Saturday 22 October 2016

Third of investors baulk at WPP pay

Kate Holton

Published 09/06/2016 | 02:30

WPP chief executive Martin Sorrell. Photo: ERIC PIERMONT/AFP/Getty Images
WPP chief executive Martin Sorrell. Photo: ERIC PIERMONT/AFP/Getty Images

A third of investors in Martin Sorrell's WPP yesterday failed to back the advertising boss's £70m (€89m) pay package, one of the biggest payouts in British corporate history.

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Mr Sorrell, who built WPP from a two-man operation in a London office to one that now dominates the industry with around 194,000 staff in 112 countries, has said the scheme reflects his firm's rapid growth in recent years.

The 71-year-old Mr Sorrell has made headlines before for his large payouts and the bulk of the 2015 package for the chief executive came from a long-term scheme called Leap which has now been modified.

Excluding abstentions, 33.5pc of investors did not support the remuneration deal but the vote was not binding.

The company's remuneration policy will now face a binding vote by shareholders at next year's annual meeting and under the firm's new scheme Mr Sorrell's pay is set to fall next year.

Asset manager Hermes, a WPP shareholder, said before the vote that it would be unable to support the remuneration packages, in part because of "historic concerns about board composition and the remuneration committee's apparent lack of vigour and stress-testing".

In defence of the 2015 pay package, WPP noted that shares rose by 98pc between 2011 and 2015, while the FTSE 100 was up 5.8pc in the same period.

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