WPP chief Sir Martin Sorrell left stunned by revolt over £13m pay

Sixty per cent of ad giant's shareholders vote against bumper package for boss

The advertising giant WPP is reeling after 60 per cent of shareholders voted against its chief executive Sir Martin Sorrell's controversial £13m pay deal.

While yesterday's revolt was expected, the full extent appeared to stun the board directors as they watched the results appear on TV screens at the annual meeting in Dublin.

This is just the latest big vote against pay at a top FTSE 100 company after similar protests at Aviva, Cairn Energy, Pendragon and Trinity Mirror in what is being dubbed the Shareholder Spring.

Sir Martin, one of Britain's most respected captains of industry, looked subdued and grim faced.

Jeffrey Rosen, the chairman of the remuneration committee, wore a particularly anguished expression. Nearly 22 per cent of shareholders voted against his re-election. Two other non-executives, Koichiro Naganuma and Ruigang Li, faced votes against of nearly 30 per cent. But Sir Martin won the backing of 98 per cent.

But investors were furious about his package because it included a 30 per cent rise in his basic salary to £1.3m and an increase in his long-term bonus to 500 per cent of salary.

Several influential shareholder advisory groups, including ISS and Pirc, recommended a vote against.

Close to 42 per cent of shareholders opposed the remuneration report last year, when anger was focused on the pay of digital boss Mark Read.

Louise Rouse, of the pressure group Fair Pensions, who spoke from the floor, asked the directors why "in the light of the warning that shareholders issued last year, we're facing another significant protest vote?" No other shareholder spoke as few had travelled to Dublin, where WPP relocated for tax reasons in 2008.

A Pirc spokesman said: "It is very important that, as a high-profile FTSE 100 company, WPP responds constructively to the vote. This is a key moment in the relationship between shareholders and companies over top pay."

Votes at UK-listed companies are non-binding but the result was still a huge embarrassment for the world's biggest advertising group.

WPP, whose agencies give public relations and marketing advice to hundreds of top companies, admitted that it had failed to communicate effectively with shareholders.

The chairman, Philip Lader, a former US ambassador to London, closed the AGM by saying: "We take the remuneration report vote seriously.

"We'll communicate with many shareholders and we'll move forward in the best interests of our shareholders and the business."

Mr Rosen said: "I think if we take anything away from this, it is to have more continuous discussions with shareholders."

He added: "This is an economic environment in which it is particularly important and difficult to formulate the right long-term policies for the company in terms of compensation."

Sir Martin made no comment on the pay row in a 30-minute presentation, but noted pointedly how the group's profits and shareholder value have surged during his 27 years at the helm.

WPP argues he deserves his pay after building the group from scratch in 1985 into a £10bn business, which owns agencies such as Ogilvy & Mather and J Walter Thompson.

The company claims some shareholder advisory groups are inconsistent because they have criticised Sir Martin's pay but have been happy to see bosses at rival US ad groups earn similar-sized packages.

v

Ad man: Boss with 'skin in the game'

Sir Martin Sorrell is likely to have made well in excess of £200m during his 27-year reign at WPP.

He is worth £174m, according to the 2012 Sunday Times Rich List, which estimated his wealth had risen from £148m a year earlier.

Sir Martin's controversial pay last year was £13m.

His basic salary rose from £1m to £1.3m, with £459,000 in benefits such as car and spouse travel. But his total package was worth much more because of both short-term cash bonuses and long-term share awards, which take five years to vest.

WPP says his pay is aligned with the interests of the £10bn company as Sir Martin co-invests his own money alongside the shares he receives.

Sir Martin, 67, owns around 1.4 per cent. "I have skin in the game," he likes to say.

When he split from his first wife, Sandra, the 2005 legal settlement cost him £30m.

He took over WPP in 1985 and was already wealthy after serving as finance director for Saatchi & Saatchi in its heyday.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory
Ashes 2015: Alastair Cook not the only one to be caught in The Oval mindwarp

Cook not the only one to be caught in The Oval mindwarp

Aussie skipper Michael Clarke was lured into believing that what we witnessed at Edgbaston and Trent Bridge would continue in London, says Kevin Garside
Can Rafael Benitez get the best out of Gareth Bale at Real Madrid?

Can Benitez get the best out of Bale?

Back at the club he watched as a boy, the pressure is on Benitez to find a winning blend from Real's multiple talents. As La Liga begins, Pete Jenson asks if it will be enough to stop Barcelona
Athletics World Championships 2015: Beijing witnesses new stage in the Jessica Ennis-Hill and Katarina Johnson-Thompson heptathlon rivalry

Beijing witnesses new stage in the Jess and Kat rivalry

The last time the two British heptathletes competed, Ennis-Hill was on the way to Olympic gold and Johnson-Thompson was just a promising teenager. But a lot has happened in the following three years
Jeremy Corbyn: Joining a shrewd operator desperate for power as he visits the North East

Jeremy Corbyn interview: A shrewd operator desperate for power

His radical anti-austerity agenda has caught the imagination of the left and politically disaffected and set a staid Labour leadership election alight
Isis executes Palmyra antiquities chief: Defender of ancient city's past was killed for protecting its future

Isis executes Palmyra antiquities chief

Robert Fisk on the defender of the ancient city's past who was killed for protecting its future