Astonishing vanity of the £70m fat cat
As investors revolt, WPP boss insists he’s worth every penny
ADVERTISING tycoon Martin Sorrell battled a shareholder revolt as more than a third of investors voted against his pay packet, which tops £70m.
Some 34.2pc of investors failed to back the 71-year-old’s pay deal, one of the most damaging rebellions in the firm’s history.
But afterwards Sorrell launched an incredible defence of his pay, which is 196 times the amount earned by the typical employee at the giant advertising firm.
Sorrell, who founded the company in 1985, said: ‘Is there something wrong with building a company from two people to 194,000 people? I could argue, if the average number of people in a family is three, that amounts to 600,000 people dependent for their livelihood upon WPP. If there’s something wrong with that, then mea culpa. I feel very strongly about that.’
The revolt is the latest in a string of rebellions by shareholders, which have seen bosses at BP, Weir Group, Anglo American and Shire all delivered bloody noses.
Sorrell said that he has only once sold shares in the company, following his divorce in 2010.
His remuneration, which includes a bonus of £62.8m and amounts to 52 times his £1.2m salary, makes him the highest paid boss in the FTSE 100.
For 2015 the father-of-three, who lives in a £5m property in central London with his 43-year-old Italian wife Cristiana, amassed pensions contributions of £460,000 on top of his basic salary.
He got a short-term bonus of £4.3m and netted £1.5m in lieu of dividends on shares he put off taking in 1995. Perks for Sorrell amounted to £200,000.
At the AGM, held in the Pullman Hotel near London’s St Pancras station, several big City investors opposed Sorrell’s remuneration. Hans-Christoph Hirt, co-chief executive of Hermes, said it was excessive, and Euan Stirling, head of Standard Life, said: ‘We expect that is more than would be required to recruit, retain or motivate even someone with the redoubtable talents of Mr Sorrell.’
It followed guidance from advisory bodies including Local Authority Pension Fund Forum, ShareAction, PIRC and ShareSoc prior to the meeting which urged investors to oppose the pay deal.
It is not the first time Sorrell has received push-back from WPP’s shareholders. Four years ago his pay was met with opposition, with 60pc voting against it – the second biggest shareholder revolt ever.
Sorrell has overseen WPP’s rise to become the biggest advertising group in the world over 31 years, with Coca-Cola, Ford, HSBC and Vodafone among its clients.
His bonus covers a period when WPP’s value soared from £10bn to £20.6bn. Half of his pay for last year went to the taxman, while the other half was reinvested in WPP. Shares rose 0.1pc, or 1p to 1600p.