WPP chair blasts critical shareholders
Philip Lader defends Sir Martin Sorrell's £13m pay package days ahead of vote by investors
Sunday 10 June 2012
WPP chairman Philip Lader has blasted some of the advertising giant's shareholders, saying they have a "deep misunderstanding" of the controversial £12.9m pay deal for chief executive Sir Martin Sorrell.
Mr Lader stoked the row, ahead of Wednesday's shareholder vote, as he insisted the board had used its "best commercial judgement" to reward the boss of the world's biggest advertising group.
He told The Independent on Sunday: "There is a deep misunderstanding about the need for a global company to recruit and to retain top talent in the context of international competition and compensation practices."
Mr Lader, a former US ambassador to London, said that some shareholder advisory groups such as ISS, which opposes the WPP remuneration report, have been inconsistent because they have not rejected similar deals at rival ad groups.
He said: "It is curious some advisory groups will hold our smaller competitors to different compensation standards because they are US-based rather than WPP which is London Stock Exchange-listed. We compete for talent internationally."
Mr Lader did not name any competitor but it is thought he was referring to Omnicom and Interpublic in America and Publicis in France.
A huge row has broken out since WPP first said it was boosting Sir Martin's base salary by 30 per cent to £1.3m – the first increase since 2007 – and raising his potential long-term bonus to 500 per cent of salary. Tensions rose further after Sir Martin made a series of defiant media appearances last week, seeking to avoid being the latest scalp in the "shareholder spring" that has seen investors rebel against pay.
This also follows a row at WPP last year when almost 42 per cent of shareholders voted against the remuneration report, mainly because of a big hike for digital boss Mark Read.
Louise Rouse, of the campaigning group Fair Pensions, who plans to speak at the WPP annual meeting in Dublin, believes shareholders should vote against the report. "Everything Sir Martin says indicates he feels shareholders who are objecting to his pay are wrong and the company won't listen to what shareholders say, which-ever way they vote," said Ms Rouse.
When asked if he would consider his own position if a majority votes against, Mr Lader replied: "We shall examine the vote on the remuneration report as well as the votes on other resolutions and on the directors, then consult closely with shareholders."
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