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.


Wall Street bad guys Gordon Gekko and Bud Fox take leading role in ads

March 2, 2012

Can bad guys play a redemptive, positive role-model in advertising? I touched on this in my (seemingly popular) post on SS colonel Otto Skorzeny, who has been hailed by British adman Dave Trott as a creative thinker.

Now, bizarrely, the two anti-heroes of 1987 film “Wall Street” have, quite separately, been recruited into public service as spokesmen for, respectively, Chrysler/Fiat and the FBI. Does this work?

First, some background. Of the two, the FBI’s decision to use Gordon Gekko (catchphrases: “Greed is good” and “Lunch is for wimps”) as its frontman for a 60-second public service broadcast on combatting securities fraud is the more controversial.

Clearly Gekko actor Michael Douglas brings an interest and Hollywood glamour to what would otherwise be a very dull and arcane subject for a PSB. Gekko is merely a successful associative device in the public mind: the archetypal shyster who would know every last wrinkle about concert parties, insider trading, junk bond fraud and Ponzi schemes. Ultimately, the power of the ad depends on a willing suspension of disbelief. That is, the dissociation of Gekko’s character from that of the man who plays him. Douglas himself, who did a reprise of the Gekko role in the 2010 film “Wall Street: Money never sleeps”, has in private life been a passionate anti-gun lobbyist ever since the assassination of John Lennon, and has also espoused various anti-war causes. So the jump to a crusader for financial probity does not, perhaps, have to bridge too big a gap.

The danger is the ad will gain recognition rather than respect. It will be Douglas we remember, not the FBI’s determination to stamp out securities fraud. Celebrity will trump gravitas. Anyway, here it is:

Meanwhile, Gekko’s susceptible side-kick, Bud Fox, is making an appearance in an ad for the Fiat 500 Abarth. I should say it is not Fox himself, but his real-life persona Charlie Sheen who is actually doing the stunt-driving. Fox was Sheen’s most high-profile role: ever since it’s been one long, drunken, roll downhill, arrested by increasingly frequent stops at the rehab clinic. It is on this well-publicised off-stage “bad boy” image that Fiat is, rather degradingly, attempting to capitalise, in order to promote its mini “hot-rod”. Makes you wince just to watch. But then, I’m not the target market.

I guess the man has to earn a living somehow, and you could claim he has creatively adapted his career. There’s more on the ad here.

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