WPP braced for new revolt over Martin Sorrell’s £43m
Controversy over WPP chief executive Sir Martin Sorrell’s remuneration has erupted once more, after two leading proxy advisory groups raised concerns over the £43m pay package he received last year.
The size of Sorrell’s payout has remained a sticking point for many investors, despite the advertising giant introducing a new policy in 2013 and abandoning its controversial Leap “leadership equity acquisition plan”, which still has two years to run. The scheme was scrapped after 60 per cent of shareholders rebelled at WPP’s AGM in 2012.
Sorrell earned around £36m last year as part of Leap, as well as short-term bonus of £3.6m, pension benefits and a basic salary of £1.15m, making him the best paid boss of the FTSE 100.
Shareholder advisory groups Glass Lewis and Institutional Shareholder Services are both said to have raised concerns over Sorrell’s pay, up 40 per cent on the previous year, ahead of the company’s AGM on 9 June.
San Francisco-based Glass Lewis has recommended that shareholders vote against his remuneration, according to the Financial Times, saying it “far exceeds the compensation given to chief executives at similar firms”.
ISS has also criticised the amount he receives as “exceptionally high” although it stopped short of recommending investors reject the scheme.
Sorrell, who saw off a shareholder revolt over his £30m pay last year, has defended his pay package, arguing that he has personally invested in the company over the 30 years since he founded it.
A WPP spokesman told City PM : “Over 90 per cent of Sir Martin Sorrell’s remuneration in 2014 was performance based, the vast majority of which was derived from the five-year leap scheme. WPP achieved total shareholder returns of 172.5 per cent over the five-year period when the FTSE 100 rose only 21.3 per cent.”