Ad boss keeps his job and earns $30m 'compensation'

Click to follow
The Independent Online

The boss of the American advertising group which was taken over last week by Sir Martin Sorrell's WPP will receive almost $30m (£18m) "compensation" for keeping his job.

The boss of the American advertising group which was taken over last week by Sir Martin Sorrell's WPP will receive almost $30m (£18m) "compensation" for keeping his job.

Edward Meyer, the chief executive, chairman and controlling shareholder of Grey Global, will receive the lump sum even though he will remain in the same position after the $1.4bn takeover. He is entitled to the compensation because of a termination clause written into his employment contract, which runs out at the end of this year.

Mr Meyer had originally been in line to receive the maximum windfall of $32.9m, as agreed in his contract.

But because the takeover may not be finalised until the beginning of next year, when his contract with Grey Global would have expired, the full amount will not be paid out.

It is understood the precise details have not been worked out, but that he stands to receive between $25m and $30m. Mr Meyer, holding around 20 per cent of Grey Global's shares, will also receive $300m from selling his stake. WPP has given him a new contract, terminating his old deal with Grey Global. It is understood that he will receive around half of his old basic salary of $3.5m from his new employer.

Grey Global will send shareholders a prospectus outlining the details of the offer, including his severance package, in the next few days. The shareholder vote on the deal will be a foregone conclusion since Mr Meyer holds 70 per cent of the voting shares. Mr Meyer, 77, became chief executive and chairman of Grey Global in 1970. It is the world's seventh-largest advertising group.

WPP beat off bids last week from French rival Havas and San Franscisco-based private equity group Hellman & Friedman to buy the company. Analysts say that Havas is now itself vulnerable to a takeover following its failure to land Grey Global.

The French firm also faces pressure from corporate raider Vincent Bolloré, who has built up a stake of at least 10 per cent in the company and is now its biggest shareholder.

Comments