WPP set for stormy annual meeting as Sorrell fallout continues
Sir Martin Sorrell left WPP, the company he founded more than 30 years ago, following allegations of personal misconduct.
WPP is bracing for a fiery annual meeting next week as investors vote on key appointments and the advertising giant’s pay report following Sir Martin Sorrell’s shock departure.
Two influential shareholder advisory groups – Glass Lewis and PIRC – are recommending investors reject the group’s remuneration report, which includes a payout to Sir Martin.
The advertising guru left WPP, the company he founded more than 30 years ago, following allegations of personal misconduct.
WPP carried out an inquiry into allegations that Sir Martin misused company funds, but the details of the investigation were never disclosed.
But Glass Lewis has said that without more information, shareholders were unable to determine whether Sir Martin was a “good leaver”, adding that it has “severe reservations” about WPP’s pay plans, given the lack of transparency.
Sir Martin is in line to receive £14 million from WPP, having received £48.1 million the year before. He will also hoover up nearly £20 million in payouts from WPP over the next five years as part of an exit deal with the firm.
PIRC described Sir Martin’s payoff, equivalent to 1,060% of his salary, as “highly excessive”.
Investors have also been advised by the shareholder advisory groups to vote against the re-election of chairman Roberto Quarta for failing to adequately prepare for Sir Martin’s replacement, and for overcommitting with other roles.
“We harbour concerns as to the transparency and efficacy of the succession process, for which we believe the chair of the nomination committee, Mr Quarta, bears responsibility,” Glass Lewis said.
“Despite previous assurances, we believe the nomination committee has failed to adequately prepare for the replacement of Sir Martin.”
Mr Quarta has been made executive chairman, while Mark Read, chief executive of WPP’s Wunderman business, and Andrew Scott, European chief operating officer, have been made joint operating chiefs.
However, WPP has gained the support of advisory group Institutional Shareholder Services, which has backed all of the company’s AGM resolutions.
Sir Martin earlier this month confirmed his return to the London stock market, with the former WPP boss to head up a newly formed “multi-national communication services business”.
The advertising guru will pump £40 million into the shell company Derriston, which will then acquire S4 Capital, a firm established by Sir Martin and through which he will launch his comeback.
WPP’s AGM will take place on Wednesday.