• Adweek, Monday, June 1, 2009 9:30 AM

This season of annual meetings is a critical time for shareholders to demand oversight of the boards of directors at advertising holding companies. Executive compensation will likely be the flash point amid soaring industry layoffs. For instance, IPG's top five executives, including CEO Michael Roth, were awarded pay equivalent to 7.8% of the holding company's net income last year, per RiskMetrics Group. As a comparison, the top five at Omnicom, including CEO John Wren, received 2.3% of net income.

The election and reelection of non-executive directors is also under scrutiny, with questions about some board members' independence. As an example, at IPG's recent annual meeting a resolution asked IPG's board to give shareholders of 10% of outstanding common stock the power to call a special meeting, which would include the topic of election of directors. IPG management opposed the resolution, and it was narrowly defeated.

Attendance at board meetings is also an issue. For instance, a number of WPP members dropped below the 75% attendance threshold of responsible governance last year, per RMG. A WPP rep responds: "If members are unable to participate in person, they do by phone, and they contribute substantially between board meetings."

Read the whole story at Adweek »