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| WPP faces mounting shareholder unrest over Martin Sorrell's pay | WPP faces mounting shareholder unrest over Martin Sorrell's pay |
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| Shareholder unrest over Sir Martin Sorrell's £17.6m remuneration is mounting ahead of WPP's annual meeting, with a body representing 56 UK public sector pension funds calling on investors to vote against the company's remuneration deal and share plans next week. | Shareholder unrest over Sir Martin Sorrell's £17.6m remuneration is mounting ahead of WPP's annual meeting, with a body representing 56 UK public sector pension funds calling on investors to vote against the company's remuneration deal and share plans next week. |
| The Local Authority Pension Forum, which controls a stake of between 1% and 2% in WPP, said that it had not bought into the package of cuts that Sorrell has said he will accept to his remuneration from this year. | The Local Authority Pension Forum, which controls a stake of between 1% and 2% in WPP, said that it had not bought into the package of cuts that Sorrell has said he will accept to his remuneration from this year. |
| It is also understood that Pirc, the influential shareholder group, has issued a report to clients also advising a vote against the remuneration report and new shareholder plan. | It is also understood that Pirc, the influential shareholder group, has issued a report to clients also advising a vote against the remuneration report and new shareholder plan. |
| The cuts, which include a £150,000 drop in base salary and a 20% reduction in potential bonus pay out, were unveiled by WPP following months of negotiations with shareholders after a humiliating voting defeat on pay at the company's 2012 annual general meeting. | The cuts, which include a £150,000 drop in base salary and a 20% reduction in potential bonus pay out, were unveiled by WPP following months of negotiations with shareholders after a humiliating voting defeat on pay at the company's 2012 annual general meeting. |
| LAPFF said that it welcomed WPP's effort to improve pay practices but that the "quantum of payments made to executives, and potentially payable in future, is considered excessive". | LAPFF said that it welcomed WPP's effort to improve pay practices but that the "quantum of payments made to executives, and potentially payable in future, is considered excessive". |
| It is recommending that its members vote against WPP's remuneration report and the new long-term incentive plan at the annual meeting next Wednesday. | It is recommending that its members vote against WPP's remuneration report and the new long-term incentive plan at the annual meeting next Wednesday. |
| "We recognise that WPP has sought to change its remuneration policy, following shareholder rejection of the policy in 2012," said Kieran Quinn of LAPFF. "However the scale of reward available, and paid in the past year, remains very substantial." | "We recognise that WPP has sought to change its remuneration policy, following shareholder rejection of the policy in 2012," said Kieran Quinn of LAPFF. "However the scale of reward available, and paid in the past year, remains very substantial." |
| There is expected to be some unrest at next week's AGM, however WPP is almost certainly not going to face the level of shareholder revolt it encountered in 2012 when its resolutions on pay were voted down by a majority of investors. | There is expected to be some unrest at next week's AGM, however WPP is almost certainly not going to face the level of shareholder revolt it encountered in 2012 when its resolutions on pay were voted down by a majority of investors. |
| Shareholder advisory service the Association of British Insurers has issued an "amber top" advisory report on WPP ahead of the meeting. | Shareholder advisory service the Association of British Insurers has issued an "amber top" advisory report on WPP ahead of the meeting. |
| The amber top is understood to flag issues at WPP including executive remuneration, however it has fallen short of a "red top" report which is likely to have caused many investors to vote against WPP's remuneration resolutions. The ABI does not explicitly tell investors how they should vote. | The amber top is understood to flag issues at WPP including executive remuneration, however it has fallen short of a "red top" report which is likely to have caused many investors to vote against WPP's remuneration resolutions. The ABI does not explicitly tell investors how they should vote. |
| In addition, proxy voting firm Institutional Shareholder Services, a consultancy that advises about 20% of WPP's shareholders, is thought to have advised investors to back WPP. | In addition, proxy voting firm Institutional Shareholder Services, a consultancy that advises about 20% of WPP's shareholders, is thought to have advised investors to back WPP. |
| Last year ABI and ISS issued reports against backing WPP. | Last year ABI and ISS issued reports against backing WPP. |
| Senior WPP executives are thought to be quietly confident that months of negotiations with shareholders have paid off, with the ISS and ABI reports indicative that levels of unrest towards remuneration levels are much reduced this time. | |
| Manifest, which provides research into proxy voting issues, has said the changes to Sorrell's pay are "merely cosmetic". Its report on WPP gives the company's remuneration policy a D grade, which means it is of serious concern. | |
| "Manifest considers these changes to be merely cosmetic as the concerns regarding overall quantum remain," said Sarah Wilson, chief executive of Manifest. "The chief executive's salary and other remuneration components have been reduced but still remain one of the highest in the FTSE 100 Index. This is not reward for long-term, sustainable corporate success and business achievement but short-term windfall gains." | |
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