IPG Executives Give Back 1.2 Million in Options

CEO David Bell Defends John Dooner Pay Package

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NEW YORK (AdAge.com) -- Interpublic Group of Cos. executives gave back approximately 1.2 million in stock options awarded to them as part of their compensation packages, citing the agency holding company's poor stock performance, Chairman-CEO David Bell said.

IPG CEO David Bell cited the 'poor performance' of company stock.
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Top management
Speaking at Interpublic's annual shareholders' meeting today, Mr. Bell said several executives contributed options to the giveback. Mr. Bell said the returned options will be put to use as incentives to retain talent. Those involved in the giveback included Mr. Bell; Philip H. Geier, Interpublic's chairman emeritus; Brendan Ryan, CEO of Foote, Cone & Belding Worldwide; and Interpublic's former chairman-CEO, John J. Dooner, who gave back 500,000 options.

"They gave a noble amount [of options]. Anything more would beg questions," said Mark Shapiro, an Interpublic shareholder and former executive at Momentum, the company's event-marketing unit.

Questioning Dooner package
Though the shareholders were generally supportive of management, especially of Mr. Bell, they posed some politely pointed questions challenging the company's compensation of its top executives as Interpublic's stock had plummeted in the past two years. One shareholder questioned why Interpublic would award a retirement package to Mr. Dooner, who stepped down as chairman in February and returned to his previous post as CEO of McCann-Erickson WorldGroup.

Mr. Bell defended the decision, saying the package was given in recognition of Mr. Dooner's 30 years of performance at McCann-Erickson and that it was set at a time when market conditions were different.

Another shareholder asked whether McCann executives have been asked to return bonuses awarded in past years due to an $181.3 million restatement of earnings for 1997 through 2002. Mr. Bell said the company has not asked for a reimbursement since the amount is not material to the bonus awards.

Defending compensation
Mr. Bell also defended Interpublic's overall executive compensation, saying it was in line with the rest of the advertising industry, but he did note Interpublic paid no bonuses to its top brass in 2002 and had paid reduced bonuses in 2001. Additionally, he said he and Mr. Dooner are placing their stock options in escrow until Interpublic's stock price reaches $20 per share. The stock closed at $12.14 on Monday.

Mr. Bell repeated his vow to shareholders that the company will renew its financial discipline and improve revenue growth and margins.

"It's evident to us we've hit a rough patch in the road," he said, though adding that it didn't mean the holding company model was invalid.

"When a holding company gets it right, there's no better place for a client to go," he said.

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Lisa Sanders contributed to this report.

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