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Wait a Minute: Publicis Actually Linked Pay to Performance!

Publicis (PUB) CEO Maurice Levy took a massive pay cut last year -- 75 percent, taking home just €900,000 -- even though the ad agency holding company grew revenues by nearly 20 percent. The disparity is explained by a quirk in the way Publicis reports its numbers: Levy's 2010 bonus wasn't paid until this year, and thus isn't counted. In 2010, Levy said he would give up his 2009 bonus "as a gesture of solidarity" with his employees, many of whom he had laid off after promising not to.

It's an astonishingly rare moment in the annals of executive pay: The Publicis management team's 2009 compensation (paid in 2010) more than reflected the economic damage on its books. Pay appears to be genuinely linked to performance (click to enlarge):

Don't shed too many tears, though. A note in the disclosure describes management's 2010 bonuses payable in 2011 (via Google Translate and my high school French):

On March 8, 2011, after hearing the recommendations of the Remuneration Committee, the Supervisory Board fixed variable compensation for fiscal year 2010 payable in 2011 to members of the Board as follows:
  • Maurice Levy: €2,700,000
  • Jack Klues: $2.1 million
  • Jean-Yves Naouri: €700,000
  • Kevin Roberts: $2,100,000 (plus contractual payment of pension of $1,154,000)
  • Jean-Michel Stephen: €384 000.
Levy announced he would retire in 2011 but it is not yet clear who will succeed him. If we read the 2010/2009 compensation mix as tea leaves, they suggest something very odd indeed about the relative importance of the Silver Fox's potential heirs:

Saatchi & Saatchi CEO Kevin Roberts was paid nearly twice what his boss, Levy, made, due to differentials caused by the amount of bonuses they agreed to give up. Does that mean Publicis is trying to keep him sweet once Levy eventually decides to decamp to le Midi? (Roberts is 61 and thus may be too old for the gig.)

VP/operations Jean-Yves Naouri, whom I've previously tipped as a favorite for the job, was paid the least, just €600,000. Naouri also gets the smallest 2010/2011 bonus, which says something curious about his status.


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