WPP bid opens Grey chief's parachute
US ADVERTISING agency Grey Global will pay chairman and chief executive Ed Meyer up to $87m (£47.3m) in cash when Britain's WPP takes over the group - and he will keep his job.
The payment does not include Meyer's shares and share options, worth about $351m.
According to online industry publication AdAge, Grey will give Meyer $51.8m for deferred pay over the past 10 years and an extra $22.7m as a 'settlement payment' to swap his old contract for a new one.
If the deal is closed this year, he will get an extra $12.4m on top of that. But his new contract will cut his base salary from $3.65m a year to just $1m.
In September WPP, headed by Sir Martin Sorrell, won a bidding war for Grey, one of the last major independent agencies, against San Francisco-based private equity firm Hellman & Friedman and French ad group Havas. WPP agreed to pay $1.52bn for the company.
Meyer, 77, was in the driving seat over the deal and held the deciding share on when and to whom the company was sold. Under his employment contract he was entitled to a golden parachute if there was a change in control of the company.
According to documents lodged with the US Securities and Exchange Commission, Meyer started looking for buyers in February.
Some investors are concerned that WPP, driven up by its rival bidders, paid too much for the company given its burden of e666m (£451.5m) in convertible bonds due in 2006. Grey showed $1.3bn in revenues last year.
