Mr. McGrath said this sets up Mr. Badenhop to eventually lead the agency.
"He's been appointed as the guy who's going to run this business when I'm not here," said Mr. McGrath, 64, calling his succession plan an "orderly transition."
Mr. McGrath, 64, wouldn't disclose the exact time of his planned retirement, but added: "I'll definitely be here in three years, but probably not in five years."
Mr. Badenhop, 51, was director of client services. He began his tenure at the agency 17 years ago as VP-account supervisor on the Nestle USA account.
"He knows where we've been and he's got a lot of great ideas for where we're going in the future," said Mr. McGrath.
One future project Mr. Badenhop is working on is the creation of a "strategic insight group," which he said will combine research and account planning components to help clients with their strategic needs.
"Before you do the advertising, you have to win at the point of strategy," Mr. Badenhop said.
He said the agency will continue to stay focused on consumer products such as package goods and healthcare.
Jordan McGrath clients include Procter & Gamble Co., SmithKline Beecham, Novartis, Pharmacia & Upjohn, Hasbro and Welch Foods.