GM pays $600k to an advertising agency where CFO’s wife works

Article by Christian Andrei, on May 28, 2012

General Motors Co., in its latest regulatory filing, indicated that Chief Financial Officer Dan Ammann’s wife Pernilla Ammann is an officer and a partner in an advertising agency that got around $600,000 for services in 2011 to a GM subsidiary. GM said that the transaction was "properly ratified" under the automaker’s policy that covers related-party transactions.

GM said that not all required procedures were followed. In an e-mail, GM spokesman Dave Roman said that being “properly ratified” means that the transaction has been approved by the CEO and general counsel and has been determined to be appropriate and in the company's interest.

He told the media that in this case, the ratification was made after the fact. Roman told the press that Pernilla Ammann is a partner at Mother New York, which had worked on a project related to the Chevrolet brand’s centennial. GM’s filing stated that this arrangement wasn't revealed in the original proxy material for GM's annual meeting on June 12.

GM said that it only knew about this relationship recently. Roman said that currently, this agency isn’t doing any work for the automaker yet.

Jon Swallen, head of research at Kantar Media, said that the automaker used up around $1.8 billion on advertising in the U.S. in 2011, falling behind just AT&T Inc. and Procter & Gamble Co.

There are changes being implemented at GM's marketing department as Chief Marketing Officer Joel Ewanick aims to raise efficiencies and work so that Chevrolet and Cadillac would become truly global brands. GM chose Aegis Group Plc's Carat as its agency for media planning and buying, as well as to the consolidated Chevrolet's ad business under one newly formed company, Commonwealth. Previously, Chevrolet had collaborated with 70 ad agencies throughout the globe.

Topics: gm, advertising

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