More than a fifth of shareholders protested against the FTSE 100's best-best paid boss's £48m pay package at WPP's annual general meeting (AGM) today.
Sir Martin Sorrell, chief executive of the advertising agency, is no stranger to shareholder revolts; last year some 34 per cent voted against his pay package for 2015.
And today, 21.3 per cent of shareholders voted against his pay or abstained, which is actually the lowest level of dissent over Sorrell's pay since 2010. One of the biggest backlashes was in 2012 when nearly 60 per cent of investors rejected his pay packet.
Hans-Christoph Hirt, head of Hermes EOS at Hermes Investment Management, said that while the firm recognised WPP's "strong performance under the CEO's leadership over many years", it was unable to recommend support for this year's package.
"Unfortunately, even considering the strong performance and pay practices at peers, the legacy equity incentive plan introduced in 2009 (Leap III) has once again resulted in what we regard as an excessive level of CEO remuneration for 2016," Hirt said.
Sorrell received £48.1m in total remuneration last year, down 31.6 per cent from the £70.4m he received in 2015.
The drop was attributed to the value of his long-term incentive scheme, known as Leap, falling dramatically.
Sorrell’s pay from Leap fell from £62.8m to £41.6m while his short-term performance related pay was also down from £4.28m to around £3m.
Hirt said: "We appreciate that a new remuneration policy was approved by shareholders in 2013. Nonetheless, 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."
A WPP spokesman said: “The advisory vote on compensation related to performance related remuneration determined by the Leap scheme which was subsequently replaced in 2013 with a long-term scheme with a reduced performance related opportunity. The binding vote on remuneration policy going forward gained shareholder support in excess of 90 per cent, reflecting the general acceptance of further changes introduced to the performance related elements of our executive pay.”
Questions were also raised about WPP's succession plans, with Hirt saying Sorrell "has created a great deal of value since taking over as chief executive of the company in 1986", so questions over succession planning were particularly important. Hermes said its engagement with WPP was focused on ensuring the firm's success "is appropriately safeguarded with an eventual succession proceeding smoothly".
WPP chairman Roberto Quarta said succession planning has become increasingly focused over the past year, with a "constantly refined list" of external candidates kept updated, while the board holds regular meetings with talent across WPP.