Y&R South Africa to give employees a stake

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JOHANNESBURG -- Young & Rubicam is planning a change in its equity structure to include "significant" shareholdings in its South African operation by local executives, both black and white. In an announcement here, local managing director Lucas Ferreira says this "best guarantees our abilities to be the best communication partner for our clients."

The agency here is 100% held by the global network, but has suffered a series of losses of senior executives in recent months, some of them to start up their own agencies.

The agency lost about a third of its billings last year, when its $8 million in gross income earned it seventh place in the table of South African agencies. The previous year it was fourth. The major problem area was the Cape Town office, which had to be closed after its last two pieces of significant business, Smirnoff vodka and J&B whisky, were realigned internationally to the Lowe Group and J. Walter Thompson Co.

More business was lost three months ago when new business director Doug Maritz resigned, as did a number of accounts with combined billings of $5 million. Some of the business went with Mr. Maritz to his new agency, called Zoom, which is owned by Ogilvy & Mather Rightford.

Copyright June 1998, Crain Communications Inc.

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