Omnicom's Top Execs Saw Pay Slashed to Save Bonuses for Underlings

(MoneyWatch)  Omnicom's top executives took massive pay cuts so that their underlings could continue to receive their bonuses, according to a filing the company made with the SEC today.

CEO John Wren's total compensation in 2008 was cut from $10.4 million to $3 million. BBDO CEO Andrew Robertson saw his total package decline from $4.6 million to $1.8 million. DDB CEO Charles Brymer's pay was slashed from $3.8 million to $1.8 million. DAS CEO Thomas Harrison's wage tumbled from $4.9 million to $2.3 million.

In total, the top execs at Omnicom took home 63 percent less in 2008 than they did in '07. That's an astonishingly frank rejection of the pay-for-failure trend that has taken hold at other publicly traded companies, where despite layoffs, revenue declines and stock falls execs have nonetheless received jackpot bonuses.

Here's the summary table from page 13 of the document:

• Name, 2008 pay, 2007 pay, % decline
• CEO John D. Wren, $2.9 million, $10.4 million, -72 percent
• CFO Randall Weisenberger, $2.8 million, $8.2 million, -66 percent
• DDB CEO Charles Brymer, $1.8 million, $3.8 million, -52 percent
• DAS CEO Thomas Harrison, $2.3 million, $4.9 million, -53 percent
• BBDO CEO Andrew Robertson, $1.8 million, $4.6 million, -59 percent Numbers are rounded, compensation includes stock and options whose value changes over time.

Omnicom gave this explanation:

... in light of the excellent performance of lower-level Omnicom employees and Omnicom's goal of rewarding and retaining such employees, the burden of the reduction in incentive compensation would be borne primarily by Omnicom's senior executives, including the named executive officers.

As a result, despite Omnicom's achievements in 2008, based upon the recommendation of the Chief Executive Officer, the Compensation Committee determined that the amount of the cash bonuses paid to the named executive officers and the cash bonuses paid to other senior Omnicom executives for performance in 2008 would be equal to approximately 25% of the performance-based bonuses paid to such executives in the prior year.

These reduced bonus levels allowed senior management to provide for lower-level employees to receive incentive compensation

So if you got your bonus this year despite the recession, you should probably say a polite "thank you" to your CEO. That bonus came out of his bank account.

It wasn't all doom and gloom for the bosses, of course. Wren still pocketed $25 million on paper in stock options right before Xmas.

Omnicom's proxy statement also describes the executive perks that Wren et al receive. A major one is the use of private aircraft:

The total perquisites and other personal benefits include: for Mr. Wren, personal use of aircraft hours ($172,807) ... for Mr. Weisenburger, personal use of aircraft hours ($173,377) ... for Mr. Brymer, personal use of aircraft hours ($37,933) and entertainment expense ($5,554); for Mr. Harrison, employer premium payments for health and disability insurance ($78,941); for Mr. Robertson, an auto lease ($25,447), personal use of aircraft hours ($14,175), spousal travel expenses, club membership and personal financial planning services.

It's interesting that someone like Robertson -- who presumably flies to meet clients a lot -- uses the corporate jet less than one-tenth as much as CFO Weinberger.

• See previous coverage:
• Omnicom Delaying Payments to Photographers, Too
• Omnicom, in Cash Crunch, to Delay Payments to U.S. TV Producers
• Omnicom Sought to Delay TV Production Payments; a Sign of Cash Crisis?
• Clients Are Delaying Payments to Agencies
• Omnicom, Publicis Worst Hit in Auto Brand Axings
• Omnicom's Credit Crunch: a Gamble by CEO Wren That Didn't Pay Off
• Omnicom Q4: Slashing Jobs Faster Than Revenues Shrink Seems to Work
• Omnicom's John Wren Got $25 Mil. Stock Bonus Days After 3,500 Layoffs