Sorrell’s £48m pay backlash

WPP came under fire for excessive boardroom pay again yesterday as over a fifth of its investors choked at a £48million package for chief Sir Martin Sorrell.

The world’s biggest advertising agency had sought to defuse shareholder anger over its remuneration policy by introducing a less-generous arrangement for Sorrell, pictured, who founded the business more than 30 years ago.

His 2016 package is down by nearly a third on the £70.4million he pocketed in 2015.

That was opposed by 34 per cent of investors.

This time, 21.3 per cent either opposed or abstained at yesterday’s annual meeting.

Just under 10 per cent voted against or failed to back a new policy, which is expected to pay out about £19million a year, potentially dropping to £13million from 2021.

Shareholders also urged WPP’s board to step up efforts to ensure a smooth transition when Sorrell eventually retires.

Ashley Hamilton Claxton, corporate governance manager at Royal London Asset Management, which holds a 0.48 per cent stake worth £106million, voted against WPP’s “excessive” executive pay, while acknowledging the reduction in long-term bonuses and incentives as “a step in the right direction”. She said: “There is no doubt that WPP has become the media powerhouse it is today thanks to the hard work and dedication of Sir Martin Sorrell. The question for investors is how the business will look when he, inevitably, retires.

“We have pressed the chairman into making real progress with succession planning. We are pleased that the board is taking this task seriously, by conducting more rigorous sourcing of potential internal candidates from group companies. Planning for succession is, however, still the biggest risk facing the company in our view and there is still work to be done to assure shareholders.”

Deborah Gilshan, governance director at 1.5 per cent investor Standard Life Investments, said: “Unusually, the CEO’s service contract may be terminated by either the company or Sir Martin without any notice. We suggest that the board considers what lead time would be required to ensure an orderly succession.”

WPP shares fell 45p to 1676p as it announced revenue was up 0.7 per cent over the first four months compared with Jan-Apr 2016 but slightly down from the 0.8 per cent achieved in the first three.