Sooner or later most CEOs find themselves railing against the market/investors, usually saying their share price is too low and doesn’t reflect the company’s performance and prospects. And their pivotal role in it all of course.
Such seems to be the fate of Publicis Groupe chairman and CEO Arthur Sadoiun (above) who has recently been criticising what he calls ‘Wall Street’ (ie US investors) for marking down the company’s shares prior top its latest results and (maybe) not marking them up enough as he’s just delivered another good set of results. They’re inching up but still way short of the year high of one euro.
He has addressed his staff about the company’s priorities thus, as he told Campaign: We want our people to understand that we have a polar-opposite strategy. [WPP and Omnicom] have been talking very publicly about their need to reduce people, reduce their number of shares and reduce their number of assets. We are using the opposite strategy, and it’s important for people who have been reading about the share price and are raising questions to tell them what we stand for, what our vision is and why we are confident for the future.
And further, regarding the impact of the Omnicom-IPG merger: The real impact we are seeing today is that the financial market has decided that there are basically two players in this industry, because when you look at Omnicom plus us, we represent 80% of the value of this industry today. So there is a polarisation of the market with a concentration of value in two players. I would say this is the first big thing that came out of this consolidation. For the rest, I think time will tell. And again, it’s a long game.
Telling the market what to think and do is a bit like like advising the bruised and battered Iranian people on democracy. It’s a sure sign of a tin ear. Share prices go up when there are morw buyers than sellers. Sadoun’s other rival WPP has a lot to answer for here. Under departed CEO Mark Read it persistently said that recovery was around the corner. It may have believed that but we can see now that it clearly wasn’t. Eventually the wheels came off with the result that investors are sceptical about ad holding groups as a sector.
It could change of course; as Sadoun says it’s a long game and you can’t blame him for feeling frustrated. But at the moment he seems to be defying gravity and we all know what eventually happens there.
