ANNUAL REPORT DETAILS CORDIANT EXECUTIVE PERKS
NEW YORK (AdAge.com) -- Cordiant Communications Group released its 2002 annual report today, detailing sizable payments to current and former staff. One of the most surprising facts to emerge is that former CEO Michael Bungey remains a paid consultant for Cordiant.
Bungey's $1.18 million
Mr. Bungey, who stepped down as CEO in March, received $1.18 million as part of that separation. The annual report also shows that under a separate consulting agreement he is set to receive fees of $157,000 until March 2004 -- and a bonus of up to $79,000 for achieving non-specified targets.
According to the report, Mr. Bungey
Whitehead's $1.3 million
A footnote in the company's remuneration report mentions a $1.3 million payment made to a former executive director, William Whitehead, in connection with his resignation. Mr. Whitehead was the former president of Bates Americas and stepped down early in 2002 following the loss of the media and creative portion of the Hyundai Motors North America account and other business.
Hearn's $164,000 moving fees
The document also details the $164,000 relocation costs paid to current Cordiant CEO David Hearn for his move from Australia to the U.S. Mr. Hearn is in line for a $3.3 million payment if the company closes a sale to WPP Group.
WPP has offered $17 million for Cordiant's stock and $430 million for the company's debt. However, the deal is being held up by U.K. investment firm Active Value, which late today held a 25.7% stake in the company. Cordiant and WPP need the agreement of owners of 75% of Cordiant stock for the deal to go ahead. Active Value reportedly wants to increase the price paid by WPP for Cordiant.
WPP's deal to buy Cordiant would give Cordiant shareholders one share of WPP stock for each 205 shares of Cordiant. That was worth around $17 million when the deal was announced last week. However, WPP's stock has fallen since then, meaning shareholders as of today would get $16 million. Meanwhile, Cordiant's stock has increased in worth as Active Value buys up shares; the market value of Cordiant stock today is about $20 million, or $4 million more than WPP had offered.
Share prices may not affect Mr. Hearn. As of Dec. 31, 2002, he owned zero shares of Cordiant, though he did have some stock options.
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Bradley Johnson contributed to this report.