Managers say truce at Saatchi won't last

SENIOR executives at Saatchi & Saatchi are warning that last week's truce between Maurice Saatchi, chairman, and Charles Scott, chief executive, has failed to resolve a deep rift between the two directors.

Their claim follows a board decision last week that the interests of the troubled advertising group were 'best served' by both men continuing in their present roles.

The decision - made after consultation with key British and US shareholders, as well as clients and employees - is at odds with the opinion of the group's managers.

One high-ranking employee said: 'I cannot understand how the two can kiss and make up so suddenly after their bitter personality clash that has been going on for months. This is not going to last long. Maurice feels Charles is to blame for the group's dismal performance, and wants his baby back.'

Some institutional investors and analysts regard the move as little more than a holding statement until a comprehensive review of Saatchi's performance is carried out by Sir Peter Walters, the group's senior non-executive director. Insiders say the review, which is likely to take months and will focus on service contracts and cost structures, could ultimately decide who goes.

Sir Peter and Robert Louis Dreyfus, the former Saatchi chief executive and a close associate of Mr Scott, joined other non-executive directors for a critical meeting of their own last Tuesday, before the full board meeting the same day.

The non-executives are thought to have concluded that the departure of either man at this stage could trigger a collapse in Saatchi shares and rattle key clients, which include Mars and Procter & Gamble.

Mr Scott is believed to regard Sir Peter's review as an infringement on his authority, but the non-executives have asked him to toe the line. Meanwhile, Mr Saatchi has been asked to stop undermining Mr Scott's position.

The company is setting up a new executive committee comprising the two men, the finance director Wendy Smyth, and heads of the group's principal divisions.