Advertising veteran Sir Martin Sorrell could be faced with a shareholder revolt amid a backlash at his proposed pay packet at new firm S4 Capital.
Shareholder advisory groups Glass Lewis and ISS have both issued notes urging investors to vote down the company’s long-term bonus scheme.
In a report issued ahead of S4 Capital’s annual meeting later this month, ISS said it had a “number of concerns” about the pay plan, while Glass Lewis warned the proposal meant executives could pocket “unlimited remuneration”.
Sorrell, who set up the S4 Capital after leaving WPP, was paid £140,000 from May until the end of last year. But under the proposals the boss could pocket 15 per cent of the firm’s growth in market capitalisation, provided an annual growth target of six per cent is met.
Glass Lewis said the measures ran contrary to shareholder interests, as executives could receive compensation that was “not strictly tied” to company performance. Instead, it recommended that S4 Capital should set and disclose caps on all of its bonus plans.
S4 Capital said its top executives received salaries below the market average, and that its remuneration policy was performance-driven.
“The S4 Capital remuneration scheme and policy are consistent with the UK corporate governance provision of promoting long-term shareholdings by executive directors, aligned with long-term shareholders’ interests,” a spokesperson for the firm said.
It is not the first time Sorrell has found himself at the centre of a dispute over pay, and the ad boss successfully fended off a WPP shareholder revolt in 2015 after he took home more than £70m.
Earlier this year Sorrell pocketed £2.13m in shares from his former company as part of its long-term incentive plan.