RTISING giant WPP yesterday closed ranks around its chief executive Sir Martin Sorrell, who is fending off a shareholder rebellion over his 30 per cent rise in basic pay and £12.9m overall payout for last year.
Writing in today’s City A.M. Jeffrey Rosen, chairman of WPP’s compensation committee, said the firm “believes in rewarding performance” and that Sorrell’s proposed pay package is “wholly aligned with shareowners”.
“We have benchmarked primarily against our international competitors but also gone further in respect of ensuring as high a percentage of the package as possible is in the form of shares,” he writes.
Contrary to reports elsewhere, City A.M. understands that WPP has no plans to list the company outside London, even though UK shareholder votes on executive pay are set to become binding as part of the government’s Business and Enterprise Bill.
The row over the decision to increase Sorrell’s base pay to £1.3m has angered the board, which points to a 18.5 per cent increase in last year’s pre-tax profit to a record £1bn.
It is the first increase to the chief executive’s base salary since 2007 and the board emphasises that the firm’s shares have outperformed the rest of the FTSE 100.
But advisory group ISS, which represents around 20 per cent of shareholders, says it will continue to campaign for the remuneration report to be rejected.