Seventh year of opposition
Fifth of investors oppose Sorrell’s £48m pay
A fifth of shareholders in the advertising giant WPP voted against chief executive Sir Martin Sorrell’s £48m pay package.
It was the seventh consecutive year that more than 20% objected to the remuneration deal for the company’s boss since then has earned £210m. He remains the highest-paid chief executive of any FTSE firm.
Last year 34% of investors refused to back his pay deal of £70.4m – the biggest in UK corporate history.
Conservative party leader Theresa May has pledged a crackdown on corporate pay.
Sir Martin has defended his rewards, arguing that they reflect his work building the world’s biggest advertising company.
But institutional funds, including Standard Life Investments, Royal London Asset Management and Hermes were among the 21.3% who either voted against or abstained at Wednesday’s AGM.
Hans Christoph-Hirt of Hermes, which represents investors holding around 1% of WPP voting rights, said he was “highly uncomfortable” with Sir Martin’s latest pay deal, “not least in light of our historic concerns about board composition and the remuneration committee’s apparent lack of vigour and stress-testing when the legacy plan was devised”.
Ashley Hamilton Claxton of RLAM said: “Executive pay at WPP continues to look excessive.
“Whilst we acknowledge that the reduction in the total long term bonuses and incentives available to executives under the new remuneration policy is a step in the right direction, the sheer scale of these remains exceptionally high, at over nine times the salary for the CEO.”
It was the third year in a row that Standard Life Investments had sent a representative to express its concerns, particularly about succession planning. Sir Martin has led the company since he founded it in 1985.
Deborah Gilshan, stewardship and governance director at the company, which owns 19 million shares equal to a 1.5% stake, said: “As a long term share owner in WPP, we acknowledge the success that Sir Martin Sorrell and all of the team at the company, past and present, have achieved and the ensuing benefits of that success to our clients.
“Critical to that success continuing is an orderly management succession, especially for the role of CEO. This remains the key governance risk to our long term investment in WPP. As another annual meeting passes, the time to address succession for the CEO shortens and the necessity to do so becomes more pressing.”