Publicis creates executive bonus, retention scheme

PARIS, April 17 Wed Apr 17, 2013 3:00am EDT

PARIS, April 17 (Reuters) - Publicis is establishing a bonus and retention programme for 200 of its key executives based on whether the advertising agency reaches its growth and margin targets in the next three to four years.

Coming at a time of tough competition for talent and high salaries in the advertising business, the programme rewards executives with free shares of Publicis and further stock options if key goals of the group are met.

Chief Executive Maurice Levy will not take part. His pay and bonus became a contentious issue and fodder for media criticism in France last year during the presidential elections.

"Given the increasing competitiveness for talent in the global market, it is crucial for executives to be directly involved in the group's successes," said Levy in a statement on Wednesday.

"Co-investment in the group is the expression of executives' strong commitment as it requires taking a real risk with personal funds."

Publicis, which competes with WPP and Omnicom , saw weak organic revenue growth of 1.3 percent in the first quarter, dragged down by sluggish demand in recession-plagued Europe. It aims for organic growth in 2013 of 3.2-3.6 percent and for margins to improve.

In the medium term the group has pledged to improve its operating margins by 200-400 basis points compared with 2011 levels of 16 percent.

The group is holding an investor day in London on April 23.

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