Publicis to start search for new CEO
PARIS (Reuters) - Publicis (PUBP.PA) will begin the search for a new chief executive next summer, veteran CEO Maurice Levy told Reuters on Wednesday, speaking for the first time in public about a succession plan.
Levy, who is 69 years old and has led the company for 23 years, said he believed his successor would be picked internally and need not be French. The company has not set any fixed timetable for the selection nor for Levy's departure.
Levy is only the second CEO to lead Publicis since it was founded 85 years ago. During his tenure, the company has gone from a family-owned business to a global advertising powerhouse, the third-biggest agency by revenue.
Speaking at the Reuters Global Media Summit, Levy said the process would include a lengthy search of internal candidates by the supervisory board, expanding to outsiders if needed.
"We have to find the best man or woman with the best judgment and strategic mind and the capacity for taking this group to the next level," he said.
"We also have to find somebody who will be strong enough to change things which were important to me and not feel he or she is tied by the decisions I have made in the past.
Jean-Yves Naouri, who was named chief operating officer in March and also heads Publicis' efforts to expand in China, is seen as the leading internal candidate.
Other members of the management board could also be considered, such as Jack Klues, the CEO of digital unit VivaKi, and Kevin Roberts, CEO of Saatchi & Saatchi.
The move to start the official succession race doesn't necessarily mean Levy will depart right away.
Earlier on Wednesday, the supervisory board of Publicis renewed the mandates of Levy and the four other members of the management board for terms of four years.
"It will be up to the supervisory board and myself to decide whether I will serve the full term or not and that depends on succession planning," Levy explained. "We have not decided whether it will last only 6 months or it will take two years," he said.
Much will depend on how the economic crisis shakes out. Last year the board persuaded Levy to stay on to help pilot Publicis though the turmoil despite an earlier plan to step aside by the end of 2011.
"It appears to be a very measured and well planned succession so Levy could well still be there in a couple of years yet," said Simon Baker, analyst at Credit Suisse. "By then it could be a more stable environment and therefore a less critical decision."
EXPECTS TO OUTPERFORM
With ad agency performance largely linked to the economic cycle, investors have been wary of the sector in recent months for fear that Europe's sovereign debt crisis and persistent unemployment would slow consumer spending.
Levy said some big companies had been trimming back their advertising budgets at the end of the year but that he was not seeing drastic cuts like in the 2008 financial crisis.
Asked whether Publicis was putting contingency plans in place to cope with the European debt crisis, Levy said that he remained optimistic that leaders would reach a consensus and the break-up of the currency union would be avoided.
"If it is the apocalypse, then there is nothing we can do as a company, but I don't think it is," he said. "We will have tough times but we will surmount this and after this crisis we will have learned and we will have changed a few things that will make us better."
Levy confirmed Publicis' goal to outperform the market in terms of growth this year and next, but admitted that the end of the year would be difficult.
Levy said that he expected overall growth in ad spending this year to be 3.4-3.5 percent, accelerating to 4.5-5 percent next year.
Publicis' in-house forecasting unit Zenith Optimedia is expected to pare back its annual forecast for 2011 next week, he said. In October it had predicted 3.6 percent growth.
Regardless of growth prospects, Levy said that Publicis was well positioned to keep improving profitability given its focus on emerging markets and digital strength. He conceded that salary costs were rising as the group has to increasingly compete for talent with the likes of Google and Facebook.
For his part, Levy is no longer running Publicis just for the money. He said he had recently asked the board to cease paying him a fixed salary and instead pay him based only on his performance.