New figures from Ad Age show that US agencies and other communications companies (including PR) cut 36,400 jobs in April as Covid-19 struck, down 7.5 per cent. Hardly surprising as up to 20 million jobs across the US have been lost so far.
But are the big agency bosses feeling the pain too?
Wren, Read and co. have been quick to announce they’re taking salary cuts but salary is only a small proportion of what they usually earn. An analysis sent to MAA shows:
Omnicom – CEO John Wren.
What he says he is doing – Cutting 100% of his salary for 2020.
What he is actually doing – In 2019 Wren earned: $1m salary, $10.625m cash bonus (which is usually paid in April but because of Covid-19 will be paid later in 2020), $8.075m bonus paid in restricted stock, $118,780 in cash benefits (car, private jet allowance for personal use, pension, insurance) so a total of $19,818,780.
So, by foregoing his salary for 2020 that is the equivalent of a 5.05% reduction in overall compensation based on what he earned in 2019.
IPG – Michael Roth.
What he says he is doing – taking an undisclosed cut that “will flow through to total compensation as well”
What he is actually doing – In 2019 Roth earned $1,650,000 salary, $6,906,545 restricted stock bonus, $7,564,625 cash bonus, pension benefits of $82,088 and other cash benefits of $386,914 so a total of $16,590,172.
Not clear what his undisclosed cut represents but he claims it is a deeper cut than the others.
WPP – Mark Read
What he says he is doing – taking a 20% salary cut in Q2.
What he is actually doing – In 2019 Read earned £975k salary, £35k benefits, £171k pension, £805k cash bonus, £537k restricted stock bonus and £71k long term incentive so a total of £2,594,000.
So, by foregoing 20% salary in Q2 that is the equivalent of a 1.88% reduction in overall compensation based on what he earned in 2019.
Side note: WPP is reported to have sought a Covid-related £600m loan from the UK Government.
Publicis – Arthur Sadoun.
What he says he is doing – cutting salary by 30% from April for 6 months.
What he is actually doing – In 2019 Sadoun earned €1m salary, €1.4m cash bonus and €865,800 bonus in restricted stock so a total of €3,265,800.
So, he is foregoing €150k in 2020 that is the equivalent of a 4.6% reduction in overall compensation based on what he earned in 2019.
Of course these captains of industry may not receive any bonuses, stock options, expenses and all the rest of it in 2020 although big companies usually find a way of sending rewards to their leaders even when – to a layman anyway – they’re struggling. Remuneration consultants are a wonderful thing if you’re a CEO.
This is an amended version of an earlier story.