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
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own