Roger Haupt resigned as president-chief operating officer of Publicis Groupe in December. But that won't stop him from drawing $3.5 million in paychecks over the next five years from the holding company and its Leo Burnett Worldwide unit.
Publicis will pay Mr. Haupt, 57, a total of $1.4 million under a consulting contract running through 2007, according to a recent filing with the Securities and Exchange Commission. A deal with Burnett that expires in December 2009-and includes health benefits-will dole out $2.1 million.
Both arrangements contain noncompete clauses. But neither appears to demand a draconian workload. The Burnett contract states that Mr. Haupt agrees to provide services "when required."
Representatives for Publicis and Leo Burnett-where Mr. Haupt was an executive from 1984 to 2000 before taking a senior role at parent BCom3 and then Publicis-defended the arrangement. Access to former execs "is smart business," a Burnett spokeswoman said. The Publicis spokeswoman said, he "has ... rich and valuable experience."
Such arrangements are ubiquitous in corporate America. To compete for talent, companies typically offer high-level execs some sort of pension or post-retirement income plan. But some deals raise eyebrows among compensation and corporate-governance experts.
David Bell, chairman of Interpublic Group of Cos., is in line for a five-year post-retirement consulting deal that will pay him an annual fee equal to 75% of the average of his base salary for the preceding three years, according to Interpublic's 2004 proxy. Based on his salary for 2001 to 2003, he'd receive more than $4 million over the life of the deal. In exchange: up to 10 days of consulting a quarter.
John Dooner, Chairman-CEO of McCann Worldgroup, is due annual payments of between $1.08 million and $2.4 million for 15 years depending on the year he retires, resigns or otherwise is no longer employed.
Paul Hodgson, researcher for corporate-governance-research firm Corporate Library, called the upper limit "excessive." Studying CEO supplemental retirement plans at Standard & Poor's 500 companies, he found about 30 receiving in excess of $2 million a year.
Interpublic said it works closely with outside compensation experts to develop its packages and that they are "vital for a company in a talent-intensive business such as ours."