The world’s top advertising mogul has shrugged off an investor revolt over his £30m pay. He claimed the Government would be happy if the shareholder vote in his favour were a political election result and insisted that his pay could not be compared to that of other City bosses.
Sir Martin Sorrell, the best-paid chief executive in the FTSE 100, said it was wrong to “make comparisons” because he built his company, WPP, from scratch – unlike many other City bosses.
Twenty-eight per cent of shareholders failed to back the WPP remuneration report and nearly 27 per cent failed to back future remuneration policy – a big protest by City standards.
A significant number of shareholders abstained to express their disapproval. Leaving aside those abstentions, 18 per cent opposed the remuneration report and 82 per cent were in favour at the annual meeting at The Shard near London Bridge.
Sir Martin, 69, told The Independent: “I think that [the 82 per cent backing] would be a vote the Government would welcome if it were an EU referendum or Scottish devolution. I think it is sufficient.”
WPP, the world’s biggest ad group, argues that Sir Martin’s pay is fair because it is performance-based. Nearly £23m of his £29.8m package came from long-term bonuses. His base salary has been cut by £150,000 to £1.15m and potential bonuses reduced.
However, Keith Jago, a small shareholder, said: “I wonder how anyone can be worth £30m when the UK is debating our minimum wage levels? Martin’s hourly rate works out at £24,000 an hour – 3,700 times the minimum wage.”
The Local Authority Pension Fund Forum claimed WPP’s bonus scheme still has an “excessive quantum” worth “more than 1,400 per cent of base salary”. LAPFF also complained of “complex salary and bonus packages that are not justified by performance and are out of step with shareholder and community expectations”.
Sir Martin could still earn a maximum of £19.3m in 2014.
This is just the latest revolt at WPP. Forty-two per cent failed to back the remuneration report in 2011 and 60 per cent opposed it in 2012. Even after the bonus scheme was reduced, 26 per cent failed to back the report a year ago.
“It’s part of a continuum,” said Sir Martin, who claimed some critics failed to realise his bonuses have soared in value in part because of WPP’s rising share price.
“You don’t go and analyse the investment I make in the company. You don’t analyse the impact and the movements in the share price – positively or negatively. You don’t analyse the fact that 100 per cent of my wealth is in this company. You just put that to one side and you make comparisons with other situations and say they are the same. But they aren’t.”
He suggested he was different from the majority of bosses of other listed companies. “When you found a company and you build a company, your attitude is different,” said Sir Martin, who has run WPP since 1986. “I’ve invested my money where my mouth is.”
The departing chairman, Philip Lader, prompted smiles when he insisted WPP was not overly reliant on Sir Martin and has a strong team. “It is an exaggeration to say the management of the company is 175,000 people reporting to an energetic fellow on a BlackBerry,” he said.
WPP has appointed a new head of its remuneration committee, John Hood.