WPP Chief Sorrell to Receive Multi-Million Pay Package Despite Revolt--2nd Update
June 08 2016 - 8:54AM
Dow Jones News
By Nick Kostov
WPP PLC shareholders approved the pay package of Martin Sorrell
after the advertising group's founder and chief executive faced
another sizable revolt over his pay packet.
Mr. Sorrell's received GBP70.4 million ($102.4 million) in
compensation in 2015, up 65% on last year, a sum that some
shareholder advisory groups labelled "excessive" and "unacceptable"
ahead of the meeting.
At Wednesday's meeting, 33.5% of investors voted against the pay
package, excluding abstentions. Among most institutional
shareholders of U.K.-listed companies, the default vote is
traditionally cast in favor of management for remuneration reports.
Abstentions can be viewed as a milder form of protest.
John Hood, the head of WPP's compensation committee, said in the
company's annual report that "while the value of Sir Martin
Sorrell's award is very large, it was the result of an outstanding
set of returns to share owners." WPP's shares rose 16% in 2015.
Shareholder revolts over a number of issues, not least pay, have
become more common in recent years. A majority of Smith &
Nephew PLC and BP PLC investors, for instance, symbolically voted
against their executive pay packages for 2015, while Shire PLC said
investors holding 49% of votes opposed its board's remuneration
report.
"There's a broadly held view--perhaps not quite reflected by the
[WPP shareholders] vote--that this is an extraordinary amount of
money to give to one person," said Stefan Stern, Director of the
U.K.'s High Pay Centre, an independent think tank in London.
WPP said the size of Mr. Sorrell's pay was linked to the
formulaic application of a long-term incentive scheme that WPP
investors overwhelmingly backed in 2009.
Mr. Sorrell, who has led WPP for more than 30 years, received a
base salary of GBP1.15 million for 2014. His pay packet also
included a hefty long-term incentive stock award of GBP62.8 million
and a GBP4.3 million short-term bonus, as well as pension
contributions and other benefits.
In 2014. Mr. Sorrell paid back GBP274,000 which had been spent
on travel expenses for his wife, according to the company's annual
report. The company said it would no longer pays spousal travel
costs, adding that this had caused shareholder angst last year.
Ahead of the vote, Pensions & Investment Research
Consultants Ltd., a proxy adviser, told WPP shareholders to oppose
Mr. Sorrell's pay, while Institutional Shareholder Services Inc.
said shareholders should back it.
Separately, WPP said sakes trends had slowed slightly in April.
Comparable net sales--which strips out currency changes,
acquisitions and disposals--rose 3.1% in the first four months of
the year, compared with 3.2% in the first quarter.
Ian Walker and Nathalie Tadena contributed to this article
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
June 08, 2016 09:39 ET (13:39 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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