Roth Is on the Rise at IPG

NEW YORK With Interpublic Group CEO and president David Bell’s contract expiring in March and chairman Michael Roth’s influence and popularity steadily increasing, one New Year’s prediction coming from IPG agency officials is that Roth will become the new top executive of the $5.8 billion holding company, sources said. The move is expected in the first quarter of 2005.

Bell is expected to remain in the picture but focus increasingly on client handling and development, sources said. Bell, 61, has held the top job since February 2003, when he replaced John Dooner. In July, Bell relinquished the chairman’s title to the 58-year-old Roth, an IPG board member since 2002.

Previously, it was believed that Roth’s growing responsibilities could be accommodated without a change in title. In the past month, however, as agency honchos have increasingly taken their cues from Roth, the notion of him becoming CEO appears more probable. Ultimately, IPG’s board, which selected Roth to be chairman, will decide.

Asked to clarify the roles of Bell and Roth, both currently and going forward, an IPG representative replied with statements from both.

“We asked Michael to join us as chairman due to his great operational and financial experience,” said Bell. “He and I are developing a strong partnership. We look forward to leading Interpublic’s turnaround.” Added Roth: “Things are unfolding exactly as we disclosed when I joined Interpublic. I’m learning the business. David and I are both involved in strategic, operational and financial matters. We intentionally don’t have a clear delineation of responsibilities and it’s working well.”

Roth initially focused internally on operational and financial tasks, particularly in the wake of chief operating officer Chris Coughlin’s abrupt exit. Since then, however, he has been interacting regularly with agency CEOs, on everything from salary negotiations to budgets, and garnering positive reviews for his “smarts” and “no nonsense” style. In November, he started to deal with industry analysts, a function that previously was the sole domain of Bell. Roth and Bell now share those duties, although Bell still has the lion’s share, a source said.

In addition, Roth has had a hand in recruiting, including the August hiring of Lowe worldwide CEO Tony Wright and last week’s hiring of Grey’s Steve Blamer, who will succeed Brendan Ryan as worldwide CEO of Foote Cone & Belding next year. Ryan plans to remain as chairman. Bell also was instrumental in those hires but notably, IPG’s internal memo on Blamer’s hire came from both executives and in interviews, Blamer cited Roth as one reason he came aboard.

The anticipated shift in leadership would not come entirely unexpected, given IPG’s lackluster financial performance relative to its peers and Wall Street impatience for a turnaround to take root. Still, Bell is credited with having reassured analysts after a turbulent two years with Dooner and another change at the top could be unsettling for some.

Other industry watchers, who have observed the uncertainty of recent years at the company, aren’t shocked that there may be additional management changes at the top of IPG.

“I’m not sure it was ever the case that David Bell was to be a permanent CEO at IPG,” said Troy Mastin, an industry analyst at William Blair & Co. “It’s tough to comment because I don’t know that this is happening, but if it is, I don’t think the change would be a big surprise. This is a company that has been through a lot of changes.”

—with Noreen O’Leary