Hiding in Plain Sight: Omnicom CEO Disclosed His 1.5M Options Grant, But No One Noticed

Last Updated May 12, 2010 3:53 PM EDT

Investors recently all-but-accused Omnicom (OMC) CEO John Wren of backdating his stock options, but Wren actually has an airtight defense: He told everyone what he was doing and no one listened. Because Wren acted in plain sight -- and no one noticed -- he and his managers and directors were able to snap up 8 percent of the company for themselves at prices so low they were a steal.

It's another lesson in the details of management compensation: Because it's so complicated, and disclosures are scattered over months or calendar years, top executives can sometimes make a killing without causing a ripple.

Investment manager David Poppe wrote to Omnicom shareholders asking them to vote against Wren's re-election to the board after the company gave him 1.5 million in low-price stock options in December 2008 and March 2009, when OMC stock was at its lowest. All told, Omnicom's top brass took 26.1 million in options for themselves in the two grants. The stock has almost doubled in price since then. Poppe estimates the options are now in-the-money by about $500 million.

Poppe's letter notes that there were no other options granted at Omnicom since 2003. He also mentions other options grants taken by Wren et al prior to 2001 that were received at low points in the market -- a miraculous coincidence. But those grants occurred before a change in the law that now requires companies to disclose options within two days of their grant date. Wren's 1.5 million options were disclosed to the SEC in December 2009 and March 2008 -- and everyone missed it.

"We learned of them from the proxy and the annual report," Poppe told BNET today. "If I missed it, shame on me."

File under, "How to Steal Your Own Company Without Breaking the Law."

Related: Image by Flickr user altemark, CC.

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