Publicis boss exit plan is bad ad for succession

By Jennifer Saba

NEW YORK (Reuters Breakingviews) - Maurice Levy is finally stepping back – sort of. The longtime chief executive and chairman of Publicis is vacating the advertising giant's executive corner office at the end of May. But he probably won't be going far. The US$16-billion French advertising firm has nominated him to become chairman of its supervisory board. The continuing presence of Levy, in charge for 30 years and proven to be a reluctant ex-boss, risks clipping the wings of the new leader, Arthur Sadoun.

The 74-year-old Levy is an advertising legend. Since 1987 when he was appointed CEO, Publicis shareholders received an average total return of 14 per cent each year, according to Thomson Reuters data. He is a rare outspoken executive and a verbal sparring partner of cross-Channel rival Martin Sorrell, the WPP boss who matches Levy's tenure, disinclination to leave and bravado.

It's true that Levy's service has been far shorter than his predecessor's: Publicis founder Marcel Bleustein-Blanchet led the company for some 60 years. But the question of succession has been simmering for years. The board kept him in place in 2014 after Publicis failed to seal a $35 billion tie-up with U.S.-based Omnicom. Levy would have eventually transitioned from co-CEO to chairman of the merged company, but the plan fell apart amidst bickering over who would fill key positions.

Then his planned retirement was pushed back from the end of 2015 – and not for the first time. Now it looks as if he is finally handing the reins to Sadoun, one of the potential heirs Publicis had previously identified.

But keeping Levy in charge of the supervisory board, which oversees the executive board and managers, is at best a mixed blessing. Elisabeth Badinter, the current supervisory board chairman, put it positively, suggesting it's valuable to have the outgoing boss on hand to offer Sadoun "guidance and recommendations." Levy's tenure, record and style suggest backseat driving is the more likely result.

The world's advertising firms are facing wrenching changes. Facebook, Alphabet's Google and electronic exchanges are putting pressure on the business model and Publicis, for one, has lost prestigious business from the likes of Procter & Gamble and Coke. The new CEO needs the freedom to do some unfettered fresh thinking.