WPP shareholders reject Sir Martin Sorrell's £6.8m pay report
"Message... was unambiguous and cannot be ignored," says one major shareholder
Fifty-nine and a half per cent of shareholders in the advertising firm WPP have rejected the £6.8m pay plan for its chief executive Martin Sorrell. Twenty-one per cent of shareholders also voted against relection of Jeffrey Rosen, the chair of the company's compensation committee. Philip Lader, the chairman of the company, said that the board took the vote "seriously", adding "We’ll consult with many share owners and we’ll them move forward in the best interest of our share owners and our business."
Sorrell had been awarded a 30 per cent rise in his basic salary, to £1.3m, but an additional change to the way bonuses are awarded at the company lifted the maximum payout to 500 per cent from 300 per cent. Sorrell was awarded a 385 per cent bonus for 2011, lifting his total salary to £6.8m (around £0.5m was allocated to neither bonus nor salary).
Defending his high pay, Sorrell highlighted the fact that he was returning cash to shareholders (the dividend payout ratio has reached 35 per cent) and that he had taken very little money out of the company, saying that "almost all" of his net worth was tied up in it. He also addressed criticisms of the company, telling shareholders that:
We’ve had a very strong new business run, we’ve had a number of major new team assignments in the last four to six weeks, and we are making some progress in consumer insight although the Euro crisis is becoming more concerning.
For the first four months of the year, WPP reported like for like sales up 4 per cent, with growth in BRIC markets up 14 per cent. Despite this, shareholders are resolute that their voice will be heard. Standard Life, one of the major shareholders who voted against Sorrell's pay, said:
The message from shareholders was unambiguous and cannot be ignored.