Quarta given boost by shareholder groups as crucial WPP meeting looms

 
Josh Mines
BRITAIN-ECONOMY-RESULTS-STOCKS-WPP
WPP chair Roberto Quarta has been given a boost the day before the company's annual general meeting (Source: Getty)

WPP chairman Roberto Quarta has received backing from an investor advisor and one of its top shareholders the day before a crucial vote at the company's annual general meeting.

Hermes EOS told shareholders to support the reinstatement of Quarta, although it said it did not have enough evidence to assess whether former boss Sir Martin Sorrell's exit pay packet was appropriate.

Reuters reports that top 10 shareholder Harris Associates will vote to reinstate Quarta and the WPP board tomorrow.

It comes in a week when the heat has been cranked up on both WPP and Sorrell, as reports claimed to expose details of the company's investigation into its founder which led to him resigning in April.

Read more: Sir Martin Sorrell considers legal action against WSJ claims

An article from Sky News yesterday evening suggested that tomorrow's AGM could wind up being a stormy affair, with 20 per cent of investors likely to vote against Quarta's reinstatement.

Pauline Lecoursonnois, at Hermes EOS said:

Under the chairmanship of Roberto Quarta since 2015, the board started to become more effective and succession planning moved up its agenda. This allowed the board to deal with the recent abrupt departure of the chief executive.

We have therefore recommended our clients to support Mr Quarta’s re-election and all other agenda items except for the remuneration report. Given the lack of confirmed information about the reasons for the former chief executive’s departure, we do not believe we can assess whether his termination package is appropriate.

Other advisory groups have also weighed in on whether shareholders should decide to boot out Quarta at tomorrow's AGM.

Both Pirc and Glass Lewis told shareholders to vote against both the chair's reinstatement and Sorrell's pay packet.

Institutional Shareholder Services backed Quarta, although it raised concern with how the internal investigation was handled, so could not give backing to Sorrell's pay.

Read more: WPP chairman Quarta gets backing from influential City advisory group

The investigation into Sorrell's conduct was swept under the rug by the company last month. WPP says data protection rules stop it from publishing its findings.

Sorrell has argued that a non-disclosure agreement he signed with WPP means he is unable to comment on the nature of his exit from the firm he led for 33 years.

Shareholders will vote at WPP's annual general meeting tomorrow at 12pm.

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