Report Shows Klues Third Highest Paid Publicis Exec At $2.5 Million

With a salary of $1 million and a bonus of $1.5 million during 2006, Publics Groupe Media chief Jack Klues appears to be the media buying world's highest paid executive, according to details of an annual report released Saturday by Publicis Groupe.

The report, which lists Klues' total compensation including various "benefits in kind" for fiscal 2006 at $2,517,076, makes him the third highest paid executive on Publicis' management team and puts him just behind Chairman-CEO Maurice Levy's $4,515,749, and Saatchi & Saatchi Worldwide CEO Kevin Roberts' $3,975,951 salary and bonus, and proves that agency media executives can now earn on par with the top managers and creative executives working on Madison Avenue.

But while Klues' annual compensation, which was up 21% over 2005, makes him the most handsomely compensated media agency chief in terms of salary and bonus, it does not necessarily mean he has the sweetest package overall. Of the top agency media executive compensation packages that have been reported over the past year, WPP Group media chief Irwin Gotlieb actually generated more total value after long-term compensation plans are factored in.

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During 2005, the last year for which WPP has reported its top-level manager compensation, Gotlieb, who operates as chairman-CEO of WPP's GroupM unit, earned a base salary of $750,000, a bonus of $684,000 and "other compensation" of $16,000, but was paid an additional $2,789,000 in payouts from long-term compensation plans, as well as $38,000 from "all other compensation," bringing his total 2005 package to $4,277,000. That made Gotlieb the second highest paid executive inside WPP Group after Chairman-CEO Martin Sorrell's total package of $10,758,000.

While data on other top publicly held media agency chiefs such as Omnicom's Daryl Simm, or the heads of privately held media agencies such as Horizon Media's Bill Koenigsberg were not accessible, it is clear that the heads of media operations at major global agency holding companies are now being compensated on par or better than their peers in other operating divisions within their organizations.

During 2005, David Verklin, CEO of Carat Americas and Carat Asia, earned $1,489,360, according to Aegis Group's annual report, making him the second highest compensated executive at the London-based agency holding company after CEO Robert Lerwill's $1,925,760 salary, bonus and other benefits.

All of these compensation figures are before stock options are factored into the executive earnings, meaning the real value of their packages are actually much higher. According to Publicis' 2006 annual report, Klues has options for 338,164 shares of Publicis stock at an average weighted price of $33.93, or a total options value of nearly $11.5 million.

In its report to shareholders, Publicis said the main criteria for determining the $1.5 million bonus paid to Klues was "the growth of Publicis Groupe Media's operating income relative to the budget and goals." According to the report, media operations accounted for 26% of the company's revenues during 2006; and Klues presided over operations that accounted for about 22% of Publicis' worldwide organization of 39,939 employees.

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