WPP HAS bowed to shareholder pressure to cut its chief executive Sir Martin Sorrell’s pay.
The advertising giant announced yesterday that Sir Martin will take a £150,000 cut to his base pay, and that WPP will introduce a new long-term incentive plan after scrapping the previous version.
The effect of the new proposals will be that Sir Martin’s pay plan is around a third less generous than the one he had in 2011 and a fifth less generous than last year, although the total amount is dependent on the company’s performance. In 2012, the chief executive took home £17.6m, made up largely of £11.4m from the long-term incentive scheme.
If WPP meets expectations, Sir Martin will earn £7.6m, although the total package could be anywhere from £3.7m to £32.9m.
The new package will have to be approved at WPP’s annual meeting in June, and sources at the firm said they were confident of a healthy majority.
Sir Martin’s pay has been a major point of controversy after investors representing 60 per cent of shares opposed it last year.