Charlie Scott, Cordiant's chief executive, said at the company's annual general meeting that severance costs from firing 470 staffers will total about $16 million. A non-cash write-off of goodwill from the April sale of Minneapolis agency Campbell Mithun Esty adds another $25 million.
Mr. Scott said the company has replaced 3% of revenues--half the amount lost--with new assignments from Procter & Gamble, Johnson & Johnson and BAT.
Mr. Scott said the new top executive the company has been seeking for the last five months could become either chairman, responsible for setting company strategy, or chief executive, in charge of day-to-day operations. Mr. Scott said he himself will remain with the company either in his current role of chief executive or switch to chairman.
Although small shareholders criticized Cordiant--and Mr. Scott--for everything from accepting more business from a tobacco client, B.A.T, to their handling of the ousting of previous chairman Maurice Saatchi last December--the meeting went relatively smoothly. Shareholders were relieved that Cordiant and Mr. Saatchi reached an out-of-court settlement on a series of lawsuits, although Mr. Scott estimated the legal costs to Cordiant at up to $1.5 million.