Pound’s fall helps profit at ad giant WPP rise to £2BN
ADVERTISING giant WPP is set to report a sharp rise in annual profits to almost £2billion this week, partly as a result of the pound’s slump.
But the profits boost will not lift the pay of chief executive Sir Martin Sorrell, who is expected to pocket far less than last year’s £70million.
The firm, which numbers HSBC, Vodafone and Ford among its worldwide clients, has benefited from sterling’s fall against the dollar following the EU referendum, since it makes much of its income in the US, where it owns agencies including J. Walter Thompson and Young & Rubicam.
Investment bank Numis said WPP was likely to report profits up 22 per cent to £1.97 billion for the year to the end of December, 2016, on sales of more than £12 billion.
WPP gets nearly 40 per cent of its income in dollars and sterling’s fall has boosted this by 9 per cent, said Numis.
Sorrell has faced years of controversy over his pay, which last year topped £70million including £63million from a bonus scheme, making it one of the biggest pay packets ever awarded to a FTSE100 boss. His pay will be revealed later this year, but the contribution from the bonus scheme is likely to be considerably less than last year’s record sum.
WPP scrapped the scheme in 2012 after investors voted against it and this is the last year it will pay out before it is replaced. Bonuses depend on the number of WPP shares put into the scheme by executives, who are then awarded a multiple of the shares based on the firm’s performance.