Hey, Interpublic Group, could you fire me as well?

Interpublic Group, the beleaguered holding company, announced last Friday that they fired their CFO, Nicholas S. Cyprus, after only two years of service. While they wouldn’t say why they canned Cyprus, they were forced to disclose his severance package. Wow, talk about sweet. Check this out: he gets more than $1.6mm in salary, incentives and allowances, will be vested to receive 110,508 common and restricted shares of Interpublic stock, and options to purchase an additional 76,109 common shares. He’ll also receive up to $35,000 in outplacement and legal fees.

Phew! Where do I send my resume? If this is how Interpublic Group rewards failure, what must they do with the winners? Private villas on the Mediterranean? Fractional jet ownerships? A yacht or two?

More to the point, though, this sort of embarrassingly-high severance package will do nothing to assuage Wall Street that these guys have turned the corner and are making fiscally smart decisions. Some organizations seem hardwired to repeatedly shooting themselves in the foot. Sadly, Interpublic seems to be a classic example of the genre.

5 thoughts on “Hey, Interpublic Group, could you fire me as well?

  1. I-man: You’re disagreeing again just for the sake of disagreeing. It’s been pretty well documented that Interpublic has not been doing well. They’ve been hemorrhaging for years.
    Companies, and the people that run them, make bad decisions all the time. The extreme cases include Enron, Andersen, Tyco, Global Crossing, etc. The less extreme cases include ones like IPG that make decisions that are not in the best interest of their shareholders.
    Also, the size of an executive’s severance package or a CEO’s bonus is no indication of the company’s overall health. Look no further than Bernie Ebbers or Dennis Koszlowski: these guys were taking home colossal pay packages while their companies were secretly imploding.
    Do me a favor? Send me a list of all the stocks you own. I want to make sure to stay away from each one of them.

  2. Perhaps there was some sort of provision in his contract? Has to be a reason they’re trying to make nice with this guy.

  3. This makes me wonder why would they give such a package to anyone? There has to be a reasonable explanation of why any company in the world would shell out 7 figures to someone they were firing. Could it be that he knew about trade secrets that would have cost them more than the 7 figures had it gotten out? Who knows. The fact is Interpublic thought it was wise to spend the money, and while we may not think it was wise, it seems like they are doing well enough to dole out such packages. And any company that can afford to give away 7 figures is doing well in my book.

  4. Their CFO Robert Thompson left last June after just one year. Wonder what he got. Time for my nap.