WPP feared Sorrell might ‘throw toys out of the pram’

WPP was forced to ensure Sir Martin Sorrell did not “throw his toys out of the pram” when negotiating a new pay deal with the advertising tycoon, the firm’s chairman has claimed.

Roberto Quarta, who was made executive chairman in the wake of Sir Martin’s shock departure in April, said the board was conscious of shareholder anger following the 2016 annual meeting when a rebellion formed over the former boss’ mammoth £70 million pay deal.

“We went to work to basically put a new plan together, which is the one that we then rolled out that would have significantly reduced the payout,” the chairman said.

He was referring to a subsequent pay cut for Sir Martin to £48.1m, but there were also concerns surrounding the chief executive’s benefits, which prompted a benefit cap of £200,000 per year as well as a reduction in his entitlement for spousal travel.

“But at the same time though we wanted to ensure that Martin would not throw his toys out of the pram, so to speak,” he added.

“Now you can well imagine

– it’s the end of 2016, company’s performance is stellar – trying to have conversations with a chief executive who has already agreed to a reduction in total remuneration package and spousal travel.

“To then have him agree that we should also change terms and conditions of his contract, you can understand that was something we were working on.”

Mr Quarta stressed that Sir Martin’s employment contract had otherwise been sealed in 2008, pre-dating the current board.

Shareholders vented anger at yesterday’s annual general meeting over the fact that Sir Martin is in line to receive £14m from WPP following his departure, having received £48.1m the year before. He will also take nearly £20m in payouts from WPP over the next five years as part of an exit deal.

Asked why a full non-compete clause was never drawn up, the chairman said the board had run out of time when Sir Martin’s surprise departure took place. “We were working on but by the time this occurred we just weren’t there yet.”

WPP is instead leaning on confidentiality agreements to rein in any potential competition with Sir Martin, who earlier this month confirmed he was heading a new “multinational communication services business” named S4.