Photo: GM / Screengrab
General Motors, which is publicly struggling to bring its $1.8 billion ad budget under control, today defended its payment of $600,000 to an ad agency that employs the wife of its CFO, Dan Ammann.The ads created by the agency, Mother New York, generated only 64,387 views on YouTube. One of them has been seen by only 4,061 people.
It’s the third in a string of recent controversies on GM’s ad budget. First, GM suddenly pulled its $10 million Facebook ad budget days before the social network’s IPO, claiming its ads weren’t effective. Then it said it would stop advertising on the Super Bowl.
In an SEC disclosure, GM said “not all the required procedures were followed” when the $600,000 was paid to Mother New York, an ad agency that worked on a project for the centennial of the Chevrolet. GM CFO Dan Ammann is married to Mother partner/COO Pernilla Ammann.
Photo: Pernilla Ammann / Linkedin
Pernilla Ammann is in charge of contract negotiations at the agency, according to Mother’s web site.Because the payment involved a “related party”—and might have been a conflict of interest—SEC rules require such payments be disclosed publicly so investors can judge for themselves whether the company is operating honestly. In this case, it appears that the payment was made without permission of GM’s general counsel, which normally examines related payments before they are made.
The payment was ratified after the fact, GM told Bloomberg. Here’s GM’s SEC statement in full:
We have recently learned about a related party transaction in 2011 not included in the proxy statement. Pernilla Ammann, the wife of GM’s Chief Financial Officer Dan Ammann, is an officer and partner in an advertising agency that received approximately $600,000 for services provided to a GM subsidiary in 2011. This transaction has been properly ratified under our Related Party Transaction Policy, but not all the required procedures were followed.
Here’s an example of what GM paid $600,000 for:
- Here’s The Real Reason GM Pulled $10 Million In Ads From Facebook
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