Shepherd-Smith, who was named best account handler at the IPA Best of the Best Awards earlier this week, has been made chief operations officer.
Mildenhall has been named as the sole managing director of the agency.
The chief executive, Andrew McGuinness, who is expected to attend business school in 2004, insisted the restructure did not signal that Mildenhall was being lined up to be his successor. He said: "They remain equal in the agency structure. Joint managing director sounds like they are sharing one job when in reality they are doing two jobs. This recognises that."
In his new role, Shepherd-Smith will be responsible for improving TBWA's creative, deepening relationships with key clients including Abbey and 3 and extending these into TBWA UK Group.
He was instrumental in winning the whirlwind pitch for Abbey and led the team that retained 3. He will share joint responsibility with Mildenhall for general operations of the agency. Mildenhall's key focus will continue to be talent management, new business and marketing.
McGuinness added: "We're incredibly lucky to have two people of such phenomenal talent. These promotions are the first step to ensuring we have a brilliant 2004."
Last October, the duo were promoted to joint managing director after TBWA's chief executive, Garry Lace, resigned to take the top post at Grey Worldwide London.