The short knight, the tall pay and an investor rebellion

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The Independent Online

For comedy purposes only, we return, with great reluctance, to Sir Martin Sorrell. Here's the man some call June 21st – that's the shortest (k)night – discussing the fuss over his gigantic pay: "We understand what people are concerned about and the board will be consulting widely with shareholders to find out specifically what they have in mind."

Sir Martin is speaking here as if the row is some mysterious business, its providence and meaning beyond the perception of a mere chief executive. We'll commission a report! A full and thorough investigation!

A recap: the WPP boss saw 60 per cent of normally compliant City investors rebel against his £13m pay deal for 2011, a year when the shares fell by 14 per cent.

So specifically what they have in mind is this: they're being ripped off, and they would like it to stop. It is in the way of executive pay deals that even this extraordinary rebuff is non-binding, and of course they didn't actually vote to kick him out. So in theory, and perhaps in practice, he can keep being awarded similar amounts no matter what happens to shareholder returns.

Over 10 years, WPP shares are pretty much flat, which does suggest that the investor who has done best from WPP is Sir Martin Sorrell.

There isn't a firm definition of excessive executive pay. But it seems fair to suggest that it is rather like pornography. You know it when you see it.

An apology: that's all we want to hear

Another day, another moan from the banking lobby (for bankers, a score-draw must be treated as a crushing defeat, even if they are privately chortling into G&Ts and wondering how they got away with it again).

The Vickers proposals to stop banks being such a risk to the rest of us either go too far or not far enough depending on taste, but given what the banks owe the public, a period of silence from them is long overdue either way. Sorry and thank you, is pretty well all we should have to listen to them say for some time yet.

One of the complaints from the banks is that because the reforms cost so much to implement and because it makes bank funding more expensive, it cuts off loans to entrepreneurs and strangles the economy.

But if that's true, it must in turn also save the taxpayer billions in lower government funding costs.

That the Bank of England is buying so many UK government gilts is one reason why UK bond yields are so low. But Vickers is surely another reason why UK bond yields are meagre. The debt markets understand that the Government will no longer be on the hook for a large bank failure.

So Vickers will save the taxpayer money, whatever the bankers say.

What WPP's City investors have in mind is: they're being ripped off and they would like it to stop