Omnicom Group CEO John Wren sharply defended his advertising holding company’s accounting practices and denied there is boardroom dissension in the wake of a published report that sent shares of the company spiraling downward.
The sharp drop in Omnicom’s stock–the industry’s star perfomer–on Wednesday was the talk of the ad industry, in which most of the big agency networks are owned or in the process of being bought by the industry’s largest holding companies.
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Omincom’s shares fell nearly 20 percent to $62.28, an improvement from a drop of 25 percent in early trading. The shares fell following a report in the Wall Street Journal that said Robert J. Callander, the head of the company’s audit committee, resigned from the board last month after questioning whether certain disclosures were made to the board about the off-loading of certain investments and the buyback of two Internet firms.
The article focused on the disclosure of Omnicom’s investment in an Internet holding company called Seneca set up to house more than a dozen of Omnicom’s Internet acquisitions.
The Journal reported that Seneca acquired additional stakes in some of the Omnicom firms and in return, Omnicom receives preferred stock in Seneca. One advantage of the maneuver, the report stated, was that it allowed the company to avoid the possibility of writing down the value of its investments in some of the firms.
In defending the company, Wren said the article was filled with “numerous inaccuracies” and said the only thing new was “innuendo.”
No doubt weighing heavily on the mind of investors Wednesday was the timing of the story, coming on the heels of several accounting scandals and a sudden scrutiny of accounting practices across several industries.
The story and Omnicom’s subsequent stock dive were enough to pull down shares of much of the industry.
While defending Omnicom, Wren said that the company would make its financial reporting more transparent.
“Our integrity … is paramount,” he told analysts during a conference call. “This company has never taken charges, never swept anything over the side, and we’ve tried to do our best in terms of transparency and disclosure.”
Reddi-wip real moment coming: What do you do with your Reddi-wip? ConAgra Foods wants to know. The company this week launches an aggressive marketing campaign for its topping. The company is launching a Reddi-wip “real moments” sweepstakes, giving consumers a chance to win a cash prize for the best Reddi-wip moment. The company will take the program on the road to major cities and will launch a new ad campaign in late summer with the tagline, “Let the Fun Out.”
Koenig goes to Sony: Derek Koenig, most recently director of advertising and brand management at Riverwoods-based Discover Card, is heading to Park Ridge, N.J.-based Sony Electronics to become director of consumer segment marketing. He’s one of three directors reporting to Sony vice president Ken Dice. Dice and Koenig previously worked together at Leo Burnett.
Marketing changes at Whirlpool: In a restructuring at Whirlpool Corp., Timothy Yaggi was promoted to senior vice president and general manager, brand portfolio group, North America. Yaggi had previously served as vice president, Whirlpool and KitchenAid brands, North America. Yaggi will have responsibility for Whirlpool’s North American portfolio of brands as well as North American sales and marketing operations.
John Alexander was named vice president and general manager of the Whirlpool brand, reporting to Yaggi. Also, Karim Lalani was named vice president and general manager, Sears Sales and Marketing, North America, responsible for Whirlpool’s business with Sears, Roebuck and Co.
On the move: Fred Smith, co-founder of the former Leap Partnership, may be headed to Publicis in Mid America as chief development officer of the agency, reporting to agency chief Barry Krause, sources said. … Deborah M. Pimsner to Midwest manager of Premiere magazine on June 25. She most recently worked at Health magazine as account manager. … Carole Widmayer, formerly a publisher at Cahners Publishing, joins Schafer Condon Carter as an account director on its General Mills business.
Correction: Apologies to former J. Walter Thompson media executive Shari Wall, who should have been listed among other media executives in town named Advertising Woman of the Year. She was honored in 1991.