Interpublic Group Settles With Elliott; Appoints Three Directors

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Elliott’s Jesse Cohn said their dialogue with Interpublic Group was constructive

Interpublic Group of Companies announced its decision to appoint three new independent directors as part of its settlement agreement with Elliott Management.

Interpublic Group is one of the largest  advertising and marketing services companies worldwide. Last year, there were speculations that the company was considered by some as an attractive takeover candidate. 

Details of the agreement

Interpublic Group of Companies signed a letter of agreement with Elliott on February 4, 2014. Under the terms of the deal, the company will increase the size of its board to ten. Two of its current directors will resign no later than March 1, 2015.

In addition, Interpublic Group agreed to appoint Henry Miller, Jonathan Miller and Deborah Ellinger as independent directors. They will be included in the company’s slate of directors up for election during its 2015 annual meeting of shareholders.

In exchange, Elliott agreed to vote in favor of all the nominees of Interpublic Group.

Furthermore, Interpublic Group agreed that it will take all actions necessary to form a finance committee. It will consider the recommendations of the finance committee. It will not disband it before January 21, 2016 (expiration date).

The finance committee will be composed of five members consisting of the three new nominees and two existing independent directors of the board.  Interpublic Group also agreed to appoint the chair of the finance committee to the executive committee of the board.

It will also appoint Henry Miller and Jonathan Miller to the corporate governance committee, and Deborah Ellinger to the compensation and leadership talent committee.

Statement from Interpublic Group

Interpublic Group said its two current directors— Jill M. Considine and Richard A. Goldstein will retire from the board effective March 1.  The board of directors of the company selected the three newly appointed independent directors through a search process that was initiated last year.

Michael Roth, Chairman and CEO of Interpublic Group said the company will to able to achieve its four key objectives by refreshing its board and creating a new finance committee.

According to him, “As we enter 2015, we felt it was important to build on our momentum, consolidate our achievements, reaffirm our commitment to further margin enhancement, and position the company for continued value creation going forward.”

Roth added that Interpublic Group has been successfully executing on a strategic plan that enabled the company to generate strong top-line growth and increased profitability. According to him the company has been delivering industry-leading total shareholder returns over the past five years.

Elliott had a constructive dialogue with Interpublic Group

Elliott’s head US equity activism, Jesse Cohn said their dialogue with Interpublic Group was constructive. He said the company showed impressive commitment to enhancing shareholder value.

He added that the three newly-appointed independent directors have the right backgrounds and perspectives to help the board achieve such goal, both operationally and strategically.

Elliott beneficially owns 6.9% of the outstanding common stock of Interpublic Group.The activist hedge fund initiated a position in the company last year.

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