AIGNING group FairPensions is the latest critic to speak out against Sir Martin Sorrell’s contentious £12.9m pay package, as tensions mount ahead of WPP’s annual meeting tomorrow.
Louise Rouse, director of engagement at FairPensions, said yesterday: “We’re urging shareholders to vote against WPP’s remuneration package because it contains a number of examples of unacceptable practice including an excessive potential bonus.
“Equally worryingly, WPP has displayed blatant disregard of shareholders views on the company’s pay policies by awarding salary rises.”
In WPP’s annual report, Jeffrey Rosen, the chairman of its compensation committee, highlighted that 2011 was a record year for the advertising giant and said the rise in Sorrell’s compensation is only the second time in the last 10 years his pay has been changed.
But Rouse told City A.M.: “Those arguments are not convincing. You can’t restrain pay in certain years and then give it in one lump sum every few years. We think – and it’s possible a majority of shareholders will agree – that Sorrell is being paid too much for his managerial role.”
The vote at tomorrow’s general meeting is not binding, but reports over the weekend suggested a significant majority vote against Sorrell’s pay could prompt the board to reconsider the chief executive’s compensation.
Sorrell’s pay last year included a £1.3m salary, a £2m cash bonus, just over £1m in pension contributions and benefits as well as £8.6m from various share awards and holdings.
In Friday’s edition we incorrectly referred to WPP’s financial restructuring as having taken place in 2002. We are happy to confirm that it was in fact in 1992 and that it is now 20 years since Jeffrey Rosen, chairman of WPP’s compensation committee, undertook any financial advisory work on behalf of WPP.