GENERAL INFORMATION

The Board of Directors of The Interpublic Group of Companies, Inc. (“Interpublic”, “IPG”, the “Company”, “us”, “we” or “our”) is providing this Proxy Statement in connection with the Annual Meeting of Shareholders, which will be held in the McGraw Hill Building, 1221 Avenue of the Americas, New York, New York, at 9:30 A.M., Eastern Time, on Thursday, May 26, 2011.

Interpublic’s principal executive office is located at 1114 Avenue of the Americas, New York, NY 10036. The Proxy materials are first being sent to shareholders beginning on or about April  20, 2011.

VOTING

Who Can Vote?

You are entitled to vote or direct the voting of your shares of Interpublic common stock (the “Common Stock”) if you were a shareholder on April 4, 2011, the record date for the Annual Meeting. On April 4, 2011, approximately 489,514,139 shares of Common Stock were outstanding.

Who is the Holder of Record?

You may own your shares of Common Stock either

(1) directly registered in your name at our transfer agent, BNY Mellon; or (2) indirectly through a broker, bank or other intermediary.

If your shares are registered directly in your name, you are the Holder of Record of these shares, and we are sending these proxy materials directly to you. If you hold shares indirectly through a broker, bank or other intermediary, these materials are being sent to you by or on behalf of that entity.

How Do I Vote?

Your vote is important. We encourage you to vote promptly. You may vote in any one of the following ways:

How Many Shares Must Be Present to Hold the Annual Meeting?

A quorum is required to transact business at the Annual Meeting. We will have a quorum at the Annual Meeting if the holders of more than 50% of the outstanding shares of Common Stock entitled to vote are present at the meeting, either in person or by proxy.

How Are Votes Counted?

All shares that are the subject of a valid proxy will be voted at the Annual Meeting in accordance with your instructions. If you sign and return your proxy card but do not specify how you wish your shares to be voted, your shares will be voted in accordance with the following Board of Directors recommendations:

A New York Stock Exchange (“NYSE”) member broker that holds shares for a customer in street name has the authority to vote on certain items without instructions from the customer. Of the matters being submitted to a vote of shareholders at the Annual Meeting, NYSE rules permit member brokers to vote only on the proposal to ratify the

appointment of our independent auditor without instruction. On each of the other matters, NYSE members may not vote without customer instruction. A notation by a broker on a retuned proxy that it is not permitted to vote on particular matters due to the NYSE rules is referred to as a “broker non-vote.”

Abstentions and broker non-votes are each tabulated separately and are counted as shares present for the purpose of determining whether there is a quorum present for the conduct of business at the Annual Meeting. For Items 2, 3 and 5, shares that are the subject of an abstention are included as shares entitled to vote on the matter and, therefore, have the same effect as a vote against the matter, and shares, if any, that are the subject of a broker non-vote are not included as shares entitled to vote on that matter.

What Vote is Required to Approve Each Proposal?

Our by-laws provide for majority voting for the election of Directors, which means, a Director will be elected only if a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the matter are cast “for” that Director.

If an incumbent Director fails to receive the necessary vote “for” his or her election, that Director is required to resign from the Board no later than 120 days after the date of the certification of the election results.

Approval of proposals 2, 3 and 5, requires an affirmative vote of the holders of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the matter. For proposal 4, the option receiving the greatest number of votes will be considered the frequency recommended by the Company’s shareholders.

How Can I Revoke My Proxy or Change My Vote?

You can revoke your proxy or change your vote by:

Who Will Count the Vote?

The Board of Directors has appointed BNY Mellon Investor Services, Inc. to act as Inspector of Election at the 2011 Annual Meeting.

Who is the Proxy Solicitor?

D.F. King & Co., Inc. has been retained by Interpublic to assist with the Annual Meeting, including the

distribution of proxy materials and solicitation of votes, for a fee of $15,000, plus reimbursement of expenses to be paid by Interpublic. In addition, our Directors, officers or employees may solicit proxies for us in person or by telephone, facsimile, Internet or other electronic means for which they will not receive any additional compensation. Banks, brokers and others holding stock in their names or in the names of other intermediaries for the account of their customers will be reimbursed by Interpublic for out-of-pocket expenses incurred in sending proxy material to the beneficial owners of such shares.

Shareholder Proposals to Be Presented at 2012 Annual Meeting

Proposals of shareholders intended to be presented at the Annual Meeting of Shareholders scheduled to be held on May 24, 2012, must be received by Interpublic by December 29, 2011, and must comply with applicable Securities and Exchange Commission (“SEC”) regulations, in order to be considered for inclusion in Interpublic’s Proxy Statement and form of proxy relating to that meeting. If notice of a proposal that a shareholder intends to introduce at the 2012 Annual Meeting is not received by Interpublic before March 20, 2012, the representatives of Interpublic named as proxies for the 2012 meeting will have the discretionary authority to vote on the matter in accordance with their best judgment without disclosure by Interpublic in the Proxy Statement of such matter or of how the proxy holders intend to exercise their discretionary authority to vote on the matter.

At the Annual Meeting, nine Directors are to be elected for a one-year term to hold office until the Annual Meeting of Shareholders to be held in 2012 and until their successors are duly elected or appointed or until their earlier death, resignation or removal.

Unless authority is withheld by the shareholder, it is the intention of persons named by Interpublic as proxies on the proxy card to vote “for” the nominees identified in this Proxy Statement or, in the event that any of the nominees is unable or decline to serve (an event not now anticipated), to vote “for” the balance of the nominees and “for” any replacement nominee designated by the Board of Directors.

Each of the nominees is currently a Director, and each has been recommended for re-election to the Board of Directors by the Corporate Governance Committee and approved and nominated for re-election by the Board of Directors.

The Board of Directors recommends that shareholders vote “FOR” each of the nominees.

Nominees for Director

The following information on each Director nominee is as of March 15, 2011, and has been provided or confirmed to Interpublic by the nominee.

REGINALD K. BRACK is the Former Chairman and Chief Executive Officer of Time, Inc. (“Time”). From September 1994 to June 1997, Mr. Brack was Chairman of Time and was its Chairman, President and Chief Executive Officer from December 1986

until August 1994. Mr. Brack was inducted into the Advertising Hall of Fame in March 2001.

Qualifications: Mr. Brack serves on several private boards and is a founder and director of Fieldpoint Private Bank & Trust. Mr. Brack’s experience as Chief Executive Officer at Time Inc, his previous role as Time’s worldwide director of advertising and his former chairmanships of the Magazine Publishers of America and the Advertising Council, which he continues to serve as a director, provides the Board an important source of knowledge and expertise in the media and advertising field.

JOCELYN CARTER-MILLER is President of TechEdVentures, Inc. a firm that develops and manages charter schools and community-based programs. Ms. Carter-Miller was Executive Vice President and Chief Marketing Officer of Office Depot, Inc. from February 2002 until March 2004. Prior to that time, Ms. Carter-Miller was Corporate Vice President and Chief Marketing Officer of Motorola, Inc. from February 1999 until February 2002. Ms. Carter-Miller is also a former board member of the Association of National Advertisers.

Qualifications: Ms. Carter-Miller provides the Board with an important perspective in the marketing field, which is a critical component of Interpublic’s business, based on her extensive executive and marketing experience acquired during her time at Motorola, where she served as its Chief Marketing Officer and more recently as Executive Vice President and Chief Marketing Officer of Office Depot, Inc. Her current work as President of TechEdVentures provides the Board with a meaningful voice in keeping Interpublic focused on its corporate social responsibilities.

JILL M. CONSIDINE is the Chairman of Butterfield Fulcrum Group, Limited, a global provider of fund administration to hedge funds and alternative investments. She was appointed as one of three trustees for the AIG Credit Facility Trust in January, 2009. Previously, Ms. Considine served as senior advisor of The Depository Trust & Clearing Corporation and its subsidiaries (securities depository and clearing house) from August 2007 to May 2008, after having served as chairman since August 2006, and as both chairman and chief executive officer from January 1998 to August 2006. Prior to joining The Depository Trust Company, She served from 1993 to 1998 as president of the New York Clearing House Association, LLC. From 1991 to 1993 she served as a managing director, chief administrative officer, and member of the board of directors of American Express Bank Ltd. Prior to that, Ms. Considine served as the New York State Superintendent of Banks from 1985 to 1991.

Qualifications: Ms. Considine recently completed a six-year term as a member of the board of the Federal Reserve Bank of New York Ms. Considine’s history in the financial industry, from serving as the New York State Superintendent of Banks to her current role as Chairman of Butterfield Fulcrum Group Limited, contributes to the financial expertise of the Board. Her knowledge and experience in financial, credit and liquidity matters provides a valuable perspective beneficial to the Board in its overall assessment and management of Interpublic’s credit and liquidity positions and overall assessment of industry and operational risks.

RICHARD A. GOLDSTEIN retired as Chairman and Chief Executive Officer of International Flavors & Fragrances Inc. (IFF) in May 2006 after serving in that position for six years. Prior to his six years leading IFF, Mr. Goldstein served for 25 years in key executive positions at Unilever, including as Business Group President of Unilever North American Foods from 1996 to June 2000 and as President and Chief Executive Officer of Unilever United States, Inc. from 1989 to June 2000.

Qualifications: Mr. Goldstein brings to the Board his leadership and experience as a former Chairman and Chief Executive Officer, which is critical in his role as Presiding Director. His time as chief executive officer of IFF and Unilever United States as well as his directorships at other public companies, allows him to offer a broad perspective on corporate governance and financial control matters.

H. JOHN GREENIAUS has been President of G-Force, Inc. since 1998. He was Chairman and Chief Executive Officer of Nabisco, Inc. from 1993 through 1997. Prior to 1993, Mr. Greeniaus held various marketing and general management positions

in the U.S., Canada, and the U.K. with Nabisco, PepsiCo, J. Walter Thompson and Procter & Gamble.

Qualifications: Mr. Greeniaus provides insight into the challenges and issues facing a global enterprise from his experience as the former Chairman and Chief Executive Officer of Nabisco, as well as other previous management roles at PepsiCo, J. Walter Thompson and Procter & Gamble. Mr. Greeniaus’ current role as President of G-Force, a financial services company, allows the Board to benefit from his general knowledge of financial issues relevant in today’s marketplace.

MARY J. STEELE GUILFOILE is currently Chairman of MG Advisors, Inc., a privately owned financial services merger and acquisitions advisory and consulting firm. From 2000 to 2002, Ms. Guilfoile was Executive Vice President and Corporate Treasurer at JPMorgan Chase & Co. and also served as Chief Administrative Officer of its investment bank. Ms. Guilfoile was Partner, CFO and COO of The Beacon Group, LLC, a private equity, strategic advisory and wealth management partnership, from 1996 through 2000. Ms. Guilfoile continues as a Partner of The Beacon Group, LP, a private investment group.

Qualifications: Ms Guilfoile’s knowledge and expertise as a financial industry executive and her training as a certified public accountant contributes an important perspective to the Board. Ms. Guilfoile’s tenure at JP Morgan Chase, and its predecessor companies, serving as Corporate Treasurer, Chief Administrative

Officer for its investment bank, and in various merger integration, executive management and strategic planning positions, as well as her current role as Chairman of MG Advisors, Inc., brings to the Board someone with valuable experience and expertise in corporate governance, risk management, accounting and auditing matters.

WILLIAM T. KERR is currently President and Chief Executive Officer of Arbitron Inc., a media and marketing research firm. He was Chairman and Chief Executive Officer of Meredith Corporation from 1998 to 2006. He was President and Chief Executive Officer of Meredith Corporation from 1997 to 1998. Mr. Kerr served as President and Chief Operating Officer for Meredith Corporation from 1994 through 1997 and as Executive Vice President of Meredith Corporation and President of its Magazine Group from 1991 through 1994. Prior to that time, Mr. Kerr served as Vice President of The New York Times Company and President of its magazine group, a position he held since 1984.

Qualifications: Mr. Kerr’s general business background and knowledge in the fields of marketing research and media make a valuable contribution to the Board. Serving as Chief Executive Officer and a member of the board of Arbitron, as well as his previous executive experience at Meredith Corporation, a diversified media company, Mr. Kerr provides to the Board the perspective and insights of an organizational leader confronting issues similar to those faced by Interpublic.

MICHAEL I. ROTH became Chairman of the Board and Chief Executive Officer of Interpublic, effective January 19, 2005. Prior to that time Mr. Roth served as Chairman of the Board of Interpublic from July 13, 2004 to January 2005 and has been a director of Interpublic since 2002. Mr. Roth served as Chairman and Chief Executive Officer of The MONY Group Inc. from February 1994 to June 2004.

Qualifications: Mr. Roth’s leadership and perspective as Interpublic’s Chief Executive Officer gives him an intimate knowledge of the Company’s operations and his role as Chairman of the Board is aided by his successful tenure as Chairman and Chief Executive Officer of The MONY Group. Mr. Roth’s other current directorships, and his accounting, tax and legal background, as a certified public accountant and holding an L.L.M. degree from New York University Law School, also adds significant value to his overall contributions as a member of the Board and in his role as Chairman.

DAVID M. THOMAS retired as executive chairman of IMS Health Inc. (“IMS”) in March 2006, after serving in that position since January 2005. From November 2000 until January 2005, Mr. Thomas served as Chairman and Chief Executive Officer of IMS. Prior to joining IMS, Mr. Thomas was Senior Vice President and Group Executive of IBM from January 1998 to July 2000. Mr. Thomas also serves on the Board of Trustees of Fidelity Investments.

Qualifications: Mr. Thomas’ experience as a Chief Executive Officer and overall management experience at premiere global technology companies provides a vital perspective for the Board as it addresses the rapidly changing and growing landscape in advertising and marketing. Mr. Thomas also provides the Board with a great deal of insight and perspective in the healthcare advertising field having served as Chairman and Chief Executive Officer of IMS.

The Audit Committee has appointed PricewaterhouseCoopers LLP (“PricewaterhouseCoopers”) as Interpublic’s independent registered public accounting firm for 2011. This firm has been Interpublic’s independent auditors since 1952. PricewaterhouseCoopers has advised Interpublic that it is an independent registered public accounting firm with respect to Interpublic and its subsidiaries within the meaning of the rules and regulations of the SEC.

We are not required to have the shareholders ratify the selection of PricewaterhouseCoopers as our independent auditor for 2011. We nonetheless are doing so because we believe it is a matter of sound corporate practice. If shareholders do not confirm the appointment of PricewaterhouseCoopers, the Board of Directors will consider it a direction to consider selecting another auditing firm for 2011. However, even if you confirm the appointment, the Board of Directors may still appoint a new independent registered public accounting firm at any time during 2011 if it believes that such a change would be in the best interests of Interpublic and its shareholders.

A representative of PricewaterhouseCoopers is expected to be present at the Annual Meeting and will have the opportunity to make a statement and to respond to appropriate questions.

Fees Paid to PricewaterhouseCoopers

The following is a summary and description of the fees for services provided by PricewaterhouseCoopers in 2009 and 2010.

Worldwide Fees (in Millions)

(A) Audit Fees: Consists of fees and out-of-pocket expenses billed for professional services rendered for the audit of Interpublic’s consolidated financial statements and the audit of the effectiveness of Interpublic’s internal control over financial reporting, for review of the interim consolidated financial statements included in quarterly reports and for services that are normally provided by PricewaterhouseCoopers in connection with statutory and regulatory filings or engagements, attest services, except those not required by statute or regulation.

(B) Audit Related Fees: Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of Interpublic’s consolidated financial statements and are not reported under “Audit Fees.” These services include employee benefit plan audits, compliance audits and reviews, attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards.

(C) Tax Fees: Consists of tax compliance/preparation and other tax services. Tax compliance/preparation includes fees billed for professional services related to federal, state and international tax compliance, assistance with tax audits and appeals, assistance with custom and duties audits, expatriate tax services and assistance related to the impact of mergers, acquisitions and divestitures on tax return preparation. Other tax services include miscellaneous tax consulting and planning.

(D) All Other Fees: Consists of the performance of studies related to information technology and human resources.

Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

The Audit Committee approves all audit and permissible non-audit services provided by the independent auditors. The permissible non-audit services may include audit-related services, tax-related services and all other services. The Audit

Committee has adopted a policy for the pre-approval of services provided by the independent auditors. Under the policy, pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is subject to a specific budget. In addition, the Audit Committee may pre-approve particular services on a case-by-case basis. The Audit Committee has delegated pre-approval authority to its Chairman for

projects less than $100,000, who must report any decision to the Audit Committee at the next scheduled meeting.

The Board of Directors recommends a vote “FOR” the confirmation of the appointment of PricewaterhouseCoopers as Interpublic’s independent registered public accounting firm for 2011 .

AUDIT COMMITTEE REPORT

Six non-management Directors comprise the Audit Committee. The Committee operates under a written charter adopted by the Board. The Board has determined that each member of the Committee is independent and financially literate under the listing standards of the NYSE and satisfies the financial expertise requirements of the NYSE. The Board has determined that each member of the Audit Committee has the requisite experience to be designated an audit committee financial expert as that term is defined by rules of the SEC.

In accordance with its written charter, the primary function of the Audit Committee is to assist the Board of Directors in its oversight of Interpublic’s financial reporting process.

Management is responsible for Interpublic’s consolidated financial statements and overall reporting process, including the system of internal controls. PricewaterhouseCoopers, Interpublic’s independent registered public accounting firm, is responsible for conducting annual audits and quarterly reviews of Interpublic’s consolidated financial statements and expressing opinions as to the conformity of the annual consolidated financial statements with generally accepted accounting principles.

In performing its oversight function for the year ended December 31, 2010, the Audit Committee has:

In accordance with a requirement under the federal securities laws, enacted as part of the recent Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), we are submitting to an advisory vote of shareholders the compensation of our named executive officers as disclosed in the Compensation Discussion and Analysis, the compensation tables, and the narrative discussion set forth on pages 26 to 64 of this Proxy Statement. In addition to complying with the requirements of the Dodd-Frank Act, the Board recognizes that providing stockholders with an advisory vote on named executive officer compensation may produce useful information on investor sentiment with regard to the Company’s executive compensation programs.

As described in Compensation Discussion and Analysis, our compensation principles and underlying programs, as designed and administered by the Compensation Committee, are designed to provide a competitive level of compensation necessary to attract, motivate and retain talented and experienced executives who are crucial to our long-term success. The compensation paid to our named executive officers reflects our commitment to pay for performance. The compensation paid to our named executive officers includes long-term cash and equity awards that are designed to incentivize management to achieve results to the mutual benefit of shareholders and management. Moreover, a significant portion of our named executive officers’ annual cash compensation is paid in the form of annual performance-based incentives, which are contingent on the Company’s achievement of pre-defined performance measures.

We encourage you to carefully review the Compensation Discussion and Analysis beginning on page 26 of this Proxy Statement for additional

details on Interpublic’s executive compensation, including Interpublic’s compensation philosophy and objectives, as well as the processes our Compensation Committee used to determine the structure and amounts of the compensation of our named executive officers in fiscal 2010. The Compensation Committee and the Board believe that these policies and procedures are effective in implementing our compensation philosophy and in achieving its goals.

We are asking you to indicate your support for the compensation of our named executive officers as described in this Proxy Statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we are asking you to vote, on an advisory basis, “For” the following resolution at the Annual Meeting:

“RESOLVED, that the compensation paid to the named executive officers of The Interpublic Group of Companies, Inc., as described in the Compensation Discussion and Analysis, compensation tables and narrative discussion set forth on pages 26 to 64 of this Proxy Statement, is hereby approved.”

While the results of this advisory vote are not binding, the Compensation Committee will consider the outcome of the vote in deciding whether to take any action as a result of the vote and when making future compensation decisions for named executive officers.

The Board of Directors recommends that you vote “FOR” the resolution approving the compensation of our named executive officers as disclosed in this Proxy Statement.

The federal securities laws as amended by the Dodd-Frank Act also require us, at least once every six years, to hold an advisory shareholder vote on the frequency with which Interpublic should submit the compensation of the named executive officers to an advisory vote of shareholders. Shareholders may choose among three options: (1) a vote every year (annual), (2) a vote every two years (biennial), or (3) a vote every three years (triennial).

The Board believes that this “say-on-pay” vote should be conducted every one year so that shareholders may annually express their views on Interpublic’s named executive officer compensation programs. The Compensation Committee, which administers Interpublic’s executive compensation programs, values the opinions expressed by shareholders in these votes and will consider the outcome of these votes in making its decisions on executive compensation.

Effect of Proposal

The Board values the opinions of Interpublic’s shareholders as expressed through their votes and other communications. Although the resolution is non-binding, the Board will carefully consider the outcome of the frequency vote and other communications from shareholders when making future decisions regarding the frequency of the say-on-pay vote.

Vote Required

The option receiving the greatest number of votes will be considered the frequency recommended by the Company’s shareholders.

The Board of Directors of the Company recommends that shareholders vote in favor of an annual advisory vote on the compensation of the Company’s named executive officers.

Interpublic is advised that a shareholder intends to present the proposal set forth below for consideration and action by shareholders at the Annual Meeting. Interpublic will promptly furnish to any shareholder who submits a request either orally or in writing, the name, address and number of shares of Common Stock the shareholder submitting this proposal has stated that he owns. The text of the shareholder’s proposal and supporting statement is as follows:

Text of Shareholder Proposal

RESOLVED, shareowners ask our board to take the steps necessary unilaterally (to the fullest extent permitted by law) to amend our bylaws and each appropriate governing document to give holders of 15% of our outstanding common stock (or the lowest percentage permitted by law above 15%) the power to call a special shareowner meeting.

This includes that such bylaw and/or charter text will not have any exception or exclusion conditions (to the fullest extent permitted by law) in regard to calling a special meeting that apply only to shareowners but not to management and/or the board.

Supporting Statement

Special meetings allow shareowners to vote on important matters, such as electing new directors that can arise between annual meetings. If shareowners cannot call special meetings, management may become insulated and investor returns may suffer. Shareowner input on the timing of shareowner meetings is especially important during a major restructuring – when events unfold quickly and issues may become moot by the next annual meeting. This proposal does not impact our board’s current power to call a special meeting.

This proposal topic won more than 60% support at the following companies: CVS Caremark (CVS), Sprint Nextel (S), Safeway (SWY), Motorola (MOT) and R.R. Donnelley (RRD).

The merit of this Special Shareowner Meeting proposal should also be considered in the context of the need for additional improvement in our company’s 2010 reported corporate governance status:

Instead of publishing the submitted 2010 rule 14a-8 proposal on this topic our management published a short, chopped-up and paraphrased version of the proposal. This was without the required authorization of the Securities and Exchange Commission. I believe management’s motivation for this stunt was to skew the high level of support for this topic. I believe the 2010 support for this proposal topic would have been significantly higher had our management followed the rules and published the 2010 proposal as submitted which is required by the Securities and Exchange Commission.

Please encourage our board to respond positively to this proposal: Special Shareholder Meetings - Yes on 5

Interpublic’s Statement in Opposition

The Board of Directors recommends that shareholders vote AGAINST this proposal for the following reasons:

Special Meetings – After careful consideration, the Board of Directors amended Interpublic’s by-laws in 2008 to provide that shareholders representing 25% of the outstanding common stock may call a special meeting of shareholders, lowering the requirement from 50%. This change increases shareholders access and ability to call a special meeting.

As amended, our by-laws provide that a special meeting of shareholders may be called at any time by the Board, and must be called by the Chairman of the Board, a Co-Chairman of the Board or the Secretary of Interpublic upon the written request of either (i) a majority of the Board of Directors or (ii) the holders of not less than 25% of the outstanding Common Stock. This by-law provision is consistent with the Delaware Corporation Law.

A special meeting of shareholders is not a matter to be taken lightly, and should be limited to extraordinary events, where either fiduciary obligations or strategic concerns require that the matters to be addressed cannot wait until the next annual meeting. Depending on the circumstances, the prospect of a special meeting of shareholders may pose a significant threat of business disruption for our company, distraction for our employees, and put us at a competitive disadvantage as our clients and potential clients contend with the uncertainty of a pending meeting. We believe that in setting the vote threshold at 25%, the Board has effectively balanced the rights and prerogatives of ownership with prudent concern about potential misuse. Even at 25%, as few as four of our current institutional owners acting in concert may convene a special meeting.

Furthermore, for a company with as many shareholders as Interpublic, a special meeting of shareholders is very expensive and time-consuming because of the legal costs in preparing required disclosure documents, printing and mailing costs, and the time commitment required of the Board and members of senior management to prepare for and conduct the meeting.

Current Shareholder Access - As set forth on pages 3 and 17, shareholders have the ability to present proposals at the Annual Meeting and make director nominations, in accordance with the by-laws and have the ability to submit proposals for inclusion in the Proxy Statement in accordance with the procedures set forth in the SEC rules. Shareholders also have the ability to recommend director nominees to the Corporate Governance Committee of the Board and to communicate concerns to the Board outside of the framework of the Annual Meeting. (See “Communications with the Board of Directors and Non-Management Directors” on page 17.)

Directors’ Business Judgment – The current by-law provision is an appropriate corporate governance provision for a public company of our size because it allows the directors, according to their fiduciary obligations, to exercise their business judgment to determine when it is in the best interests of shareholders to convene a special meeting.

The Board of Directors recommends a vote “AGAINST” this proposal

Corporate Governance Guidelines

Interpublic has a strong commitment to maintaining sound corporate governance practices. Interpublic’s Corporate Governance Guidelines are available free of charge on Interpublic’s website at http://www.interpublic.com or by writing to The Interpublic Group of Companies, Inc., 1114 Avenue of the Americas, New York, NY 10036, Attention: Secretary.

Director Independence

In accordance with NYSE listing standards (the “NYSE Listing Standards”), the Board annually evaluates the independence of each member of the Board of Directors under the independence standards set forth in Interpublic’s Corporate Governance Guidelines, and under the NYSE Listing Standards. Interpublic’s Director Independence Standards are included in Interpublic’s “Corporate Governance Guidelines” available at the website noted above.

Interpublic has nine directors, one of whom, Michael I. Roth, is an employee of Interpublic (referred to in this Proxy Statement as the “Management Director”) and eight of whom are not employees of Interpublic or its subsidiaries (those non-employee directors are referred to in this Proxy Statement as “Non-Management Directors”). Of the eight Non-Management Directors, the Corporate Governance Committee determined at its meeting held on February 24, 2011, that Mss. Carter-Miller, Considine and Guilfoile and Messrs. Brack, Goldstein, Greeniaus, Kerr and Thomas are each independent directors under Interpublic’s Corporate Governance Guidelines and the NYSE Listing Standards. Frank J. Mr. Borelli, who was a director at the beginning of 2010, but who did not stand for reelection at the 2010 Annual Meeting, did not qualify as an independent director under the Corporate Governance Guidelines because his son is a principal of the accounting firm Deloitte & Touche, which Interpublic has engaged to provide support a number of internal audit functions. Mr. Borelli’s son is not a certified public accountant and has not been engaged in providing services to Interpublic. Each member of the Compensation Committee, the Corporate Governance Committee and the Audit Committee is an independent director.

Meeting of Independent Directors

The NYSE Listing Standards require that if the group of Non-Management Directors includes one or more directors who are not independent, then at least once annually, the Non-Management Directors should hold an executive session attended by only independent directors. Although not required under the NYSE Listing Standards for 2011 because Mr. Borelli was not a director in 2011, the Board nevertheless held an executive session of its independent directors on February 24, 2011. Mr. Goldstein served as the Chairperson of the executive session.

Director Selection Process

The Corporate Governance Committee is charged with the responsibilities described below under the heading “Principal Committees of the Board of Directors—Corporate Governance Committee.”

One of the Committee’s responsibilities is to identify and recommend to the Board candidates for election as directors. The Committee considers candidates suggested by its members, other directors, senior management and shareholders as necessary in anticipation of upcoming director elections or due to Board vacancies. The Committee is given broad authorization to retain, at the expense of Interpublic, external legal, accounting or other advisers including search firms to identify candidates and to perform “background reviews” of potential candidates. The Committee is expected to provide guidance to search firms it retains about the particular qualifications the Board is then seeking.

All director candidates, including those recommended by shareholders, are evaluated on the same basis. Candidates are considered in light of the entirety of their credentials, including:

In determining the needs of the Board and Interpublic, the Committee considers the qualifications of sitting directors and consults with other members of the Board (including as part of the Board’s annual self-evaluation), the CEO and other members of senior management and, where appropriate, external advisers. All directors are expected to exemplify the highest standards of personal and professional integrity and to assume the responsibility of challenging management through their active and constructive participation and questioning in meetings of the Board and its various committees, as well as in less formal contacts with management.

Director candidates, other than sitting directors, are interviewed by members of the Committee and by other directors, the CEO and other key management personnel, and the results of those interviews are considered by the Committee in its deliberations. The Committee also reviews sitting directors who are considered potential candidates for re-election, in light of the above considerations and their past contributions to the Board.

Shareholders wishing to recommend a director candidate to the Committee for its consideration should write to the Committee, in care of its Chairperson, at The Interpublic Group of Companies, Inc., 1114 Avenue of the Americas, New York, NY 10036. Any recommendations will be considered for the next annual election of directors in 2012. A recommendation should include the proposed candidate’s name, biographical data and a description of his or her qualifications in light of the criteria listed above.

Succession Planning

Interpublic’s Board of Directors is actively engaged and involved in talent management. Annually, the Board reviews and analyzes the alignment of Interpublic’s strategy on personnel and succession with its overall business strategy. This includes a detailed discussion of Interpublic’s global leadership bench and succession plans with a focus on key positions at the senior officer level. In addition, the committees of the Board regularly discuss the talent pipeline for specific critical roles at Interpublic and each of its global agencies. The Board seeks opportunities to provide potential leaders with exposure and visibility to Board members through formal presentations and by holding a number of Board and committee meetings throughout the year at key operating units. In addition, the Board is regularly updated on key talent indicators for the overall workforce, including climate, diversity, recruiting and development programs.

COMMUNICATIONS WITH THE BOARD OF DIRECTORS AND NON-MANAGEMENT DIRECTORS

Interested parties may contact Interpublic’s Board of Directors, or the Non-Management Directors as a group, at the following address:

Board of Directors or Non-Management

Directors, as applicable

The Interpublic Group of Companies, Inc.

1114 Avenue of the Americas

New York, NY 10036

Communications may also be sent to individual directors at the above address. Communications to

the Board, the Non-Management Directors or to any individual director that relate to Interpublic’s accounting, internal accounting controls or auditing matters will also be referred to the chairperson of the Audit Committee. Other communications will be referred to the Presiding Director (whose responsibilities are described below) or the appropriate committee chairperson.

CODE OF CONDUCT

Interpublic has adopted a code of ethics, known as the Code of Conduct, which applies to all employees of Interpublic and its subsidiaries and affiliates. Interpublic’s Corporate Governance Guidelines provide that members of the Board of Directors and officers (which includes Interpublic’s Chief Executive Officer, Chief Financial Officer, Controller and Chief Accounting Officer and other persons performing similar functions) must comply with the Code of Conduct. In addition, the Corporate Governance Guidelines state that the Board will not waive any provision of the Code of Conduct for any Director or executive officer. The Code of Conduct, including future amendments, is available free of charge on Interpublic’s website at http://www.interpublic.com or by writing to The Interpublic Group of Companies, Inc., 1114 Avenue of the Americas, New York, NY 10036, Attention: Secretary.

MEETINGS AND COMMITTEES OF THE BOARD

Board Structure and Committees

The standing committees of the Board consist of the Executive Committee, the Compensation and

Leadership Talent Committee, the Corporate Governance Committee and the Audit Committee. The activities of the Compensation and Leadership Talent Committee, the Corporate Governance Committee and the Audit Committee are each governed by a charter that is available free of charge on Interpublic’s website at http://www.interpublic.com or by writing to The Interpublic Group of Companies, Inc., 1114 Avenue of the Americas, New York, NY 10036, Attention: Secretary. A description of the responsibilities of each standing Committee of the Board is provided in this Proxy Statement below under the heading “Principal Committees of the Board of Directors.”

Attendance at Board of Directors and Committee Meetings

The Corporate Governance Guidelines provide that each director is expected to prepare for, attend and participate in, at least 75% of all regularly scheduled and special meetings of the Board, absent special circumstances. The Board of Directors of Interpublic held seven meetings in 2010 and committees of the Board held a total of 17 meetings. During 2010, each director attended 75% or more of the total number of meetings of the Board of Directors and committees on which he or she served.

Attendance at Annual Meeting of Shareholders

Interpublic does not have a specific policy for attendance by directors at the Annual Meeting of Shareholders. However, each current director who was a director at the time of the 2010 Annual Meeting attended the meeting.

Executive Committee

The Executive Committee is authorized, when the Board of Directors is not in session, to exercise all powers of the Board of Directors which, under Delaware law and the by-laws of Interpublic, may properly be delegated to a committee, except certain powers that have been delegated to other committees of the Board of Directors or reserved for the Board of Directors itself. Due to the frequency of meetings of the Board and other committees of the Board, the Executive Committee did not hold any meetings in 2010.

Corporate Governance Committee

The Corporate Governance Committee is responsible for recommending to the Board of Directors the persons to be nominated for election to the Board of Directors and the membership and chairman of each Board committee. The other responsibilities of the Corporate Governance Committee include the

establishment of criteria for membership on the Board and its committees, the review and recommendation to the Board as to the independence of Non-Management Directors under the standards set forth in Interpublic’s Corporate Governance Guidelines and the NYSE Listing Standards, the evaluation on an annual basis of the collective performance of the Board and the Board’s committees, the recommendation to the Board of compensation and benefits for Non-Management Directors, and the review, continual assessment and recommendation to the Board of the best practices in corporate governance matters generally. In addition, the Corporate Governance Committee is authorized to hire experts or other independent advisers or legal counsel, at Interpublic’s expense, to assist the Corporate Governance in the discharge of its duties. Each member of the Corporate Governance Committee is a Non-Management Director and is independent in accordance with the standards set forth in Interpublic’s Corporate Governance Guidelines and the NYSE Listing Standards.

Audit Committee

The Audit Committee assists the Board in fulfilling its oversight responsibilities with respect to (i) the annual financial information to be provided to shareholders and the SEC; (ii) the system of internal controls that management has established; and (iii) the internal and external audit processes. In addition, the Audit Committee provides an avenue for communication among internal audit, the independent auditors, financial management and the Board. The Audit Committee also is responsible for the selection and retention of Interpublic’s independent auditors and the review of their compensation, subject to approval of the Board of Directors. Specific activities of the Audit Committee are described in the Audit Committee Report on page 10. Other responsibilities of the Audit Committee are described below under the heading “Risk Management.” In addition, the Audit Committee is authorized, to hire experts or other independent advisers or legal counsel, at Interpublic’s expense, to assist the Audit Committee in the discharge of its duties. Each member of the Audit Committee is a Non-Management Director and is independent in accordance with the standards set forth in Interpublic’s Corporate Governance Guidelines and the NYSE Listing Standards. The Board has determined that each member of the Audit Committee qualifies as an “audit committee financial expert” within the meaning of applicable SEC rules.

Compensation and Leadership Talent Committee

The    Compensation and Leadership Talent Committee (the “Compensation Committee”) is responsible for the adoption and periodic review of a remuneration strategy for Interpublic and its subsidiaries, which ensures that executive compensation for key senior executives is designed to incentivize and reward long-term growth, profitability and return to shareholders.

The Compensation Committee is responsible for approving the compensation paid to senior executives of Interpublic and its subsidiaries. For these purposes, compensation includes but is not limited to: (i) salary, (ii) deferred compensation,

(iii) bonuses and other extra compensation of all types, including annual and long-term performance incentive awards under Interpublic’s 2009 Performance Incentive Plan (the “2009 PIP”), (iv) The Amended and Restated Interpublic Restricted Cash Plan, (v) insurance paid for by Interpublic or any of its subsidiaries other than group plans, (vi) annuities and individual retirement arrangements, (vii) Executive Special Benefit Agreements, (viii) Interpublic’s Senior Executive Retirement Income Plan, and (ix) Interpublic’s Capital Accumulation Plan. The Compensation Committee also administers the 2009 PIP (and its predecessors, the 2006 Performance Incentive Plan, the 2004 Performance Incentive Plan, the 2002 Performance Incentive Plan and the 1997 Performance Incentive Plan) and the Employee Stock Purchase Plan (2006).

The Compensation Committee is responsible for approving the adoption of new plans and changes made to these plans and makes recommendations to the Board with respect to incentive compensation and equity-based plans. The Compensation Committee also reviews initiatives of Interpublic and its subsidiaries to retain and develop key employees on an ongoing basis and coordinates, manages and reports to the Board on the annual performance evaluation of key executives of Interpublic. In addition, the Compensation Committee is authorized to hire experts or other independent advisers or legal counsel, at Interpublic’s expense, to assist the Compensation Committee in the discharge of its duties.

The Compensation Committee’s primary processes for establishing and overseeing executive compensation are described in the Compensation Discussion and Analysis under the heading “Setting Compensation for the Named Executive Officers.” Each member of the Compensation Committee is a Non-Management Director and is independent in accordance with the standards set forth in Interpublic’s Corporate Governance Guidelines and the NYSE Listing Standards.

Board Leadership Structure

The Board continually examines its policies to ensure that Interpublic’s corporate governance and Board structure sufficiently maximize the Company’s effectiveness. Currently, the Board believes that

Interpublic’s Chief Executive Officer is best situated to serve as Chairman because he is the director most familiar with the operations of the Company, and most capable of determining the strategic and operational priorities of Interpublic and leading the discussion with the Board. To ensure a proper level of independent board oversight, the Board has also designated a Presiding Director, who has the duties listed below. The Board believes that the corporate governance measures it has in place ensure that strong, independent directors continue to effectively oversee our management and to provide vigorous oversight of our key issues relating to strategy, risk and integrity.

Interpublic’s Board structure allows for independent directors to bring experience, oversight and expertise from outside Interpublic and other industries, while the Chief Executive Officer brings a company-specific knowledge base and expertise. The Board believes that the combined role of Chairman and Chief Executive Officer promotes more effective strategy development and execution and a more enhanced information flow between management and the Board, which are essential to effective governance. The Board believes the combined role of Chairman and Chief Executive Officer, together with a Presiding Director, provides the most efficient and effective leadership for Interpublic, and accordingly is in the best interests of shareholders.

Presiding Director

The Presiding Director of the Board helps to coordinate communications between the Board and management of Interpublic. Specifically, the Presiding Director convenes and chairs meetings of the Non-Management Directors, coordinates and develops the agenda for, and chairs executive sessions of, the Non-Management Directors, coordinates feedback to the Chairman and Chief Executive Officer on behalf of the Non-Management Directors regarding business issues and management, and coordinates and develops with the Chairman of the Board and Chief Executive Officer the agendas and presentations for meetings of the Board. Mr. Goldstein currently serves as the Presiding Director.

Risk Management

The Board and its committees have an active role in the oversight and management of Interpublic’s risks. Elements of the Board’s risk management practices include:

Each committee also regularly informs the Board of any potential issues or concerns raised when performing its risk management duties.

REVIEW AND APPROVAL OF TRANSACTIONS WITH RELATED PERSONS

Interpublic’s Code of Conduct requires directors and employees to avoid activities that could conflict with the interests of Interpublic, except for transactions that are disclosed and approved in advance. Interpublic has adopted a written policy (the “Related Person Transaction Policy”) for approval of any transaction, agreement or relationship between Interpublic or any of its consolidated subsidiaries and a Related Person (a “Related Person Transaction”).

Under the Related Person Transaction Policy, a “Related Person” is defined as any (i) director, nominee for election as a director, or executive officer of Interpublic or any of their immediate family members (as defined by the Related Person Transaction Policy); (ii) any entity, including not-for-profit and charitable organizations, controlled by or in which any of the foregoing persons have a substantial beneficial ownership interest; or (iii) any person who is known to be, at the time of the transaction, the beneficial owner of more than 5% of the voting securities of Interpublic or an immediate family member of such person.

Under the policy, Related Person Transactions do not include any employee benefit plan, program, agreement or arrangement that has been approved by the Compensation Committee or recommended by the Compensation Committee for approval by the Board.

To facilitate compliance with the policy, the Code of Conduct requires that employees, including directors and executive officers, report circumstances that may create or appear to create a conflict between the personal interests of the individual and the interests of Interpublic, regardless of the amount involved, to Interpublic’s Chief Risk Officer using Interpublic’s Compliance Report Form. Each director and executive officer annually confirms to the Company certain information about Related Person Transactions as part of the preparation of Interpublic’s Annual Report on Form 10-K and its annual proxy statement. Director nominees and persons promoted to executive

officer positions must also confirm such information at the time of their nomination or promotion. Management also reviews its records and makes additional inquiries of management personnel and, as appropriate, third parties and other sources of information for the purpose of identifying Related Person Transactions, including Related Person Transactions involving beneficial owners of more than 5% of Interpublic’s voting securities.

The Audit Committee reviews transactions subject to the Related Person Transaction Policy and determines whether or not to approve or disapprove those transactions, by examining whether or not the transactions are fair, reasonable and within Interpublic policy. The Audit Committee makes its determination by taking into account all relevant factors and any controls that may be implemented to protect the interests of Interpublic and its shareholders. Among the factors that the Audit Committee takes into account in determining whether a transaction is fair and reasonable, as applicable, are the following:

No director may participate in any consideration or approval of a Related Person Transaction with respect to which he or she or any of his or her immediate family members is the Related Person. Related Person Transactions entered into, but not approved or ratified as required by the Related Person Transaction Policy, are subject to termination by Interpublic. If the transaction has been completed, the Audit Committee will consider if rescission of the transaction is appropriate and whether disciplinary action is warranted.

Related Person Transactions

Since January 1, 2010, there were no transactions involving a Related Person identified in the responses to the annual questionnaire sent to each director and executive officer of Interpublic or that otherwise are known to the Audit Committee or Interpublic.

DIRECTOR SHARE OWNERSHIP GUIDELINES.

The Compensation Committee has adopted Common Stock ownership guidelines for Non-Management Directors. These guidelines set the minimum ownership expectations for Non-Management Directors at a value of $300,000, which represents three times the Directors’ current annual cash retainer of $100,000. Non-Management Directors have five years from their initial election to

meet this guideline (or, for incumbent directors, until October 2012). Annual grants to Directors of shares of restricted stock are included in the determination of the ownership guideline amount, but Common Stock underlying unexercised stock options held by Non-Management Directors is not included. In addition, Non-Management Directors are required to hold all shares awarded to them (net of any shares sold to meet tax withholding requirements upon vesting) until they resign or retire from the Board. The Company believes that the equity component of director compensation serves to further align the Non-Management Directors with the interests of our shareholders. For information about share ownership of our Non-Management Directors, see “Non-Management Director Compensation” beginning on page 24 and “Share Ownership of Management” on page 67.

Annual Board/Committee Retainer Fees

Each Non-Management Director receives as cash compensation for services rendered an annual retainer and no additional compensation for attendance at Board or committee meetings. Effective July 22, 2010, the Board of Directors increased annual retainer of the Non-Management Directors from $80,000 to $100,000.

The Chairpersons of the Corporate Governance, Compensation and Audit Committees receive an additional annual retainer for service in that capacity. Effective July 22, 2010, the Board of Directors increased the fees paid to the Chairpersons of the Compensation Committee and the Audit Committee from $15,000 per year to $20,000 per year. The fee paid to the Chairperson of the Corporate Governance Committee remains at $10,000 per year.

Presiding Director Retainer Fees

As Presiding Director for 2010, Mr. Goldstein received $25,000. This retainer is in addition to his retainers as a Non-Management Director and as the Chairperson of the Audit Committee.

Non-Management Directors Plan

Each Non-Management Director also receives, as consideration for services rendered as a member of the Board, stock-based compensation under the 2009 Interpublic Non-Management Directors’ Stock Incentive Plan, which was approved by the shareholders in 2009 (the “2009 Directors Plan”). When it was adopted, the 2009 Directors Plan provided for an annual grant to each Non-Management Director of restricted shares of Common Stock having a market value of $80,000 on the date of grant (the “Restricted Shares”). On July 22, 2010, the Board of Directors increased annual grant of restricted shares to Non-Management Directors from $80,000 to $100,000.

Under the terms of the 2009 Directors Plan, a recipient of restricted shares has all rights of ownership with respect to the shares, including the right to vote and to receive dividends, except that, during a restricted period ending on the third anniversary of that date of the grant, (i) the recipient is prohibited from selling or otherwise transferring the shares and (ii) the shares are subject to forfeiture if the recipient’s service as a director terminates for any reason, other than due to death or disability, The Corporate Governance Committee, which is responsible for the administration of the 2009 Directors Plan, has discretion to waive the forfeiture if the cessation of service occurs on or after the first anniversary of the grant. All restrictions lapse automatically in the event of cessation due to death or disability.

On June 30, 2010, in accordance with the 2009 Directors Plan, Mss. Carter-Miller, Considine and Guilfoile and Messrs.  Borelli, Brack, Goldstein, Greeniaus, Kerr and Thomas each received a grant of 11,042 Restricted Shares.

Deferred Compensation

Mr. Goldstein and Ms. Considine each have an agreement with Interpublic under which they deferred all director fees for service before 2007. In 2010, the amounts deferred earned interest credits at a rate of 0.35%. The amounts deferred and accrued interest will be paid in a lump-sum within 30 days after the director’s separation from the Board.

Charitable Matching Program

Under the charitable matching program (the “Charitable Matching Program”), which was approved by the Board of Directors and has been in effect for a number of years, Interpublic matches up to $20,000 in charitable contributions made to eligible charities and academic institutions by members of the Board of Directors and certain senior management employees of Interpublic and its subsidiaries.

This section of our Proxy Statement provides an overview of our compensation philosophy and our executive compensation programs. It also details how we pay our “Named Executive Officers,” who in 2010 were:

Named executive officer compensation is set forth in the 2010 Summary Compensation Table (which can be found in page 42) and other compensation tables contained in this Proxy Statement. In addition, we provide explanations of the factors weighed by the Compensation and Leadership Talent Committee of our Board of Directors (the “Committee”) in arriving at specific compensation policies and decisions involving our named executive officers.

INTERPUBLIC OVERVIEW

Our Business

We are among the world’s leading providers of advertising and marketing services. Our agency brands deliver custom solutions to many of the world’s largest advertisers, across a spectrum of marketing disciplines and specialties, from public relations, customer relationship marketing and consumer advertising, to interactive, mobile and search engine marketing.

Our global brands include Draftfcb, FutureBrand, GolinHarris, HUGE, Initiative, Jack Morton, Lowe, Magna, McCann Erickson, Momentum, MRM, Octagon, R/GA, UM, and Weber Shandwick. Our integrated domestic agencies include Campbell-Ewald, Campbell Mithun, Carmichael Lynch, Hill Holliday, Mullen, The Martin Agency, Tierney and TM Advertising. We also have a full range of marketing specialist companies, in areas spanning geo-targeted and shopper marketing, media barter and direct response media, as well as the real-time buying and analysis of digital advertising.

We operate on behalf of clients in a single market or region or, with offices in over 100 countries, align globally across all major world markets. We employ approximately 41,300 marketing professionals and in 2010 had revenues of US $6.5 billion.

For more information about our business, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report filed on February 25, 2011.

2010 Business Highlights

We recently completed a very strong year, in which we posted outstanding organic revenue growth, significantly improved profitability and delivered a 147% increase in earnings per diluted share.

Coming off a severe recession that had dramatically impacted our industry, we entered 2010 uncertain as to the strength of a recovery and therefore focused on managing costs closely. Our stated aim was to resume significant margin expansion if we saw client confidence return and marketing activity increase commensurately.

As the economy strengthened, our company was able to achieve organic revenue growth and gains in profitability that were among the best in our peer group. This was in large part driven by strategic decisions taken by management, specifically the

re-positioning of certain of our agency offerings, as well as investments in talent focused on digital capabilities and developing markets. Contributions to this performance came from a very broad cross-section of our portfolio.

Our commitment to a conservative balance sheet and disciplined financial management were also contributors to our results. During the year, we significantly improved liquidity, continued to deleverage, improved our credit profile and capital structure and initiated actions to relieve potential share dilution.

Due to this strong performance, our share price increased significantly. Total shareholder return was 44%, which was a leading result in our sector, approximately twice that of the media industry average and nearly three times the performance of the S&P 500.

Role of the Compensation Committee

The Committee is responsible for establishing, implementing and continually monitoring adherence to the company’s compensation philosophy, as well as approving compensation awarded to senior corporate and operating executives, including the named executive officers. As such, the Committee authorizes all awards under Interpublic’s 2009 Performance Incentive Plan and its predecessor Performance Plans (collectively the “PIP”).

Compensation Philosophy and Basic Principles

The success of our company continues to depend on our ability to attract, motivate and retain a diverse group of talented individuals throughout our organization, who will enable us to deliver the best and most contemporary marketing solutions to drive our clients’ businesses. Talent is therefore our company’s most vital asset, just as it is our most significant expense. We must ensure our investments in this resource are disciplined and designed to drive results.

Our executive compensation philosophy is to provide a market-competitive total compensation program that supports our talent needs and business objectives, that is tied to performance, and that is aligned with the interests of our shareholders.

In selecting, evaluating and administering our compensation programs, including those that involve the named executive officers and those that apply more broadly within the company, management and the Committee are guided by the following principles, which the Committee reaffirmed at its October 2010 meeting:

HOW COMPENSATION DECISIONS ARE MADE

Role of Executive Officers and Management in Compensation Decisions

The Committee makes all pay decisions related to the named executive officers. The CEO does not participate in the Committee’s deliberations or decisions with regard to his own compensation.

At the Committee’s request, the CEO does present individual pay recommendations to the Committee for the CFO, the other named executive officers, and other executives whose compensation arrangements are subject to the Committee’s review. The CEO’s pay recommendations for such executives are informed by his assessments of individual contributions to the company’s financial performance, achievement of specified performance objectives, Talent Review results, competitive pay data and other factors. These recommendations are then considered by the Committee with the assistance of its independent consultant.

The CEO, Chief Human Resources Officer, General Counsel, and Senior Vice President of Global Compensation attend Committee meetings, but are not present for the Committee’s executive sessions or for any discussion of their own compensation. Other senior executives, as appropriate to the topic, will attend Committee meetings to provide relevant information or advice, but they also do not attend executive sessions or any discussion of their own compensation.

Role of Independent Consultant

In 2010, as in past years, the Committee retained the services of an external independent executive compensation consultant, Meridian Compensation Partners, LLC (“Meridian”) to work for the Committee in its review of executive and director compensation practices, including the competitiveness of pay levels, executive compensation design issues, market trends, and technical considerations.

At no time during 2010, nor at any other time, has the Committee directed Meridian to perform its services in any particular manner, or using any particular methodology.

The Committee has the final authority to hire and terminate the consultant, and the Committee evaluates the consultant annually. During 2010, Meridian did not provide any consulting advice to Interpublic or any of its subsidiaries outside the scope of executive compensation.

Setting Compensation for the Named Executive Officers

Interpublic’s annual and long-term cash-based and equity-based compensation programs are structured to motivate the named executive officers to achieve the strategic and operational goals set by the company. The programs reward executives for achieving such goals. In addition, the company’s benefit packages are intended to be competitive and to attract top talent.

The Committee periodically reviews the company’s compensation policies and programs and believes they encourage executives to remain focused on both the short-term and long-term goals of the company.

The Committee reviews and assesses the total compensation of each named executive officer on an annual basis. The Committee approves adjustments as appropriate based on the compensation philosophy discussed above. Material changes in compensation typically occur only based on performance, in response to significant changes in an individual’s responsibility, due to changes in market conditions, or in limited circumstances when the company is at risk of losing a highly talented and valued employee.

Compensation decisions are made based on the following information:

The process begins within the operating companies and corporate functions, followed by meetings between Interpublic’s CEO and the chief executive officers of each of the company’s principal operating units and the heads of the corporate staff functions. At each meeting, participants review senior talent, succession plans, and diversity and inclusion efforts. The CEO then reviews with the full Board of Directors the senior talent pipeline, needs and succession plans for the entire organization.

This Board-level review includes a discussion of each of the named executive officers, their future career path and successors, as well as succession plans for the IPG CEO position. These reviews inform pay decisions by providing an in-depth look at the named executive officers, their responsibilities, relative contributions and future potential, as well as their relative compensation. Other factors such as scarce skills, leadership skills, potential and key client relationships are also taken into consideration when reviewing compensation.

USE OF COMPETITIVE DATA FOR COMPENSATION REVIEWS

In 2010, the Committee’s independent consultant conducted its annual market review to assess the competitiveness of current compensation

(consisting of base salary, target annual incentive and target long-term incentives) received by the named executive officers. Retirement benefits are reviewed periodically.

Due to an increasingly convergent media landscape, the company increasingly competes for executive talent not only with direct industry peers but also a broader group of companies. To reflect this key development and capture the full scope of labor markets in which the company now sources talent, the annual compensation review benchmarked pay against two peer groups:

At the October 2010 meeting, the Committee reviewed and approved the addition of several digital media companies to the Talent Peer Group to better reflect the emerging market for executive talent.

Data from these sources was used to determine a range of competitive pay. The independent consultant advised that using multiple reference points provides the Committee with a more complete view of competitive pay practices within the company’s relevant labor markets for our named executive officers.

The 2010 study reflected that total compensation for the named executive officers is within a competitive range of the market.

The table below lists the specific companies included in the two peer groups:

2010 EXECUTIVE COMPENSATION PROGRAM ELEMENTS

For the fiscal year ended December 31, 2010, the principal components of Interpublic’s executive compensation program were:

The Committee reviewed the company’s compensation policies and programs and believes they encourage executives to remain focused on both the short-term and long-term goals of the company.

Base Salary

Base salary is central to our ability to attract and retain talent, including our named executive officers. Although its prominence in the pay mix declines with seniority, base salary generally remains an important part of compensation discussions with executive talent in our sector and related industries.

Each year the Committee determines the base salary for the CEO and, after considering recommendations from the CEO, the Committee approves base salaries for the other named executive officers. In making this determination, the Committee follows the company’s stated compensation philosophy and considers quantitative and qualitative factors, including the executive’s total compensation, individual performance, level of responsibility, prior experience, and pay history. As appropriate, the Committee also considers any material changes in responsibilities and may seek to address perceived retention risks. The Committee also considers base salaries paid to executives for comparable positions within the company, as well as data from the independent consultant’s annual compensation review of base salaries paid to executives in comparable positions within comparably-sized companies in both previously-identified peer groups.

For the named executive officers, base salaries are the subject of individual employment agreements (described in greater detail beginning on page 55 under the heading “Employment Agreements”), which give Interpublic the ability to increase, but not decrease, base salary.

In 2010, the Committee made no changes to the base salaries of the named executive officers.

Annual Incentives

Purpose

Annual cash incentives are paid to reward performance that improves profitability, involves the achievement of high priority strategic objectives and ultimately drives shareholder value. Annual incentives are a standard component of competitive compensation within our labor markets and an important tool for driving key behaviors, improving financial results and ultimately increasing shareholder value.

The Committee believes the annual incentive compensation program established for the senior executives encourages them to remain focused on achieving these primary goals and does not encourage or allow for excessive and unnecessary risk-taking.

Target Annual Incentive Opportunities 

For annual incentive awards, the Committee sets specific individual incentive award targets for each named executive officer. The individual incentive award target is expressed as a percentage of each individual’s base salary. Each year, as part of its total compensation review for senior executives and after considering the independent consultant’s competitive review and other factors, the Committee determines the annual incentive target for the CEO. After considering recommendations from the CEO, the Committee then approves the annual incentive targets for the named executive officers.

In determining the annual cash incentive target, the Committee generally takes into account the same factors that it considers in determining base salary, as well as contractual obligations for incentive compensation under individual employment agreements.

For 2010, the annual cash incentive targets, as a percent of base salary, for the named executive officers were as follows:

These percentages are unchanged from 2009. For the named executive officers, annual incentive targets are the subject of individual employment agreements (described in greater detail beginning on page 55 under the heading “Employment Agreements”), which give Interpublic the ability to increase, but not decrease, targets levels.

Performance Metrics

In 2010, as in past years, actual awards earned could vary between 0% and 200% of the individual incentive target, based two-thirds on financial performance and one-third on the achievement of high priority objectives for all named executive officers except Mr. Roth, whose award opportunity was based three-quarters on financial performance and one-quarter on the achievement of high priority objectives.

Operating Margin (OM) and Operating Income After Incentives (OIAI) are the company’s primary measures of profitability. OIAI is defined as operating income, explicitly less the annual cost of all equity and cash incentives, after any restructuring and impairment charges. OM is defined as OIAI divided by gross revenue.

For Mr. Roth, financial performance was assessed based on the consolidated OM weighted one-quarter and OIAI weighted one-half, of the company as a whole. For Messrs. Mergenthaler, Krakowsky and Sompolski, financial performance was assessed based on the consolidated OM and OIAI of the company as a whole, each weighted equally. For Mr. Brien, the financial performance measures were based on OM and OIAI performance for both Mediabrands and McCann Worldgroup, reflecting the fact that he moved into his new role as CEO of McCann Worldgroup during the course of 2010.

In setting financial targets for 2010, the Committee took into account the macroeconomic uncertainty coming out of 2009 and the company’s need to demonstrate that it could get back on the track of significant margin improvement it had demonstrated from 2006 through 2008, prior to the global recession. The 2010 OM target of 8.3% and OIAI target of $518 million represented improvements of 260 basis points and greater than 50%, respectively, relative to 2009 results. The company’s reported results for 2010, produced OM of 8.4% and OIAI of $549 million.

High priority objectives for the named executive officers are also set early in the year, and may include quantitative and/or qualitative objectives specific to the individual. High priority objectives include goals tied to the company’s overall or an operating unit’s strategic priorities and typically include talent management, diversity and inclusion programs and cross-agency collaboration. For quantitative high priority objectives, specific objectives are established. For qualitative high priority objectives, specific accomplishments or expectations are defined and the Committee exercises judgment in assessing performance.

With all high priority objectives, performance is assessed after considering written self-assessments provided to the Committee for the company as a whole and its principal operating units. Results are then ranked as “below minimum”, “minimum”, “good”, “very good”, and “exceptional”, then a rating

between 0% to 200% of the target is assigned. In 2010, in addition to the annual incentive awards, the Committee made supplemental awards to named executive officers whose high priority objectives performance exceeded the exceptional level.

The annual cash incentive awards to senior executives are made under the 2009 Performance Incentive Plan (the “2009 PIP”), which limits the annual incentive amount that may be earned by any one individual in a single year to $6,000,000.

2010 Annual Incentive Payouts

For the fiscal year ended December 31, 2010, the named executive officers received the following annual incentive and supplemental awards, which were paid in March 2011:

As is its regular practice, for the named executive officers other than Mr. Brien, the Committee considered Interpublic’s financial performance and each individual’s achievement of individual high priority objectives.

For Mr. Roth, the financial performance portion of his award is based on a rating of 144.8% against the 2010 incentive targets and for Messrs. Mergenthaler, Krakowsky and Sompolski, the financial performance portion of their awards is based on a rating of 141.1% against those targets. There were no material adjustments made to actual financial performance in determining these ratings.

For the corporate named executive officers other than Mr. Roth, each executive’s high priority objective rating was based on the Committee and CEO’s assessment of the executive officer’s achievement of key strategic objectives. Mr. Roth’s assessment rating was based on an assessment by the full Board of Directors of his achievement of key strategic objectives.

Mr. Roth received a high priority objective rating of “Very Good” or 173% reflecting his financial and strategic leadership that resulted in the company’s very strong 2010 operating performance, which led to outstanding shareholder return. This effort included his role in directing optimization of the company’s portfolio of offerings to ensure that we are able to meet the evolving needs of clients, as evident in organic revenue growth at the top end of our peer group. Mr. Roth also oversaw management transitions at two of the company’s major operating units, as well as initiatives that strengthened the company’s financial position and a successful outreach program to the investor community. In partnership with the Board of Directors, he continued to promote best practices in corporate governance, disclosure and transparency, as well as further improving our management succession and talent development processes. Mr. Roth’s personal leadership and commitment to diversity and inclusion resulted in demonstrable progress in our efforts to achieve employee and supplier diversity.

Mr. Mergenthaler received a high priority objective rating of “exceptional” or 200% reflecting his leadership role and success in driving industry-leading operating margin improvement, high levels of revenue conversion and strong cash flow performance. He led a number of initiatives that significantly strengthened the company’s financial reserves and flexibility. Mr. Mergenthaler also continued to play a lead role in the company’s interactions with investors, which contributed to the company’s strong share performance, and with the rating agencies, all of which upgraded the company during 2010. He also participated actively in the company’s diversity and inclusion initiatives, as both Chairperson of the Corporate Diversity Council and an executive sponsor of employee resource groups. In addition to the annual incentive award earned under the formula described above, the Committee approved a supplemental award of $53,400 in recognition of the exceptional results achieved against these key strategic high priority objectives.

Mr. Krakowsky received a high priority objective rating of “exceptional” or 200% reflecting his

leadership role and success in continuing to define a strategy that has resulted in a portfolio of offerings that is competitive in the marketplace. He played an important role in completing management transitions at two of the company’s largest operating units and one of its leading digital marketing agencies, as well as in our efforts to combine a number of our agencies. Mr. Krakowsky also remained a key driver of a number of major integrated client engagements and other cross-agency business development opportunities, as well as much of our emerging media activity. He participated actively in the company’s diversity and inclusion initiatives as an executive sponsor of employee resource groups and a member of the Corporate Diversity Council. In addition to the annual incentive award earned under the formula described above, the Committee approved a supplemental award of $23,087 in recognition of the exceptional results achieved against these key strategic high priority objectives.

Mr. Sompolski received a high priority objective rating of “good” or 139% reflecting his success in managing the human resources function, including ongoing improvement in and development of human resources talent resident at Interpublic and the operating units, his leadership role in the company’s compensation practices, diversity and inclusion efforts and his driving of improvements in the company’s talent management capabilities and succession planning.

The financial portion of Mr. Brien’s award is based on combined McCann Worldgroup and Mediabrands OIAI and OM rating of 71%. This rating reflects performance against pre-set targets that the Committee considered difficult to achieve. In accordance with SEC guidance, the company has elected not to disclose the specific performance objectives or 2010 results as this data is not publicly disclosed and would provide insights to competitors that could harm our business.

Mr. Brien received a high priority objective rating of “exceptional” or 200%, reflecting his leadership role and success in establishing the framework necessary

to transform McCann Worldgroup’s powerful offerings in an increasingly digital and accountable marketing environment. This included identifying and tasking key senior agency leaders with developing strategic plans in areas such as integration, technology, performance measurement and commercial excellence. Mr. Brien successfully spearheaded outreach to clients and the recruitment of top talent in creative, strategic, and digital leadership roles. He also continued to fully support and give prominence to diversity initiatives across all McCann Worldgroup companies. In addition to the annual incentive award earned under the formula described above, the Committee approved a supplemental award of $182,876 in recognition of the exceptional results achieved against these key strategic high priority objectives.

These assessments, determined by the CEO and approved by the Committee, reflect McCann Worldgroup’s performance, actions taken on specific talent-related initiatives, and progress on diversity and inclusion initiatives across the operating company.

Long-term Incentives

Purpose

Long-term incentive awards are designed to retain and attract top talent, and align executive and shareholder interests by focusing recipients on the long-term performance of Interpublic and its principal operating units. Management and the Committee believe long-term incentives are a vital way to encourage collaboration across the company and drive sustainable results over multi-year periods. The Committee believes the long-term incentive compensation program established for the senior executives encourages them to remain focused on achieving these primary goals and does not encourage or allow for excessive and unnecessary risk-taking. Further, these incentives ensure that executives have compensation that is at risk for longer periods of time and is subject to forfeiture in the event they terminate their employment.

2010 Long-term Incentive Awards

In 2010, annual long-term incentive awards were made on the final trading day of March, enabling synchronized communication of annual and long-term incentives with each executive, enforcing the concept of total compensation. At its February meeting, the Committee determined the long-term incentive target awards under the PIP, defined as a dollar expected value, for the CEO and, after considering recommendations from the CEO, approved the long-term incentive targets for the other named executive officers. The determination of the annual long-term incentive award is assessed as part the total compensation review for senior executives and, as in the case of setting salaries, takes into consideration the independent consultant’s competitive review and other factors such as each executive’s total compensation, pay history, absolute and relative performance, and expected future performance. For the named executive officers, long-term incentive targets are the subject of individual employment agreements (described in greater detail beginning under the heading “Employment Agreements” on page 55), which allow Interpublic to increase, but not decrease, long-term incentive targets.

For 2010, the Committee used a combination of stock options, performance cash, and restricted shares to deliver long-term incentives to its Chairman and CEO, reflecting the Committee’s belief that since the CEO has the greatest ability to drive company performance, this mix of equity and cash is appropriate. The expected value of Mr. Roth’s long-term incentive award was designed to split one-third of the total long-term incentive expected value in stock options, one-third in performance cash and one-third in restricted shares.

For the other named executive officers, the Committee used a combination of restricted shares and performance cash to deliver long-term incentives. Restricted shares serve primarily as a retention vehicle given that they vest after a three-year period. Restricted shares also motivate executives to improve stock price. Performance cash

motivates executives to achieve specific operational financial goals. For the other named executive officers, the long-term expected value was split one-third in restricted shares and two-thirds in performance cash.

Total long-term incentive expected dollar value guidelines are set for each position. The Committee set the following long-term incentive expected dollar value guidelines for 2010:

*(plus a one-time $1,000,000 award in recognition of his promotion to McCann Worldgroup CEO)

The number of stock options and restricted shares granted is determined by dividing the expected value allocated to each type of award by the estimated expected per share value of the type of award at the time of grant. These estimated expected values of the respective types of awards are developed with the independent consultant’s assistance, and for stock options also with the assistance of the third party that provides the company with stock option values for FASB ASC Topic 718 reporting purposes. In all cases, these expected values and stock option exercise prices are calculated using the average of the company’s high and low prices based on the company’s stock price on the grant date.

The expected values at grant for the named executive officers’ 2010 annual long-term incentive awards were as follows:

Vesting Provisions

The stock options granted to Mr. Roth in 2010 have a ten-year term and vest 33%, 33% and 34% on the second, third and fourth anniversaries, respectively, of the date of grant. The company believes that these vesting provisions promote a long-term focus and provide a strong retention incentive for participants. This grant is shown in the Grants of Plan-Based Awards Table on page 46.

For restricted stock, the sale or transfer of shares is typically restricted for a period of three years from the grant date and the shares are subject to forfeiture if the executive leaves Interpublic before the restrictions expire, unless the Committee determines otherwise. There can be two exceptions to the foregoing. First, the company may, on a case-by-case basis, grant shares with different

vesting periods, most often in the case of up-front equity grants made to new executives as consideration for equity forfeited at prior employers. In these instances, the company will strive to approximate generally the vesting terms that existed for the forfeited equity, but in no event will the shares vest in less than one year. Second, equity awards may be used to address a specific employment or retention need and the vesting period may be lengthened or shortened as appropriate to the individual circumstances.

Long-term Performance Plans

In 2009, the Committee introduced the use of performance cash awards. Performance cash awards are subject to vesting over a three-year performance period. The final value of the award may vary from 0% to 200% of the target amount, based on

Interpublic or its principal operating units’ multi-year performance against financial objectives set annually at the beginning of each year. Final award values are, therefore, a direct function of actual performance against these metrics and are paid in cash at the end of the three-year period.

In 2010, performance cash awards were granted for the 2010 through 2012 performance period. For the named executive officers, other than Mr. Brien, the performance objectives were tied to Interpublic’s annual organic revenue growth (OG) and operating margin (OM) in each year of the three-year period. Performance cash granted to Mr. Brien was tied to the same metrics for McCann Worldgroup and Mediabrands. Under the terms of the awards, the actual value, if any, that the executive would receive at the end of the three-year performance period depends on the extent to which the annual performance objectives are achieved each year of the three-year period. Based on year-over-year comparisons, management and the Committee deem these financial performance targets as relatively difficult to achieve.

The final value of an award is determined by the average of the performance ratings achieved during each of the three years. In 2008, the gross revenue target of $6,937 million and the OM target of 8.5% were exceeded and met, respectively, with reported results producing gross revenue of $6,963 million and an OM of 8.5% for 2008. In 2009, neither the organic growth target of (6.0%) or OM target of 7.7% were achieved, with reported results producing organic growth of (10.8%) and an OM of 5.7% for 2009. In 2010, the organic growth target of 1.1% and OM target of 8.3% were both exceeded, with reported results producing organic growth of 7.0% and an OM of 8.4% for 2010. The Committee considered the performance targets for 2010 difficult to attain while appropriate for the current economic environment when they were established at its March 2010 meeting.

2008-2010 Performance Share Payouts

The performance cycle of the 2008-2010 performance shares ended December 31, 2010.

Mr. Roth, Mr. Mergenthaler, Mr. Krakowsky and Mr. Sompolski each earned a performance rating of 94.6% of target. The rating was tied to Interpublic’s three-year organic revenue growth and operating margin targets. For Mr. Brien, the performance rating earned was 167.8% of target, tied to Mediabrands’ organic revenue growth and operating margin targets for the 2008-2010 performance cycle. The resulting numbers of shares were as follows:

Retirement Benefits

Purpose

The company reviews retirement benefits as a key component of our executive compensation program because they encourage and reward long-term service. Therefore, we offer our named executive officers and other employees a comprehensive benefits program that provides the opportunity to accumulate retirement income.

Program Descriptions

Our retirement programs include the Company’s qualified 401(k) savings plan, the Capital Accumulation Plan (“CAP”), the Senior Executive Retirement Income Plan (“SERIP”), executive medical benefits, and reimbursement for tax planning and preparation, a benefit that the company chose to discontinue beginning in 2010.

The CAP provides participants with an annual dollar credit to an interest-bearing account. Under the terms of the CAP, interest is credited on December 31st of each year at an interest rate equal to the closing 10-year U.S. Treasury yield on the last business day of the immediately preceding calendar year. For a more detailed description of the CAP, see “Nonqualified Deferred Compensation Arrangements—The Interpublic Capital Accumulation Plan” on page 52. Messrs. Roth, Mergenthaler, Krakowsky and Sompolski participate in CAP at the levels described on page 53.

The SERIP provides a defined annual annuity to selected executives for a 15-year period upon satisfying specific vesting provisions. Participation is limited to a select group of very senior executives and requires Committee approval. Messrs. Roth and Brien are the only named executive officers that participate in the SERIP. For a more detailed description of the SERIP, see “Pension Arrangements—The Interpublic Senior Executive Retirement Income Plan” on page 51. Messrs. Roth and Brien participate in SERIP at the levels described on page 51.

The company’s 401(k) savings plan is a tax-qualified retirement savings plan pursuant to which all U.S.-based employees, including the named executive officers, are able to contribute compensation on a before-tax basis, subject to dollar limits prescribed by federal tax laws. For employees with less than 10 years of service, the company will match 50% of the first 6% of compensation contributed. For employees with 10 or more years of service, the company will match 75% of the first 6% of compensation that is contributed. The company’s 401(k) savings plan also allows after-tax contributions up to limits prescribed by federal tax laws. The match applies to the total amount contributed on both a before- and after-tax basis.

From time to time, the company may provide an additional performance-based matching contribution to the 401(k) plan based on the Committee’s assessment of the company’s annual performance, including the company’s operating margin for its consolidated U.S. businesses relative to pre-set targets. The objective of this feature is to induce greater participation in the 401(k) savings plan and to allow all U.S. employees to benefit from the company’s performance. For 2010, the Committee approved an additional matching equal to 8% of participant matched contributions.

Benefits Review and Decision Process

As part of its competitive pay review, the independent consultant periodically provides the Committee with a comparison of Interpublic’s

benefits programs with to those of a sample of competing companies. This benefits program review is conducted in the context of total compensation, and the review considers compensation and benefits in total.

Decisions regarding new or enhanced participation in these programs, other than 401(k), are made after considering the total compensation, and are often used as inducements for new hires to accept employment, or as one component to a total pay discussion or negotiation. For a number of the named executive officers, retirement and other benefits are the subject of individual employment agreements (which are described in greater detail beginning on page 55, under the heading “Employment Agreements” and which give Interpublic the ability to increase, but not decrease, the specific benefit).

On a case-by-case basis, the Committee, and the Management Human Resources Committee (MHRC), consisting of Interpublic’s CEO, CFO, General Counsel and Chief Human Resources Officer, to which the Committee delegates certain responsibilities, consider the appropriateness of CAP and SERIP participation and benefits. In making recommendations to the Committee or MHRC, the company considers an individual’s role, level in the organization, total compensation level, performance, length of service, and other factors. When making determinations to award additional CAP and SERIP awards, the company also considers all forms of accrued qualified and non-qualified retirement benefits previously awarded or earned, and assumes the executive contributed the maximum amount permitted to the 401(k) savings plan.

Severance and Change of Control Benefits

As is common practice, the company offers severance and change of control benefits upon the occurrence of several specified events. In order to provide market-competitive total compensation packages to our executive officers, as well as to ensure the ongoing retention of these individuals in the event of potential takeovers that would create uncertainty as to their future employment with the company.

The named executive officers may receive severance benefits from the company under the terms of their employment agreements (described in greater detail beginning on page 55 under the heading “Employment Agreements”), the company’s Executive Severance Plan and/or their change of control agreements, depending on the circumstances of a potential termination. Under the PIP, named executive officers receive accelerated vesting and payouts at target of their annual and long-term incentives upon a Change of Control, as defined on page 60 (severance benefits under these and other applicable plans or agreements are described in greater detail beginning under the heading “Employment Agreements” on page 55).

Under our change in control agreements, individuals are eligible for enhanced severance benefits, contingent on a Change of Control followed by a Qualifying Termination.

Share Ownership Guidelines

We have adopted stock ownership guidelines for non-employee directors, named executive officers and other senior executives. The purpose of these stock ownership guidelines is to:

The stock ownership guidelines are expressed as multiples of base salary. The multiple for the CEO is five times base salary and for the other named executive officers two times base salary. The executives in the program have five years from 2007 (or from the date at which they join the company or are promoted into a position in which the guidelines apply to them) to reach their established guidelines, which is measured by combining actual company stock owned, unvested restricted shares and any shares owned through the company stock purchase plan.

Every year, at its July meeting, the Committee reviews the levels of stock ownership against the stock ownership guidelines of named executive officers and other senior executives. The company expects the named executive officers to continue to build their ownership over the next two years to meet these guidelines and intends to periodically check their progress toward these goals.

TAX AND ACCOUNTING IMPLICATIONS

Deductibility of Executive Compensation

Section 162(m) of the U.S. Internal Revenue Code (the “Code”) prohibits the company from taking a tax deduction for compensation paid in excess of $1,000,000 to the named executive officers (other than the principal financial officer). However, performance-based compensation, as defined in the tax law, is fully deductible if the plan under which the compensation is paid has been approved by shareholders and meets other requirements. The company’s policy is to qualify the compensation paid under its incentive compensation programs as tax deductible to the extent feasible and consistent with its overall compensation objectives.

As part of its responsibility, the Committee reviews and considers the deductibility of executive compensation. The company believes that compensation paid in 2010 under its executive incentive plans is deductible for federal income tax purposes, except as indicated below. In certain situations, the Committee may approve compensation that is not deductible in order to ensure competitive levels of total compensation for its named executive officers. In this regard, for 2010, with respect to each named executive officer who is covered by Section 162(m) of the Code, to the extent that the sum of the executive’s base salary, the fair market value of restricted stock awards that vested during the year and the additional bonus awards exceeded $1,000,000, the excess was not deductible for federal income tax purposes.

The company has guidelines for reviewing the impact of the accounting and tax treatment of various forms of compensation covered by the PIP. The guidelines identify specific responsibilities and actions required by the Human Resources, Accounting and Tax departments for all group and individual actions. These guidelines are designed to ensure that accounting and tax treatment of the awards granted under the plan are properly addressed.

Nonqualified Deferred Compensation

Effective since January 1, 2005, most of the company’s deferred compensation and nonqualified retirement benefit arrangements, including most of the company’s severance arrangements, have been

subject to new tax rules under Section 409A of the Code. The company has made significant efforts to ensure that affected arrangements comply with the new requirements.

Accounting for Stock-based Compensation

Beginning on January 1, 2006, the company began accounting for stock-based payments including its grants of stock options, restricted shares and performance shares in accordance with the requirements of SFAS 123(R).

COMPENSATION RECOVERY IN THE EVENT OF A FINANCIAL RESTATEMENT

The company has adopted a policy under which, in the event of a significant restatement of financial results due to fraud or misconduct, it will review payments made to senior executives on the basis of having met or exceeded specific performance targets during the restatement period. If such bonuses would have been lower had they been calculated based on such restated results, the Board of Directors will, to the full extent permitted by governing law, seek to recoup for the benefit of the company all such bonuses to senior executives whose fraud or misconduct, as determined by the Board of Directors, resulted in such restatement. For purposes of this policy, the term “senior executives” means “executive officers” as defined under the Securities Exchange Act of 1934, as amended, and the term “bonuses” means awards under The Interpublic Group of Companies, Inc. 2004 Performance Incentive Plan or any equivalent incentive plan which supersedes such plan.