Interpublic pays out £23m in bonuses

Interpublic is bracing itself for a shareholder backlash after reports that the loss-making communications group has paid out more than £23 million in bonuses to some of its senior executives.

The payments were made early last month to an unspecified number of managers, according to a report in The New York Times.

The bonuses, which relate to Interpublic's performance in 2003, were made despite an accounting scandal and a fourth-quarter loss of more than £58 million. They are due to be formally disclosed to shareholders in advance of the group's annual meeting next month.

Interpublic, the world's second-largest advertising holding company whose networks include McCann-Erickson, FCB and Lowe, verified an internal e-mail that revealed the bonuses, but was not available for further comment.

The news is expected to anger shareholders at Interpublic, which blamed its most recent losses on restructuring charges and the sale of its Brands Hatch motor racing circuit.

Meanwhile, the group remains the subject of a US Securities and Exchange Commission probe into how it came to overstate its revenues by £108 million over a five-year period.

The scandal centred on the McCann offices in Europe where revenue for single clients was booked by more than one office. The affair cost Sal La Greca his position as the McCann chief financial officer.

La Greca was succeeded by the former Cordiant finance chief, Art D'Angelo.

How-ever, D'Angelo parted company with McCann after just a year in the role.

Interpublic paid small bonuses in 2001 and none in 2002. However, David Bell, the group's chairman and chief executive, has insisted the worst of its problems have been overcome.

Announcing the group's results last month, Bell said: "The significant success we've experienced in resolving the company's outstanding problems, in strengthening the balance sheet and bolstering margins makes it clear that the first phase of our turnaround is behind us."

News of the Interpublic pay-outs come in the wake of protests by WPP shareholders at plans to pay Sir Martin Sorrell, the group chief executive, £44 million and to divide a further £112.5 million between 19 other executives.

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