SIR Martin Sorrell has bowed to shareholder pressure to take a cut to his base pay, following months of negotiations with WPP investors.
The chief executive of the world’s biggest advertising company, who saw shareholders representing 60 per cent of WPP vote against his pay packet last year, will see his basic salary for 2012 fall by about 10 per cent, with a pay scheme tied more closely to performance.
Last year, Sir Martin received a £1.3m salary – a 30 per cent hike – as part of a £6.8m pay packet that also included bonuses, share awards and £459,000 in benefits.
The package did not include another £5.6m worth of shares under a long-term incentive plan.
Although the vote – one of the biggest events in the so-called shareholder spring – was non-binding, the WPP boss has admitted that he misjudged the mood of shareholders.
The new agreement, which will be revealed in the advertising giant’s annual report later this week, comes after months of negotiations between WPP chairman Philip Lader and shareholders. Whatever package he receives will add to an £11m share issue Sir Martin received earlier this month under the company’s long-term share scheme.
“We have had a full and constructive consultation with shareholders representing over 40 per cent of equity and the annual report will reflect that,” a WPP spokesperson said.
On Friday, WPP announced that revenues in the first quarter of the year were 2.1 per cent up on the same period last year, with a strong performance in the UK and Latin America offsetting weak growth in Europe and North America.
Though performance disappointed the City, results were much better than Publicis Group, another advertising giant, which saw a six per cent decline in Europe and the UK.
WPP’s share price has risen by 16 per cent since the start of the year.