WPP Chief Sorrell Survives Shareholder Revolt Over Pay Package
Shareholders of advertising company WPP Plc protested Chief Executive Officer Martin Sorrell’s 70.4 million-pound ($102.5 million) pay, with about 33 percent of investors giving a thumbs-down to his compensation for last year.
Sorrell, Britain’s highest-paid CEO, has become the focus of investor concerns over U.K. executives’ pay during the current annual meeting season, in which a majority of shareholders of companies like BP Plc, Smith & Nephew Plc and Paysafe Group Plc have voted against remuneration arrangements.
The vote was the biggest protest against Sorrell’s compensation since 2012, when 60 percent of shareholders objected. The outcome is non-binding, but the 2012 vote prompted changes to WPP’s pay policies. Wednesday’s vote also follows a report this week revealing large ad agencies profiting from rebates they receive from advertisers, challenging the industry to make its practices more transparent.
Shareholder advisory groups like Hermes Equity Ownership Services Ltd., ShareSoc and the Local Authority Pension Group called for investors to oppose Sorrell’s pay, though ISS Proxy Advisory Services recommended supporting the package.
Sorrell received the payout based on the performance of WPP, the world’s largest advertising company. Most of the sum consists of an incentive plan linked to financial targets.
WPP, whose agencies include Ogilvy & Mather and Young & Rubicam, says the amounts paid to Sorrell and other company executives reflect the superior returns generated for investors. Sorrell’s compensation rose from about 43 million pounds a year earlier.
This year is the last under WPP’s current incentive plan. A new plan will cap Sorrell’s total annual compensation at 19.3 million pounds, starting with his 2017 pay.
WPP, along with other ad agency companies, is under fire from U.S. advertisers, which this week accused them of arranging rebates, which they neither disclose nor pass to their clients, when they buying large blocks of media.
A report commissioned by the New York-based Association of National Advertisers doesn’t name ad agencies or clients, but it throws a light on obscure practices in media buying, a source of high-margin profits for the industry.
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