The details of Wren's death benefits are scattered throughout this SEC filing (start on page 19). Here's a breakdown of what the top brass at Omnicom gets just for dropping dead:
- Beneficiaries get 75% of their annual payments (in Wren's case that's $18.75 million over 15 years).
- Unvested options vest in full
- Restricted stock granted in 2006 and 2007 vests in full.
In our view, "golden coffin" arrangements, which can require a company to make significant payments or awards after an executive's death, are inconsistent with [pay for performance]. Senior executives should have ample opportunities while they are alive to contribute to a pension fund, purchase life insurance or engage in other estate planning strategies suitable to their needs. We see no reason to saddle shareholders with payments or awards in return for no services.Omnicom defended the payments by saying that they are needed to attract talent and to keep them focused on long-term performance goals. "Such benefits are common in our industry," the company told shareholders. But there's more than one way to create long-term incentives. (Sorrell, for instance, only gets his riches if he's successful -- he loses his own money if he's not.)
Omnicom has this backwards: Golden coffins aren't the solution to executive pay; they're the problem.
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