The contract of Mr. Meyer, who turned Grey into gold when WPP Group bought Madison Avenue's last remaining independent in March 2005, is up Dec. 31, and indications are strong that the executive, who turns 80 years old Jan. 8, is preparing his exit.
Mr. Meyer unloaded most of his new WPP stock a day after selling the firm, leaving him with a limited stake in a larger company. The takeover deal allowed him to join WPP's board, but he declined. Mr. Meyer then set up a succession plan when he recruited Euro RSCG chief Jim Heekin to be chairman-CEO of Grey Global's flagship ad agency, Grey Worldwide, in August 2005.
Mr. Meyer was not available last week to discuss his plans, a Grey spokesman declined to comment and WPP Group CEO Martin Sorrell didn't respond to a request for comment.
The retirement, expected this month, would mark the second year-end change atop a WPP agency network. Last week, Young & Rubicam Brands announced that its embattled chairman-CEO, Ann Fudge, 55, would retire this month. After a string of account losses, Ms. Fudge in June relinquished the job of CEO at flagship Y&R Advertising. (See AdAge.com for more on her departure.)
At Grey, Mr. Meyer bridged generations. Lawrence Valenstein, age 18 at the time, opened the New York agency in 1917; Arthur Fatt, age 17, arrived in 1921; Mr. Fatt succeeded the founder as CEO in 1956 and hired Mr. Meyer that year.
Mr. Fatt became "founder chairman" in 1970, "remaining a sprightly presence at our Third Avenue offices well into the 1980s," Mr. Meyer wrote in a 1999 essay in Ad Age after his mentor's death.
Mr. Meyer joined Grey at age 29, going to work in account service on a newly won client, Procter & Gamble Co. P&G, the nation's largest advertiser, would become-and today remains-Grey's largest account.
Mr. Meyer joined Grey's board in 1961 and became chairman-CEO in 1970. Revenue grew from $29.5 million in 1970 to an estimated $1.46 billion in 2004, Grey's last year as a public company.
WPP paid $1.75 billion in cash and stock-$1,154 a share, or 118 times Grey's 1965 initial-public-offering price.
Mr. Meyer made shareholders rich, but he made himself richer. By Ad Age's estimate, Mr. Meyer and family interests wound up with about $445 million in cash after selling Grey, immediately selling most of their new WPP shares and collecting deferred compensation, supplemental pensions and a golden parachute. Factor in the value of stock options and remaining shares, and it appears Mr. Meyer and his family retained about $37 million in WPP stock after their initial share sell-off.
Add in Mr. Meyer's hefty annual compensation over the years, and his total estimated payday from Grey surpasses $500 million.
Mr. Meyer controlled 60.7% of Grey's voting shares through stock he owned, stock options and his oversight of an employee stock-ownership plan. He ruled Grey as his private empire and played by his own rules. Rival agency holding companies amassed a Monopoly board of Madison Avenue agencies to offer one-stop shopping to a consolidating roster of clients. Mr. Meyer, in contrast, bet on a single, focused network.
But speculation grew over time that Mr. Meyer would sell. In 2001, when he extended the end date of his contract from 2002 to December 2004, Ad Age asked: "Is Ed Meyer getting ready to go-and getting ready to sell? ... An industry veteran close to the Grey chairman said the extra two years is about as long as it would take to get a deal done."
Precisely. Mr. Meyer began talking with investment bankers about a deal in February 2004, though he didn't tell the board until that April. (Not that the board had much say in the matter. As a 2004 regulatory filing noted: "Mr. Meyer can elect all of the members of our board of directors. He can also exercise significant influence over our business and affairs. This includes any determination with respect to mergers or other business combinations [or] the acquisition or disposition of our assets.")
In July 2004, Grey formally disclosed it had hired bankers to shop the company. Two months later, WPP struck a deal to buy Grey, beating rival bids from Havas and private-equity firm Hellman & Friedman. The following March, the deal closed, setting the stage for Mr. Meyer's retirement.
He still has work to do, including his role as a director at Harman International Industries, an audio-equipment marketer, and Ethan Allen Interiors, a longtime Grey client.
In a statement, Ethan Allen's chairman-CEO, Farooq Kathwari, praised the "great marketing perspective" Mr. Meyer brought to the board, adding: "What has impressed me has been his down-to-earth, common-sense approach."
Mr. Meyer isn't necessarily leaving Grey's Midtown office tower. For five years after retirement, his contract gives him "office accommodations and support staff, certain travel accommodations, reimbursement for travel and entertainment expenses incurred in performing services for Grey."