15th month as chairman and CEO, and McCann Erickson WorldGroup CEO John Dooner, with Bell receiving $1.3 million, and Dooner $750,000. Shareholders also voiced concern about the performance of the board in light of IPG’s $181.3 million accounting imbalance, which was unearthed in 2002 and is still under investigation by the Securities and Exchange Commission.

“That is not deserving of a bonus,” said Kenneth Steiner, who said he owns 800 shares of IPG stock. “From this board and this management, we’ve gotten a raw deal.”

Some executives downplayed the comments, noting that some of the same shareholders had complained in years past. Still, their comments were accompanied by huzzahs and supportive applause. Bell relinquished the floor to the critics but did not respond.

Despite the criticism, the vast majority of the voting shareholders sided with IPG and its board as Bell continues his quest to turn around the $5.8 billion company. Ninety percent voted for a stock-incentive plan for non-management directors, and 85 percent for a performance-incentive plan. (Holders of 82 percent of IPG’s common stock cast votes, either in person or by proxy. Roughly 100 people attended the meeting, including shareholders, board members and reporters.)

The performance-incentive plan provides stock options, restricted stock and cash bonuses to up to 5,600 employees who contribute to the growth, profitability and success of IPG. The stock-incentive plan creates a pool of 200,000 shares of common stock as a means to attract and retain board members.

Re-elected to the board were Bell, COO and CFO Chris Coughlin, Dooner, presiding director Frank Borelli and outside directors Jill Considine, H. John Greeniaus, Richard Goldstein, Michael Roth, Reginald Brack and J. Phillip Samper. All 10 directors were re-elected to one-year terms.

During a half-hour, mid-meeting presentation, Bell cited the progress made in cleaning up the balance sheet, attracting talent in senior posts (such as Coughlin) and delivering results for clients like MasterCard at McCann. Bell also showed a reel of 14 spots that was heavy on MasterCard (with three spots) and included work for Monster (Deutsch) and Chevrolet (Campbell-Ewald).

With the Philip H. Geier Award for client service, Bell also recognized the efforts of 16 agencies working on Bank of America. Those shops include Deutsch, Gotham, Draft, R/GA and Jack Morton; their work is coordinated by Bruce Nelson, IPG’s evp and CMO. Also at the event, PricewaterhouseCoopers was reappointed independent auditor. Finally, shareholders rejected a resolution to adopt equal-opportunity-employment principles in Northern Ireland, with Bell noting that McCann in Belfast and Weber Shandwick Northern Ireland already follow such practices.