Corporate governance advisers have warned they have "problems" with how the bosses of Publicis and Omnicom have carved up boardroom roles between them for the next five years as part of their £23bn advertising mega-merger.
Maurice Levy of France's Publicis and John Wren of America's Omnicom will be co-chief executives for two and a half years, before Mr Levy becomes chairman for another 30 months, with Mr Wren staying as sole chief executive. Then Mr Wren will replace Mr Levy as chairman.
The shareholder advisory group Pirc said: "This isn't a good model of succession planning, to put it mildly. The position of chair is a vitally important one, and shareholders would prefer someone independent in the role, and it should be given to the best candidate for the job. It shouldn't be decided five years ahead, and shouldn't be a shoo-in for the existing chief executive." Alan Brett, the head of research at another advisory group, Manifest, said: "Clearly the chairman in this case won't be independent. Our clients would have problems around this issue. At least they are being open and transparent about it, but it is still against best practice."
City governance rules recommend that a UK chief executive does not become chairman.
An Omnicom spokesman said the plan for Mr Levy and then Mr Wren to be chairman did not break governance rules in the US and France, where the companies are listed, or the Netherlands, the new base for the merged company.
Critics have suggested the tie-up suits Mr Levy, who has been at the helm for 26 years, and Mr Wren, who has been in charge for 16, because neither had lined up a successor and they get enhanced roles.
Shareholders must approve the merger – which will mean Publicis Omnicom overtakes WPP to be the world's biggest advertising group – later this year.
- More about:
- Advertising Agencies
- Financial Markets
- Financial Regulation
- Stock And Equity Market And Stock Exchange