IPG’s Michael Roth: tie bonus structures to diversity outcomes

By Katie Deighton | Senior Reporter



IPG article

November 9, 2018 | 4 min read

Interpublic Group has been aligning diversity targets with financial benefits for its senior staff so that they take the business case for inclusivity seriously, its chief executive Michael Roth has revealed.

The company has made significant process to diversify its workforce on lines of gender and ethnicity, with women making up 43% of senior management in the US and people of color comprising 25% of the workforce. Speaking at the 3% Conference in Chicago, the New York-born chief said that while he believed the company looks “better than the rest of the industry”, it has begun comparing its figures to those of its clients – companies “who are doing a much better job”.

He added that its ethnic diversity figures are “significantly lower than other major organizations in the US” and has since begun to focus heavily on increasing representation for people of color.


Michael Roth spoke at the 3% Conference in Chicago

One way it is doing so is attaching diversity to senior leaders’ performance KPIs in a patent way.

“When you treat [diversity] as a business proposition you get a lot more attention,” he explained. “If you want to get someone's attention there's a formula – if they get X amount of dollars at the end of the year, and you cut that by, in some cases, a couple of hundred thousand dollars, you tell them you missed one of your objectives.”

The objective in question is improving the diversity of their team.

“That's how you hold people accountable,” said Roth.

Roth has also concentrated the company focus on assimilating minority staff members, especially when it comes to ethnicity. He noted: “We go and put people of color in the room, so the client thinks we have a diverse team, and then when they leave they're not really part of the team.”

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He has taken a two-pronged approach to retaining such talent: making time to sit down and talk with staff about their wider worries without tying the conversation to promotions, appraisals or pay rises, and laying out the company’s stance on global issues that border on the political.

The latter decision has seen Roth himself pen all-company notes on events such as the white supremacy rally in Charlottesville, Virginia and – most recently – the synagogue massacre in Pittsburgh, Pennsylvania.

“...these horrific events serve as a critical reminder that, despite the hatred that sadly exists in our world, our values should continue to inspire us and define us,” he wrote in a memo on 29 October.

Roth said he had been asked by his board if it was a chief executive’s role to take a stand “positions that might not be correct”.

“My answer was very clear – yes. We're a company that cares about other people and what bothers them is something we have to know about. Just by sending out notes about horrific events and talking about what we can do about it has changed the culture of our company.

“The personal response I get from letters makes it all worthwhile for me.”


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