Sir Martin Sorrell has stated he will make no apology for his recent £63m bonus pay package which is reported to have angered many WPP shareholders.
The WPP chief executive discussed the issue of potential shareholder revolts over his executive pay in a recent interview with CNBC and argued that his bonus was based on commercial success, which the rest of the company’s employees also benefited form.
Last Month, at a WPP AGM meeting it was announced that Sir Martin would receive a £63m bonus following the release of shares from a long-term bonus scheme triggered by the company’s strong performance.
The announcement is said to have angered many of WPP’s shareholders who previously pressured the company into scrapping its long-term bonus scheme in 2012.
In the CNBC interview conducted by financial journalist, Steve Sedgwick, Sir Martin outlined the basis of his defence for his huge bonus on the grounds that his pay was “geared to the success of the company,” and added that it was “pay for performance”.
“I continue to hold in the company, so every time the company does well, I benefit. And of course, a large number of other people – because I'm not the only one involved in these plans – and every time we do badly, we all suffer.”
Sir Martin also pointed to WPP’s share price, which has risen from £6.60 in 2011 to its current rate of £16.60. The 71 year-old founder of the advertising giant said his share award – which is topped up by a £1.15m salary – was “voted through by shareholders by considerable majorities”.
“The fact is, those plans were put in place, they were voted on, they were approved. The only reason the plans have resulted in what they’ve resulted in is because the company has done well,” he said
The £63m figure is expected to increase to around £70m, when WPP publishes its annual report later this month, which will include Sorrell’s salary and other payments on top of the shares.