Under the scheme, which could be announced today, Martin Sorrell will invest pounds 6.1m in the company with the prospect of a pounds 31.3m payback in five years' time. Fourteen of the WPP's senior executives are expected to commit a similar amount between them for the same potential return.
The eventual share bonuses would be based on whether WPP, which owns advertising agencies such as J Walter Thompson and Ogilvy and Mather, meets demanding performance targets over the next five years. These targets are based on total returns to shareholders, not just share price performance.
Mr Sorrell, 54, and the executives would get the maximum payments of five times their initial investments if WPP comes first or second in a peer group of 15 global advertising and marketing-services companies.
Next month Mr Sorrell, who built up WPP from scratch in 1986, will be granted six million WPP shares as a reward for the previous five year payment scheme.
While the proposed package - which amounts to a bonus of pounds 500,000 a month for Mr Sorrell - could upset some left-wing Labour backbenchers, censure is unlikely since ministers have indicated that high boardroom pay is acceptable provided it is matched by exceptional executive performance.
The new scheme has been devised to compete with the pay of global rivals such as Omnicom, Young & Rubicam and Interpublic, thereby preventing a "brain drain" of top flight managers. Mr Sorrell, who in the 1980s described himself as a "dull, boring little clerk" with few excesses, is expected to deflect opposition to the package by keeping all of his pounds 80m fortune in WPP stock.
Over the past five years WPP stock has risen five-fold, placing it among the top five performers in the FTSE 100.Reuse content