WPP slashes Sorrell’s package as investor ‘discomfort’ grows
ADVERTISING giant WPP today attempted to calm shareholders’ “increasing discomfort” over soaring executive salaries, by slashing chief executive Sir Martin Sorrell’s maximum pay.
In a move expected to be welcomed by a growing chorus of City investors demanding a crackdown in the AGM season, it revealed a series of cutbacks in its annual report.
Under proposals outlined today, Sorrell would see his potential payments under a five-year share plan to 2021 slashed. Coupled with cuts to short-term bonuses and pensions, his maximum package will fall to £13.2 million from £18.4 million a year.
Sorrell has been a lightning rod for corporate pay critics because of huge payouts under a previous more generous scheme, known as “Leap”.
The so-called Sage of Soho saw his 2016 pay fall to £48.1 million from £70.4 million after the value of that scheme plunged. It was replaced in 2013 with a less generous scheme that is now being further reduced.
Sir John Hood, chairman of the compensation committee, said: “Notwithstanding the company’s superior performance, we understand share owners’ increasing discomfort.” WPP joins a number of businesses — including consumer goods firm Reckitt Benckiser — which have recently cut executive pay and benefits after shareholder pressure. Sorrell will face his latest showdown with investors at the company’s annual meeting in June.
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