Gideon Spanier
May 31, 2024

Publicis wins vote for Arthur Sadoun to head single board after seeing off critics

Maurice Lévy says it was a “total absurdity” for proxy advisers to oppose Sadoun's combined role as chair and CEO on new unitary board.

Publicis: Arthur Sadoun and Maurice Lévy at the group's AGM
Publicis: Arthur Sadoun and Maurice Lévy at the group's AGM

Publicis Groupe shareholders have voted to back a move to a single board, with 95% approval at the annual general meeting (AGM) in Paris.

However, there was a minor rebellion on corporate governance grounds over the French agency group’s decision to put Arthur Sadoun in sole charge as chairman and chief executive.

Shareholders approved Sadoun's appointment to his new role as 77.6% of votes cast were in favour but 22.4% were against, plus there were some abstentions.

Even so, Publicis noted that all of the votes at the meeting were "overwhelmingly in favour".

It is understood a leading proxy advisory group, Institutional Shareholder Services (ISS), recommended investors did not back Sadoun's new role — despite Publicis out-performing rivals and its stock price smashing records in the last year.

Some corporate governance advisers insist on principle that the roles of chair and CEO should be kept separate.

Previously, Publicis had two boards: a supervisory board, chaired by Maurice Lévy; and a management board, chaired by Sadoun, who has been CEO since 2017.

Lévy hit out at unnamed "proxy advisers" in his address to the meeting, before the votes, and, after Publicis won, he described criticism of Sadoun's new role as "a total absurdity".

“Contrary to what some proxy advisers think — you know these specialists who advise investors and who have never managed a company in their life —well, the management of a company is not only carried out according to standards and rules, but above all according to ‘the H factor’, the human touch so essential in everything,” he told the AGM.

But Lévy said Publicis also listened to warnings about "the risks of a concentration of powers" on the new board and it has put safeguards in place to ensure an "exemplary balance of powers".

He cited the appointments of André Kudelski, the CEO of Kudelski Group, a Swiss technology company, as lead director, and Elisabeth Badinter, the daughter of Marcel Bleustein-Blanchet, the founder of Publicis, as vice-chair, and "reinforced" board sub-committees.

Moving to a unitary board will strengthen Publicis, according to Lévy, who said: "This is the right decision for our group, at the right time. I proposed this change in governance to ensure Publicis’ continued success, and to consolidate all of the elements that make it such an exceptional company, from its family-led roots, its values and its indomitable spirit."

One source suggested the protest vote was relatively minor because some shareholders appeared to have ignored the proxy advisers and backed Sadoun.

Lévy chairs his final AGM

More than 300 people attended the AGM, which was held in Publicis Cinemas, a complex which is located underneath the corporate headquarters on the Champs-Élysées.

There was a sustained round of applause for Lévy at the end of his address because he was chairing his final AGM after 37 years — 30 years as CEO and then seven years as chair of the supervisory board.

Lévy, who joined Publicis in 1971 and is aged 82, does not have a seat on the new board.

He will continue to attend board meetings as chairman emeritus, a new, unpaid role, and to support Sadoun, of whom he is “incredibly proud”.

Both Lévy and Sadoun said they want to continue to act as a "duo” and "in tandem”, albeit in a new way.

Publicis has only had three CEOs in its 98-year history. Bleustein-Blanchet led the group for 60 years, followed by Lévy for three decades and now Sadoun.

Sadoun will stay "hopefully for another decade or two" as CEO,  Lévy wrote in a message to shareholders ahead of the AGM.

In Sadoun’s presentation, one of his slides showed how Publicis’ organic revenue growth of 6.3% in 2023 was well ahead of rivals, with Omnicom growing 1.7% (based on an estimate by Barclays), WPP 0.9% and Interpublic declining 0.1%.

Under Sadoun's leadership, Publicis has grown to become the world's most valuable agency group, with a stock market valuation of €27bn (£23bn), despite WPP having larger annual revenues and staff numbers.

Publicis' net revenues were larger than those of WPP for the first time in Q1 2024, with the French agency group generating €3.2bn versus €3.1bn for its British rival, another slide from Sadoun showed.

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