Troubled Interpublic pays execs $41.4m in bonuses

LONDON – The Interpublic Group paid executives more than $41.4m for 2003 despite accounting scandals and a $102.5m loss for the fourth quarter.

According to a report in the New York Times the money was paid to an unnamed number of executives after the US ad group, which owns McCann-Erickson, paid no bonuses in 2002 and only minimal bonuses in 2001.

Last month Interpublic revealed the losses, which it blamed on restructuring charges of $40.6m and a loss of $38m relating to the sale of its Brands Hatch motor racing circuits.

The paper reports that the bonuses, which were paid in early March, will be formally disclosed to shareholders this week ahead of its May annual general meeting.

The size of the bonus payments are likely to anger shareholders coming on the back of the account scandal that saw it overstate revenues by $181m (£108.45m) over five years.

The scandal at Interpublic's McCann-Erickson WorldGroup cost the head of its chief financial officer Art D'Angelo. He followed his predecessor Sal LaGreca, who resigned at the height of the scandal.

Interpublic is the third-largest advertising holding company in the world behind Omnicom, which had revenues of $8.62bn (£4.69bn) in 2003, and WPP Group, with revenues of £4.1bn.

Delivering the results, David Bell, chairman and chief executive of Interpublic, said: "The significant success we've experienced in resolving the company's outstanding problems, in strengthening the balance sheet and in bolstering margins, makes it clear that the first phase of our turnaround will soon be behind us."

He said that the company would now be focusing on addressing the challenges and opportunities facing Interpublic's operating units and that there were signs of a revenue resurgence at McCann-Erickson.

The payments to executives at Interpublic follow shareholder concern in the UK over a similarly generous deal that could see WPP chief executive Sir Martin Sorrell walk away with £44m and lead to £112.5m being paid to WPP's 19 top executives.

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