Finance director Andy Boland is also on a similar deal, and both are in line for a bonus of up to a year's salary based on the proceeds of either disposals or a takeover of the group.
According to the Financial Times, the details of the contracts emerged while due diligence was being conducted. Hearn's salary is 拢550,000, while Boland earns 拢250,000 annually.
So far, three companies -- WPP Group, Publicis Groupe and now Grey Global -- have shown an interest in buying Cordiant and are expected to decide on whether or not to bid by the end of the week. Cordiant's share price remained at 6p this morning, after rising by 0.5p yesterday, an increase of 9%.
Hearn was initially brought in by Cordiant to run advertising network Bates Worldwide and try to stem the flow of client losses, which started with the important Hyundai creative and media in the US in 2001, leading to a financial crisis at the company.
He was promoted to chief executive of Cordiant, taking over from Michael Bungey at the beginning of the year. However, his original mission -- to improve the global business of Bates -- has not been a success and the agency has lost more clients, including the global Allied Domecq account, which sparked off a share-slide, precipitating the current crises.
Cordiant has been undertaking a disposal programme as it tries to deal with 拢250m in debt, which it has until July 15 to sort out. Last week, it announced the sale of 70% of its Australian assets, including a stake in the leading agency George Patterson Bates, for 拢24.6m. It is also looking to sell the financial PR agency Financial Dynamics and the European ad network Scholz & Friends, based in Germany.
According to the Financial Times, the date that the bonus agreements were added to Hearn and Boland's contracts could be crucial, as the Takeover Code requires any alterations made to contracts during a bid situation to be approved by shareholders.
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