Shareholders vote against WPP boss pay package

 

Suggested Topics

Advertising boss Sir Martin Sorrell suffered a major rebuke today in one of the biggest pay revolts of the current "shareholder spring".

Some 59.5 per cent of proxy investor votes went against WPP's remuneration report, which includes a £6.8 million package for Sir Martin, which he has defended as a reward for "performance, not failure".

The vote, revealed at WPP's annual meeting in Dublin, is not binding and will not force WPP to reset its pay policy for last year.

Louise Rouse, director of engagement at investment campaigner FairPensions, who attended the meeting, said: "It is difficult to know whether the WPP board underestimated the level of shareholder anger or simply chose to ignore it."

WPP owns dozens of companies including public relations firm Ogilvy, communications agency RLM Finsbury and market research firm Kantar Worldpanel.

The backlash follows months of shareholder anger over executive pay with the likes of Aviva, Trinity Mirror, Barclays, William Hill, Xstrata and Premier Foods all facing significant votes against their pay reports.

The vote against the pay report is one of the largest this year, only being beaten by the level of dissent at Cairn Energy, Pendragon and Centamin.

Chairman Philip Lader, a former White House deputy chief of staff, told the meeting: "We take the remuneration report vote very seriously. We'll consult with many share owners and will then move forward in the best interests of our share owners and our business."

Sir Martin, who founded WPP in 1985 and has invested and co-invested millions of pounds into the company, has defended the deal as reflective of his performance, after the group reported bottom-line profits of £1 billion for the first time in 2011.

The businessman's pay package is made up of £1.3 million salary, £2 million annual bonus, £3 million deferred shares and other benefits.

On top of the annual remuneration, Sir Martin received nearly £6 million in shares last year, although these were awarded in 2006 and were closely-tied to performance targets, pension contributions and more than £1.3 million in dividend equivalents.

Shareholder advisory groups, including the Association of British Insurers (ABI) and Pensions Investment Research Consultants (Pirc), last week urged members not to back the advertising group's "excessive" remuneration report.

Pirc said it was concerned by "excessiveness and the balance between reward and incentive".

Writing in the Financial Times last week, Sir Martin issued a robust defence of his pay, warning that if Britain wanted high achievers in the private sector, it needed to pay competitively.

He told the paper: "The compensation debate in the UK now seems to have shifted from undeserving bankers paid for failure and from payment for performance to what is fair pay."

Other casualties of the so-called shareholder spring have included Andrew Moss, who quit as chief executive of Aviva, and Sly Bailey, who will leave her post as boss of Trinity Mirror.

Business Secretary Vince Cable is currently drawing up plans to give greater power to shareholders but is understood to be considering watering down proposals for a binding annual vote in favour of a poll every three years.

It had been feared that a binding annual vote would make investors less inclined to protest in case they destabilised management teams and would add to bureaucracy.

PA

Independent Comment
blog comments powered by Disqus
Career Services

Day In a Page

The 50 Best beachwear

The 50 Best beachwear

The hottest summer gear for men and women
Still standing: George Galloway reveals why his staunchly Leftist outlook is still invariably right

Still standing: George Galloway

Written off, ridiculed, wrongly accused of taking bribes the honourable member for Bradford West, has never bowed to the critics.
How will Daniel Radcliffe's fans react to his latest turn - as a damaged, drug-taking Beatnik poet?

Daniel Radcliffe as drug-taking Beatnik poet

His decade as the boy wizard may be over, but that hasn't hexed Daniel Radcliffe's enchanted life.
For whom the bell tolls: £20m 'Memo' project takes shape on Dorset's Jurassic coast

'Memo' project takes shape on Dorset coast

It started as a stonemason's visionary idea – to commemorate all the species that have ever existed and are now extinct.
Just add sunshine: Bill Granger's Turkish delights

Just add sunshine: Bill Granger's Turkish delights

Turkish cuisine is perfect for those long, sociable weekend meals with friends. It's just a shame that money can't buy the key ingredient.
Objets czar: David Usborne’s collection of myriad objects is quite the mystery

Objets czar: David Usborne’s collection of myriad objects

To others, they're junk. To David Usborne, they are his life: useful gizmos, mysterious thingamajigs and anonymous articles that dominate his home.
The iron ore lady: Why the world's richest woman is mired in controversy

World's richest woman: Gina Rinehart

Family feuds, attempts to control the Australian media and bitter public disputes are keeping the mining magnate in the headlines.
We just click: How Lego keeps building on its success

How Lego keeps building on its success

This year, Lego announced record profits. Gerard Gilbert visits its Denmark HQ.
The other bits: Mark Hix creates delicious and economical meals with cheaper cuts of meat

Mark Hix cooks with cheaper cuts of meat

Our chef creates delicious and economical meals on a budget
Strokes of genius: How to create summer's bold make-up look

Strokes of genius: Summer's bold make-up

From coral lips to fly-away fringes, make-up artist Kim Brown and hair stylist Richard Scorer reveal how to create the look
Marking his territory: Kilian Hennessy creates fragrances designed to provoke the senses

Marking his territory: Kilian Hennessy

The perfumer creates fragrances designed to provoke the senses
Photo essay: Britain's 1948 Olympians today

Britain's 1948 Olympians today

Photo essay
The top five E3 2012 triumphs: From Ubisoft's suite of titles to Dishonored and The Last of Us

The top five E3 2012 triumphs

The games and moments that left us grinning like the Cheshire Cat
The green movement at 50: Can the world be saved?

Can the world be saved?

Population growth and climate change are the big problems facing the earth in the next 50 years. But are there any solutions?
France: Will xenophobia go mainstream?

France: Will xenophobia go mainstream?

In the beautiful Rhone delta, John Lichfield visits a village where a dangerous new political landscape is taking shape