Philippe Krakowsky
OMNICOM GROUPAbout Philippe Krakowsky
Philippe Krakowsky (age 61) is CEO of The Interpublic Group (IPG) since January 1, 2021 and a director at IPG; post-close of the Omnicom–IPG merger he will join Omnicom (OMC) as Co‑President and Co‑Chief Operating Officer and as a director, and will co‑chair Omnicom’s Management Integration Committee . He previously served as IPG’s COO (2019–2020), chaired IPG Mediabrands, led strategy, talent, communications and business development, and served as interim CEO of FCB, giving him deep operating and media leadership credentials . Company performance context: Omnicom delivered 2024 revenue of $15,689.1 million (+5.2% organic), EBITA margin 15.1%, ROE 37.9%, ROIC 24.9%, and diluted EPS $7.46; IPG’s 2023 organic revenue was down 0.1% and adjusted EBITA margin was 16.7% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| IPG | Chief Executive Officer; Director | CEO since 2021; Director since 2021 | Led group strategy and integration across media/data/technology; maintained strong pay-performance governance |
| IPG | Chief Operating Officer | 2019–2020 | Managed operations across IPG, chaired Mediabrands; oversight of independent agencies and data/tech (Acxiom, Kinesso, Matterkind) |
| IPG Mediabrands | Chair; CEO | Not disclosed | Led 10,500-person media investment unit, positioning IPG’s media network for growth |
| FCB (an IPG agency) | Interim CEO | Not disclosed | Steered agency operations during leadership transition |
| IPG Corporate | Chief Strategy & Talent Officer | 2011–2019 | Built strategy/talent capability; oversaw key corporate functions and growth initiatives |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| IPG | Director | Since 2021 | Management director (not independent) |
| Omnicom Group (post-close) | Director | Expected post-merger | One of three IPG-designated additions; subject to nomination and election processes |
| Omnicom Group (post-close) | Co‑President & Co‑COO; Co‑Chair, Management Integration Committee | Expected post-merger | Terms per Schedule 1.6(b) to merger agreement; focused on integration execution |
Fixed Compensation
IPG compensation history (calendar years):
| Metric (USD) | 2021 | 2022 | 2023 |
|---|---|---|---|
| Base Salary | $1,500,000 | $1,500,000 | $1,500,000 |
| Target Annual Incentive (% of salary) | 200% | 200% | 200% |
| Target Annual Incentive ($) | $3,000,000 | $3,000,000 | $3,000,000 |
| Long-Term Incentive Target ($) | $9,000,000 | $9,000,000 | $10,500,000 |
Total IPG pay outcomes:
| Component (USD) | 2021 | 2022 | 2023 |
|---|---|---|---|
| Salary | $1,500,000 | $1,500,000 | $1,500,000 |
| Bonus | $2,000,000 | $0 | $0 |
| Stock Awards (grant-date FV) | $6,295,623 | $5,726,089 | $6,663,055 |
| Option Awards (grant-date FV) | $985,000 | $0 | $0 |
| Non-Equity Incentive Comp | $6,404,500 | $5,801,165 | $6,055,600 |
| All Other Compensation | $186,524 | $182,188 | $184,010 |
| Total | $17,371,647 | $13,209,442 | $14,441,360 |
Performance Compensation
2023 IPG annual incentive design and outcome:
| Metric | Weight | Target | Actual | Multiplier/Rating | Notes |
|---|---|---|---|---|---|
| Organic Revenue Growth (%) | 30% | 3.0% | (0.1%) | Incorporated into corporate rating | Measures core growth excluding FX/M&A |
| OIBIA Margin (%) | 50% | 16.7% | 16.7% | Incorporated into corporate rating | Operating efficiency metric |
| High Priority Objectives (HPOs) | 20% | Qualitative/quantitative | Achieved; capped | 80% rating | Board capped HPO ratings at 80% given overall results |
| Corporate Financial Performance Rating | n/a | n/a | n/a | 50% | Committee determined 50% for corporate metrics |
| CEO Annual Incentive Earned (USD) | n/a | $3,000,000 | n/a | n/a | $1,680,600 payout |
2023 IPG ongoing LTI (granted Feb 2023; structure and vesting):
| Vehicle | Weight | Performance Metrics | Performance Period | Vesting | Target Value |
|---|---|---|---|---|---|
| Performance Shares | 1/3 | Cumulative OG 30%, OIBIA margin 70% | 2023–2025 | Vests Feb 27, 2026; 0–200% payout; no dividends | $3,500,000 (98,101 target shares) |
| Performance Cash | 1/3 | Cumulative OG 30%, OIBIA margin 70% | 2023–2024 | Earns end-2024; 1-yr service vest to Feb 27, 2026; 0–200% | $3,500,000 |
| RSUs | 1/3 | n/a | n/a | Time-based; vest on 3rd anniversary; dividend equivalents accrue | $3,500,000 (98,101 units) |
Performance LTI with periods ending 2023 (earned; paid later):
| Award | Target | Actual Earned | Notes |
|---|---|---|---|
| 2022–2023 Performance Cash | $3,000,000 | $2,742,000 | 91.4% performance: OG 3.5% vs 4.5% target; OIBIA 20.0% vs 21.0% target |
Equity Ownership & Alignment
- Stock ownership guidelines: CEO must hold ≥6x base salary; Krakowsky compliant as of Dec 31, 2023 .
- Hedging and pledging: Prohibited at both IPG and Omnicom; aligns with shareholder interests .
- 2023 vested equity (illustrative realized values): Performance shares vested (103,369 shares; $3,688,206); restricted stock vested (55,515 shares; $2,161,754 including dividends) .
- Omnicom merger equity treatment for IPG awards at closing:
- IPG stock options become Omnicom options (shares adjusted by 0.344 exchange ratio; strike adjusted) with original terms (including double-trigger) .
- IPG RSUs/PSUs convert into cash awards equal to FMV of underlying shares (PSUs at target unless performance period ended; retain service/double-trigger protections; performance conditions removed for PSUs) .
- IPG RSAs convert into Omnicom restricted stock (adjusted by exchange ratio; original terms retained) .
Employment Terms
| Provision | Detail |
|---|---|
| Employment Agreement (IPG) | Salary $1.5m; target bonus 200%; LTI target $10.5m (2023); eligibility for LTI; CAP participation; confidentiality; post-termination non-solicit of employees/clients |
| Severance (IPG ESP) | If involuntary termination without cause: 24 months salary continuation; eligibility for annual bonus consideration; continued vesting of equity/cash LTI during severance; medical/dental/vision subsidy; 401(k) match cash equivalent; life insurance premium cash (12 months) |
| Change-of-Control (IPG) | Double-trigger; lump-sum severance = 2.5×(base + target bonus) = $11.25m; medical/dental/vision subsidy for severance months; CAP enhancements; LTI acceleration (restricted stock; performance shares and performance cash at target; valued at CoC date) |
| Clawbacks | IPG adopted “no-fault” clawback policy effective for compensation from Oct 1, 2023; recovery of erroneously awarded incentive comp after restatements; Omnicom maintains clawback in compliance with SEC/NYSE rules |
| Tax gross-ups | None; payments may be reduced to avoid 280G excise taxes; no company-paid gross-ups |
| Pension/SERP | ESBA: $245,000 per year for 15 years upon retirement/resignation/Qualifying Termination after age 60; lump sum present value if CoC termination |
Estimated IPG termination values at Dec 31, 2023 (illustrative):
| Scenario | Severance | Bonus | LTI (Perf Shares) | LTI (Perf Cash) | Restricted Stock | Benefits (Med/Dental/Vision) | 401(k) Match | CAP Increment |
|---|---|---|---|---|---|---|---|---|
| Qualifying Termination (no CoC) | $3,000,000 | $3,000,000 | $7,647,072 | $6,897,640 | $7,946,557 | $66,580 | $29,700 | $443,560 |
| Qualifying Termination after CoC | $11,250,000 | $3,000,000 | $8,616,503 | $8,687,500 | $11,362,081 | $82,134 | $37,125 | $485,940 |
Board Governance
- IPG Board: Krakowsky is one of 10 directors (9 independent; CEO as management director); independent Chair; standing committees are fully independent; multiple executive sessions; strong governance framework .
- Omnicom Board structure: Combined Chairman & CEO (John Wren) with robust Lead Independent Director role (presides over executive sessions, oversees evaluations, leads director recruitment, coordinates committee work); all four standing committees are independent; executive sessions held regularly; strong equity ownership requirements .
- Dual-role implications at Omnicom: Krakowsky will be an executive director (not independent) while serving as Co‑President & Co‑COO; independence concerns are mitigated by Omnicom’s Lead Independent Director authorities and fully independent committees .
Director Compensation (frameworks)
- IPG: Non‑management director annual restricted share grants and cash retainers; Krakowsky, as an employee director, did not receive director fees (his compensation appears in executive tables) .
- Omnicom: Non‑employee directors receive quarterly fully‑vested stock and cash retainers (2024: $90,000 cash; $43,750 per quarter stock; effective 2025 increased to $51,250 per quarter); Lead Independent Director and committee chairs receive additional fees; employee directors receive no director compensation .
Say‑on‑Pay & Shareholder Feedback
- IPG: 2023 say‑on‑pay support 93.9%; Board emphasizes performance linkage and majority at‑risk pay .
- Omnicom: “Over 90%” support in 2024; shareholder engagement emphasizes compensation design and board leadership structure .
Compensation Structure Analysis
- Mix and risk: Heavy shift to performance equity/cash (two‑thirds of LTI in performance vehicles) with capped payouts (200% max), clawbacks, and hedging/pledging bans — indicators of disciplined pay‑for‑performance .
- Metric rigor: Annual bonuses tied 50% to margin and 30% to organic growth; HPOs capped at 80% in 2023 due to revenue shortfall, showing downward discretion .
- Change‑in‑control protections: Double‑trigger with 2.5x cash multiple; LTI accelerates at target on CoC termination — standard market level, with no excise tax gross‑ups .
- Equity conversion on merger: Clear option and award treatment; RSUs/PSUs become cash — could create vesting‑related cash flows but remain subject to service/double‑trigger terms, moderating immediate sell pressure .
Risk Indicators & Red Flags
- Hedging/pledging: Prohibited (good governance) .
- Option repricing: Prohibited without shareholder approval (good governance) .
- Tax gross‑ups: None on CoC (shareholder friendly) .
- Related party transactions: None material disclosed at IPG; Omnicom disclosed one family employment relationship (not directly related to Krakowsky) .
- Board independence/leadership: Omnicom’s combined CEO/Chair structure offset by robust Lead Independent Director and independent committees; Krakowsky’s executive director status warrants ongoing oversight (mitigations in place) .
Expertise & Qualifications
- Operating breadth across media, data, technology platforms (Mediabrands; oversight of Acxiom, Kinesso, Matterkind) and agency leadership (FCB) .
- Strategy and talent leadership at IPG (Chief Strategy & Talent Officer) .
- Governance and shareholder engagement under independent Chair structures at IPG; strong alignment with modern compensation governance .
Investment Implications
- Alignment: High at‑risk pay mix, robust clawbacks, no hedging/pledging, and metric‑driven bonuses suggest strong alignment with performance outcomes and disciplined capital allocation — supportive of long‑term value creation .
- Retention/transition risk: Double‑trigger CoC protections (2.5x cash, LTI acceleration at target) ensure stability through integration; clear merger equity treatment minimizes uncertainty and supports integration leadership incentives .
- Execution signal: Omnicom’s 2024 operational strength (organic growth +5.2%, ROE 37.9%) combined with Krakowsky’s media/data integration background and planned Co‑President/Co‑COO role may accelerate synergy realization and platform integration; governance mitigants address dual‑role independence concerns .