Sorrell pay backlash refuses to go away as more than a fifth of WPP investors continue rebellion
WPP boss Sir Martin Sorrell is facing fresh questions in relation to his gargantuan £48m pay package amid fears that the advertising chief is turning the business into a one-man band.
Sorrell pay backlash gathers pace as more than a fifth of WPP investors join rebellion
Succession planning is set to become a key bone of contention at the group’s AGM as the board tackle searching questions as to the future of the group.
As a consequence of having seen his pay packet slashed from the £70.4m he received in 2015 Sorrell has managed to reduce discord since a shareholder revolt saw 60% come out against a then bumper pay packet.
Nevertheless Sorrell has failed to win over 21.3% of shareholders who continue to abstain or reject his remuneration package, although this is actually the lowest level of dissatisfaction recorded since 2010 when 21.29% of shareholders rebelled.
One of these investors, Hans Christoph-Hirt of Hermes, which holds voting rights of just over 1%, said: “We are highly uncomfortable with the 2016 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.”
In an attempt to offer succor to critics WPP has axed its Leap salary scheme which resulted in huge salary payouts, but Sorrell has warned that any tightening of the screw on his own wallet risks a ‘cascade down inside the organisation’ – disincentivising middle managers.
Sorrell said: “These were incentive plans that focused people on performance. The more relevant question is whether the new plans achieve the same result for shareholders. Whether this is the best way. We will see, time will tell whether this is the best way to ensure we get the best results.”
Sorrell has himself backed the new tighter remuneration regime, declaring them to be an improvement from a ‘governance point of view.’
Yesterday Sorrell singled out Amazon's Alexa as the leading edge of a new data-driven threat to the advertising industry.