The Ad World's Excessive Exit Packages: Publicis CEO Could Say "Au Revoir" With $46M

Last Updated Apr 23, 2010 7:24 PM EDT

Publicis (PUB) CEO Maurice Levy's retirement package will likely be between €17.4 million and €35 million, which by amazing coincidence is of similar size to Publicis' entire provision for executive pensions as disclosed in 2009. (BNET noted previously that evp operations Jean-Yves Naouri was favored to succeed Levy at the top, and The Guardian agreed with my take today.)

The excessive size of Levy's retirement pay -- he's already rich, remember -- threatens to sully his legacy, as it could be even larger than that taken by McCann Erickson's John Dooner. Dooner's $37.7 million golden handshake is currently the talk of the industry, with rival CEOs spluttering at the size of it. As we head toward proxy season, executive compensation in advertising promises to remain a hot-button issue.

MarketingWeek's Stuart Smith has done the math, and he estimates Levy's package it could top €35 million (about $46 million). We can reverse engineer some of Smith's math by looking at page 69 onwards of this Publicis "reference" document from 2009. It states that upon retirement, Levy gets:

  • a deferred bonus equal to the total amount of bonuses paid or due to him since January 1, 2003, ...
  • [and] a total amount equal to 18 months of total gross compensation.
That's right -- having earned eight years' of bonuses for performance, Publicis is going to give Levy eight more years' of bonuses simply for saying "au revoir." There are some conditions, but Levy has likely met them all, Smith argues.

Levy received €3.6 million in compensation for 2008, the last year for which numbers are available. So his "gross compensation" payment will be in the region of €5.4 million.

The aggregated bonuses are trickier to calculate. At the low end, Smith says Publicis believes the aggregate bonuses add up to €12 million, which would give Levy a €17.4 million package.

However, if you assume that his bonus last year -- €2.5 million -- was average, then the aggregate is €20 million, granting Levy a €25.4 million package. Smith believes it's even larger than that.

Note that on page 71 of the document it states that even though Publicis spent only €3 million on executive retirement packages in 2008, it had provided a fund worth €26 million for them. That number happens to be smack in the middle of the range that Levy's expected to walk out with.

Qu'est qu'une coïncidence incroyable! Related: