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Tuesday, May 21, 2013

The Richest People In Advertising



On May 13, the Advertising Business Insider published a list of the highest paid people in the business.  God bless them all.

The irony about this list is that, with the exception of the heads of some of the agencies, most are people not in the public eye.  I actually didn't know the names of many of them. They are financial people, board members, even one lawyer. But they are very much in charge of the future of the business.  I actually spoke to the president of the New York office of one of the largest agencies controlled by someone on this list.  He had met one of the people on this list, who worked at the holding  company of his agency, but was sure that this person would not really know who he is, despite running the biggest office in the network.  That is simply stunning. 

Since most people reading this blog post will be working at companies which employ the majority of these people, everyone should click on the link to determine who these people are and  how much they are making.  Most of them received salary increases last year despite their companies not doing all that well.  

Executive compensation is determined by boards of directors which usually control a compensation committee.  In reality, those committees – and board members – serve at the discretion of the board chairman.  Now we all understand that the big guns like Martin Sorrell, Myles Nadal, John Wren and Maurice Levy and others are entitled to make a lot of money.  I would guess that most of them work 24/7 and are on a plane too many days a year to count.  These people should be paid well.  Their salaries belie huge amounts of other compensation – limousines, planes, cars, luxury travel, private chefs and others.  I don’t begrudge any of them anything.

The financial executives on this list make staggering amounts of money.  They are also the people who determine who can get a raise, a promotion and which agencies need to cut staff.  These policies are dictated to to all their agencies.  I suppose that is there job since almost all their companies are publicly traded  and they must insure upward numbers for their shareholders.  Many of these people o have nothing to do with the day-to-day business.

What really bothers me is not that they are making so much money, but that they put themselves before their employees.  The majority of their companies have salary and promotion freezes.  It is hard to imagine someone making millions, but denying a lowly administrator a  meager increase or a creative or account person who slaves for 80+ hours a week a promotion and a raise.

One additional comment.  

I simply wish some of them would give back their million dollar raises so that their executives who serve them faithfully can get well deserved raises.  As my mother used to say, “What’s good for the goose is good for the gander.”  It is also good management policy.

10 comments:

  1. I wish this list were accurate. It would be more interesting. The fact is there are so many senior people in advertising making 500k - it's just that their salaries aren't public. The real list would show a lot more people at the bottom of that list in the high 6-figure range (if that low).

    Your point that their agencies are on hiring freezes makes the difference even more pointed.

    On the other hand, what do Hollywood moguls make relative to gaffers? Maybe we should all take the Ben + Jerry's route...

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    1. It isn't my list. I know that there are many people who make $1,000,000 plus. Most are deserving. My point is that few advertising people know these people and that if they wanted their business to grow and be more profitable they might consider sharing the wealth.

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  2. Sad in two ways. One is that while most are, as you say, "in charge of the future of business", they are not involved in what their companies do: the creation of ideas. Instead (or largely because of that), the goal of many of these companies is the creation of profit and revenue. For Two, see One: all of these people are employees of large holding companies.

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  4. Paul, The corollary to this is how anonymous are the people in advertising today who, as the saying goes, do the work. Twenty five years ago, I could surely name 7 of the top 10 agencies' Creative Directors. Today? Not a one. Where are the stud names like Dusenberry, McCabe, Kuperman and Messner to name a handful? It's baffling.

    Livingston Miller
    President
    Seiter & Miller Advertising
    New York

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    1. Indeed, Livingston, the business has become homogenized.

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  5. The lack of diversity of any kind is disturbing. One woman among the list of 37. And all are Caucasian.

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    1. Thanks for this comment. I thought the same thing exactly. There is sill a glass ceiling which is too bad. I know so many talented women who deserve much more than they are getting.

      The diversity thing is an issue. There just aren't that many people. The Japanese, I believe, do not have to report their incomes so that eliminates Dentsu. Ditto the Koreans with Cheil. But I am sure that there executives in those companies who make a lot of money.

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  6. Just a few quick points for balance:

    1) Holding companies are NOT agencies ... They are banks and/or financial organizations that happen to trade in the agency business!

    2) While I don't know any of the listed execs personally, I am familiar with most of them and I can tell you this - the vast majority come from financial (CFO) or legal (General Counsel) backgrounds. They deal with "deals"; money; and the law. Not creative, media, digital, etc., or the "little people" (like me) doing such things in the factory.

    3) There are plenty of "agency" CEOs, presidents, CFOs, COOs, CIOs, et al, making millions. BI's list just covered "holding" companies.

    4) There a plenty of agency women making millions. Just ask the likes of a Linda Kaplan Thaler or Lori Senecal how much they make.

    5) As to “diversity”, it’s an issue in almost every industry. Fact is that most of America is caucasion, with African-Americans and Hispanics accounting for about 25% of the total U.S. population. So, go to a “white” agency and you will find mostly caucasions. Go to an Afro-American or Hispanic shop and you will find exactly what you think … relatively few caucasions

    Given all of the above, I have a hard time faulting IPG’s Michael Roth or MDC’s Miles Nadal for their $9.0 million annual salaries when guys like Chases’s Jamie Dimon are pulling in two or three times that amount and wrecking the country. Or Yankee’s Alex Rodriguez making $25 million a year and doing nothing.

    Finally, there is a very good reason why these people make a lot more money compared to the rest of us … They have no genuine “quality” in their personal lives, and that’s a very big price. And fortunately for me, not one I’ve ever been willing to pay! Bill Crandall

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    1. Bill, you make some good points but I need to make some observations.

      1) While holding companies do function as banks, they were originally started as adjuncts to agencies. For the most part they have expanded tangentially to related advertising and marketing services – production, research, planning, strategic planning, etc. However, they are indeed ad agencies. More and more we are seeing the actual holding companies pitching and winning accounts. Bank of America and Team Detroit at WPP; IPG with The Army.

      2) You are probably right. But it doesn’t mean that they should not be concerned with “the little people” as you put it.

      3) I am not sure there are that many million dollar employees – and I know many of the senior people. They are making less than you think. One of the problems in the business is that everyone thinks that everyone else is making a lot of money. Advertising no longer pays as well as corporate.

      4) You are way off base. I happen to know what each of them is making – salary and bonus. Neither makes a million dollars a year, even with their bonus.

      5) In Cities like NY, Chicago and Los Angeles, the non-white population approaches or exceeds 50%. There is ample evidence to suggest that there is a hiring problem in the industry. Certainly the NYC Human Rights Commission believes so. Besides, this issue is a whole other subject and should not be debated here just because someone made an observation.

      6) As I stated, I don’t begrudge the Michael Roth’s and Myles Nadal’s anything. Most of these people work hard for their money. We all know that show business and athletes are way over paid. Neither of these things should take away from the fact that ad agencies are suffering while their owners thrive; gone are the days when owner/CEO's cut their salary to keep staff after a big account loss. The last person I know of to do this was Ed Meyer at Grey before it became part of WPP. It simply doesn’t happen anymore.

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