This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.theguardian.com/business/2016/jun/08/sir-martin-sorrell-pay-deal-faces-investor-revolt-at-wpp-agm

The article has changed 7 times. There is an RSS feed of changes available.

Version 2 Version 3
Sir Martin Sorrell at sharp end of investor revolt at WPP AGM Sir Martin Sorrell at sharp end of investor revolt at WPP AGM
(about 1 hour later)
More than a third of shareholders at the advertising giant WPP have refused to back the £70m pay package handed to its boss, Sir Martin Sorrell.More than a third of shareholders at the advertising giant WPP have refused to back the £70m pay package handed to its boss, Sir Martin Sorrell.
Including abstentions, 34.2% of WPP investors failed to support the company’s pay report at the company’s annual general meeting in London, while 65.8% backed it.Including abstentions, 34.2% of WPP investors failed to support the company’s pay report at the company’s annual general meeting in London, while 65.8% backed it.
The vote indicates a sizeable shareholder revolt, although it is does not match that seen at BP, where almost 60% of investors voted against the £14m pay package of its chief executive, Bob Dudley, after the oil group posted an annual loss of £3.6bn.The vote indicates a sizeable shareholder revolt, although it is does not match that seen at BP, where almost 60% of investors voted against the £14m pay package of its chief executive, Bob Dudley, after the oil group posted an annual loss of £3.6bn.
In April, Sir John Hood, chairman of the WPP remuneration committee, defended Sorrell’s £70.4m cash and shares package for 2015 as the “result of an outstanding set of returns to share owners” of the group, which owns advertising agencies JWT and Ogilvy & Mather. It is one of the biggest pay cheques in UK corporate history. Deborah Gilshan, corporate governance counsel at the Railways Pension Scheme, said at the annual meeting in London that pay at WPP was out of line with the interests of shareholders and other stakeholders in the company and was “a risk to its reputation and licence to operate” from society.
Asset manager Hermes, a WPP shareholder, said Sorrell’s pay was excessive and also expressed impatience with the progress made on succession planning for the 71-year-old. She added: “We continue to question the logic of the board and its compensation committee to [determine] pay to motivate, incentivise and retain the CEO and other senior executives.”
Investor advisory body Pirc had advised shareholders to vote against Sorrell’s pay package. It noted that his variable pay amounted to 58 times his £1.2m salary, while the pay ratio compared with the average employee at WPP was “highly excessive at 196:1”. He is the highest paid boss of any FTSE firm. WPP chairman Roberto Quarta told Gilshan: “Rest assured we hear your comments and your voice today and certainly we will take them into account as we ... consult at the end of the year.”
Hans-Christoph Hirt, the co-head of Hermes EOS, said: “Even considering the strong performance and pay practices at peers, the legacy equity incentive plan introduced in 2009 has once again led to what we regard as an excessive level of CEO remuneration for 2015. Another shareholder said questions on pay were pathetic and asked by small minded people. “It has all been agreed so I don’t know what they’re carping at.”
“We appreciate that a new remuneration policy was approved by shareholders in 2013 and that the legacy plan only has one more year to run. Nonetheless, we are highly uncomfortable with the 2015 quantum, not least in light of our historic concerns about board composition and the remuneration committee’s apparent lack of vigour and stress-testing when the legacy plan was devised.” Sorrell, the highest-paid boss of any FTSE firm, told the annual meeting that people forget that he reinvests his pay into WPP. Sir John Hood, who chairs WPP’s remuneration committee, said it would talk to shareholders to hammer out a deal.
Hirt is also concerned about who might succeed Sorrell, who he said had created “remarkable value” since setting up the company in 1985. “He is rightly regarded as one of the most successful entrepreneurs and business leaders in the world,” he said. Hood had previously defended Sorrell’s £70.4m cash and shares package for 2015 as the “result of an outstanding set of returns to share owners” of the group, which owns advertising agencies JWT and Ogilvy & Mather. It is one of the biggest pay cheques in UK corporate history.
Shareholders who voted against the pay package included Standard Life and Hermes. Hermes said ahead of the meeting that Sorrell’s pay was excessive and also expressed impatience with the progress made on succession planning for the 71-year-old.
Investor advisory body Pirc had advised shareholders to vote against Sorrell’s pay package. It noted that his variable pay amounted to 58 times his £1.2m salary, while the pay ratio compared with the average employee at WPP was “highly excessive at 196:1”.