WPP conceded for the first time this weekend, just days before the advertising giant’s general meeting, that its board could consider cutting chief executive Sir Martin Sorrell’s controversial pay package.
Chairman Philip Lader said the WPP board has exercised “the best commercial judgement” and believes it is doing what is best for shareholders.
But he said the board would be willing to continue its deliberations and consult with shareholders if Wednesday’s polls do not back the remuneration report.
Sorrell’s proposed pay package, which was hiked to £12.9m last year including a 30 per cent salary rise, has failed to impress WPP’s investors despite it being just his second pay rise in 10 years.
Most expect the remuneration report, which was passed by just 58 per cent of shareholders last year, to fail at this week’s general meeting.
A WPP spokesperson said the board would not necessarily tweak Sorrell’s salary down – it could be certain elements of the pay package that are upsetting shareholders – but it would not come to a decision until after seeing the results of Wednesday’s vote.
The spokesperson said to compare Sorrell’s salary, as the boss of a mega international company, to other UK chief executives’ was like comparing “apples and pears”.
A negative vote for the remuneration report would be very damaging for Sorrell’s leadership of the company and the job of Jeffrey Rosen, chair of the firm’s compensation committee.