NY Post
Ad giant Omnicom may end or alter a perk that allows for posthumous payments to the heirs of CEO John Wren and other top executives after a significant portion of its shareholders took a dim view of his $41 million "golden coffin."
The ad conglomerate, which owns creative agencies such as TBWA and BBDO, opposed a shareholder resolution that would have curbed the controversial death-benefit policies for Wren and other officers.
Although the majority of Omnicom shareholders sided with the company, a sizeable block -- about 41 percent -- voted for the proposal submitted by Amalgamated Bank's LongView Funds, which owns around 72,000 shares.
"Golden coffins are contrary to the whole idea of pay for performance," said Con Hitchcock, an outside attorney for Amalgamated Bank. "You're not getting performance from someone who is dead."
Since most shareholder votes at Omnicom tilt heavily in favor of the company's stated position, the results caught the attention of Wren and other executives, according to one Omnicom insider, who predicted they would address the issue before it can be put to a vote again next year.
"They certainly noticed that a number of shareholders didn't approve of it when most shareholder initiatives are slam dunks for them," said the insider. "I think you will see it changed or reduced."
A spokeswoman for Omnicom didn't return a call requesting comment.
Several companies have reduced or changed their death payments after coming under pressure from shareholders. Last year, the board of the Walt Disney Co. decided to end the perk for CEO Bob Iger when his current contract expires.
Omnicom is required to make posthumous payments to Wren, Chief Financial Officer Randall Weisenburger and three other top executives, according to the company's proxy filing.
In the event the 57-year-old Wren dies on the job, his beneficiaries stand to get $1.25 million a year for 15 years, an incentive bonus of $5 million and a stock option award valued at $17.4 million, according to the filing.
"The $40 million is on the high side," Hitchcock said. "Not that many companies have these kinds of proposals."
The ad conglomerate, which owns creative agencies such as TBWA and BBDO, opposed a shareholder resolution that would have curbed the controversial death-benefit policies for Wren and other officers.
Although the majority of Omnicom shareholders sided with the company, a sizeable block -- about 41 percent -- voted for the proposal submitted by Amalgamated Bank's LongView Funds, which owns around 72,000 shares.
"Golden coffins are contrary to the whole idea of pay for performance," said Con Hitchcock, an outside attorney for Amalgamated Bank. "You're not getting performance from someone who is dead."
Since most shareholder votes at Omnicom tilt heavily in favor of the company's stated position, the results caught the attention of Wren and other executives, according to one Omnicom insider, who predicted they would address the issue before it can be put to a vote again next year.
"They certainly noticed that a number of shareholders didn't approve of it when most shareholder initiatives are slam dunks for them," said the insider. "I think you will see it changed or reduced."
A spokeswoman for Omnicom didn't return a call requesting comment.
Several companies have reduced or changed their death payments after coming under pressure from shareholders. Last year, the board of the Walt Disney Co. decided to end the perk for CEO Bob Iger when his current contract expires.
Omnicom is required to make posthumous payments to Wren, Chief Financial Officer Randall Weisenburger and three other top executives, according to the company's proxy filing.
In the event the 57-year-old Wren dies on the job, his beneficiaries stand to get $1.25 million a year for 15 years, an incentive bonus of $5 million and a stock option award valued at $17.4 million, according to the filing.
"The $40 million is on the high side," Hitchcock said. "Not that many companies have these kinds of proposals."
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