James Moore: As WPP shows, it's so easy to pacify the City
Outlook There was more evidence of the City's disconnect with the wider populace yesterday when institutional investors approved WPP's remuneration report for a year in which it paid chief executive Sir Martin Sorrell £17.6m.
It is true concessions were made – a cut to his basic salary and to his bonus, plus the imposition of a more stretching share scheme to replace the grotesque Leadership Equity Acquisition Plan. But what that all amounts to is fiddling around the edges.
Sir Martin's extraordinarily generous package has merely been replaced by a slightly less extraordinarily generous package. He and his allies on the WPP board have effectively managed to buy off the City's investment community, which has decided that making an issue about this sort of thing is all too much trouble.
There was a still a protest vote – just over a quarter of investors either voted against the remuneration report or abstained – but the WPP board will feel it has done enough.
This year has seen just one vote against a remuneration report, and that was only in the particularly egregious case of Afren, the Africa-focused natural resources group.
As I highlighted yesterday, its directors had been thumbing their noses at investors for years, and shareholders could hardly ignore a special bonus for the chief executive plus the millions he and two senior colleagues stand to make from a co-investment in Afren's part-owned Nigerian business they didn't bother to tell shareholders about.
Afren will want to avoid a second defeat in a row, and has again promised investors change. It could do worse than taking a leaf out of WPP's book, which has demonstrated what it takes to quieten down the City: not much.
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