Coughlin exits as IPG retool hits a glitch

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Interpublic Chief Financial Officer Christopher Coughlin stunned investors June 25 when he announced he would retire at the end of this year, exacerbating short-term uncertainty about a company under federal investigation and in the midst of a turnaround effort. The board moved quickly to replace Mr. Coughlin and also appointed a new chairman.

A year after joining Interpublic, Mr. Coughlin, 51, said he wanted to spend more time with his family.

Mr. Coughlin had been seen by some as a possible long-term candidate to succeed Mr. Bell. Mr Bell's current contract is up in March 2005, meaning the board must either re-up with Mr. Bell-who is widely perceived to have at least steadied a ship that was floundering when he took over in February 2003-or find a successor.

Robert Thompson, senior VP-finance, will become chief financial officer, and report to Mr. Bell, who until last week was also chairman. That title will be assumed this summer by Michael Roth, chairman-CEO, MONY Group, which is being acquired by AXA. Mr. Roth has been an Interpublic board member since 2002 and head of its audit committee.

Last week, Mr. Bell called Mr. Roth, 58, a strong partner. Both said they plan to remain at Interpublic until its turnaround was complete. Mr. Bell, however, could invoke a clause that allows him to depart with a fat paycheck should his responsibilities diminish.

operating loss

Before Mr. Bell took over in February 2003, revenue slightly exceeded operating expenses. By the end of March 2004, Interpublic had moved into an operating loss as expenses surpassed revenue.

Interpublic's first-quarter revenue was $1.4 billion, up 6%, from $1.32 billion in 2003; operating expenses hit $1.41 billion, up 8%, from $1.3 billion. Meanwhile, its net loss widened to $16.9 million from $8.6 million.

"[Mr. Coughlin] did everything he could in a year to shore things up, but fundamental things that had to happen, such as really whacking back the work force ... [that] no one was willing to do," said one Interpublic agency head.

contributing: claire atkinson, mercedes m. cardona, bradley johnson

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