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Wren bags $22m in Omnicom stock sale. Roth to sell $4m IPG shares

March 20, 2012

Omnicom president and CEO John Wren has just sold a lot of shares in his own company. Interpublic Group chairman and CEO Michael Roth is about to do the same.

What is it that they know, and we don’t?

First, some background. Wren sold 258,110 Omnicom shares, worth $12, 549,308 on March 9, according to an SEC filing – leaving him with a total of 1,127,721 shares. The sale represents about 19% of his total holding. In fact, that’s not the full picture, because he also exercised some stock options. The full amount realised appears to be nearer $22m.

Roth’s transaction, which will be executed on April 2, is slightly more modest. He’s selling a mere 324,341 shares which, at today’s prices, would net him about $3.85m.

It’s important to note that director share sales (or “insider trading” as it’s misleadingly called in the USA) are not always what they appear to be. CEOs of publicly listed companies have to act with extreme care when liquidating any of their company portfolio, partly to achieve tax efficiency, and partly to avoid spooking the stock exchange (not to mention shareholders) by seeming to offload too many shares at once.

Roth, for example, normally rebalances his IPG holding every year by buying as well as selling stock. That said, I do not see any evidence of him purchasing stock in 2012 – thus far. Indeed, he currently appears to hold the minimum IPG portfolio permitted to him under company rules. That is, shares valued at five times his basic salary.

So, it would appear he is cutting down at a time when IPG’s share price is nearing a high of about $12. Last September, it was in an all-time pit of $7.93, but IPG has been buoyed by a good trading performance of late.

With Wren, the telegraphy seems much clearer. He’s selling a lot of his stake in the company at one time, no two ways about it. Nor has he bought any Omnicom shares over the last year. In fact, no one insider has. Well, almost no one: a mere 500 shares for a total of $20,583 have been acquired.

If I were a securities house analyst, I might cynically conclude we have a “sell” signal here. Though I hope I am wrong about that.


Strong Interpublic financial results swell optimism in global ad recovery

February 24, 2012

Things really must be getting better in the global advertising economy, the cynical might observe. Interpublic, the world’s fourth-largest and most financially challenged advertising conglomerate, has just reported a decent set of Q4 results.

Despite a heavy kicking from principal clients SC Johnson – which quit after decades at IPG subsidiary DraftFCB – and Microsoft – which withdrew all its media strategy and planning business from media powerhouse Universal McCann – IPG was able to report profits (net income) up nearly 40% (50 cents compared with 36 cents per share) on revenue slightly ahead at $2.07bn.

Admittedly IPG chief executive Michael Roth was wary of calling a recovery. “We have some local wins and some existing clients spending money, but I wouldn’t say that the recovery is taking hold and we’ve seen bottom,” he said during the conference call.

But that cautious scepticism was surely belied by his assertion elsewhere that the company is setting out on the acquisition trail.

Besides, a slew of uplifting data elsewhere seems to suggest that IPG’s positive figures are not an isolated anomaly. Publicis Groupe and Omnicom, respectively numbers 3 and 2 in the world, have already posted Q4 results ahead of analysts’ predictions. WPP has yet to report, but there is no evidence the results will be grim. On the contrary, I have every reason to believe pre-tax profits and revenue will be well ahead of analysts’ expectations.

More circumstantially, but no less significantly, the US Advertiser Optimism Index – roughly equivalent to the IPA/BDO Bellwether Report over here – has just reported the second-highest level of confidence in ad budgets being raised since 2008. The index, published by research company Advertiser Perceptions, measured the sentiment of advertisers and agencies during October and November.

Finally, UK-based WARC has just produced a report suggesting America is leading the world out of (ad) recession. “Marketing spend in the Americas increased sharply in February,” it noted in an update to its monthly Global Marketing Index. Even doldrum European ad markets are experiencing “improving conditions”, it seems.

Let’s hope IPA/Bellwether doesn’t spoil the party with its next quarterly report, which must be coming out quite soon.


Why McCann’s Lee Daley wants his life back

July 6, 2011

Sad to see, if not entirely surprising, McCann Erickson Worldwide chief strategy officer Lee Daley throwing in the towel. Few people can have worked harder at Mission Impossible.

It’s important to note that at the time of Daley’s return to IPG-owned McCann, as chief strategist EMEA, in 2009, the troubled leviathan was under a very different leadership: that of ageing patriarch John Dooner.

Dooner was due for retirement, as he himself cheerfully admitted. The question was, who would succeed him? The most obvious candidates were Brett Gosper, CEO of McCann EMEA, Eric Keshin, the network’s COO, and Mark Dowley, network creative content and entertainment chief. Though popular in varying degrees, these candidates were also divisive. Enter Daley as a potential compromise candidate. He was an old McCann hand, having first joined the London office in 1990 where he rose meteorically to board director level. But he also had wider managerial experience in a variety of rival organisations. In 2001 his career began an odyssey which took him, successively, to WPP as worldwide CEO of Red Cell (later United), group chairman and CEO of Saatchi & Saatchi’s London office and eventually (if briefly) to Manchester United as commercial director.

IPG chairman and chief executive Michael Roth did indeed have a compromise candidate in mind, but it was not Daley. The man who seized the crown in early 2010 was Nick Brien, worldwide CEO of Mediabrands – who had done a sterling job of restructuring IPG’s ailing mediabuying behemoths Universal McCann and Initiative.

Since  when Brien has barely paused for breath in applying the age-old maxim ‘a new broom sweeps clean’. Keshin and Gosper have headed for the exit (though Dowley, I believe, remains).

Daley, in the meantime, was promoted to the network’s global leadership team and his present role – a consolation prize of sorts. Some consolation. In his lengthy resignation letter, reproduced in Ad Age, he makes it clear he hadn’t exactly landed on a bed of roses. The brief was to shore up McCann’s crumbling core clients, GM, Nestlé and L’Oréal. No time for the more rewarding task of pursuing new business – just 80 hours a week in an aeroplane relentlessly circumnavigating the globe in an effort to defuse one client crisis after another.

No wonder he gave up. Anyone would, in the circumstances.


Spotted in conversations at Davos: Levy and Roth

January 28, 2010

No doubt Publicis Groupe chief Maurice Levy and head of Interpublic Michael Roth were discussing snow conditions, or the iniquitous constraints about to be imposed on capital markets by the Volcker Rule. Or were they…? See below.

One thing that may have popped into the conversation is why IPG just got so close to busting its debt covenants that it felt it had to amend them on more generous terms. In plain language that means IPG probably won’t make its earnings forecast (bad news for the share price). IPG claims it’s just a “precaution”; but the trailing share price since the announcement says otherwise: analysts don’t believe the sweet talk. Good news for any predator, though…


The end of history for IPG

February 27, 2009

Interpublic’s Q4 figures just out. Profits down 4.?% yawn, yawn, yawn. Here’s an extract, if you’d like something with fewer harmful side-effects than Mogadon:

“The latter part of the fourth quarter and early part of 2009 have begun to show the negative effect that the broader economic situation is having on the marketing services sector,” said Michael Roth, chairman and chief executive of Interpublic.
But wait, what’s this? “Our long-standing conservative approach to financial and balance sheet management has us well positioned for these volatile times.” Would that be the self-same “conservative approach”, Michael, that your company was forced to adopt after an accountancy scandal which gave a new meaning to “double entry” book-keeping? Which resulted in several senior people in the McCann Erickson network being fired? Oh, and which precipitated a six-year long investigation by the US Securities and Exchange Commission, poleaxing IPG’s share-price all the while? And, and, and…culminated in a $12m fine last year?
As it happens, I think Roth has got quite a few corporate talents, in his dull, lawerly way. And keeping the basket-case that was IPG from ruin, or the depredations of Vincent Bolloré and Sir Martin Sorrell, have shown them to good effect over the decade. One quality I hadn’t attributed to him, though, was irony. How unamerican of him.

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