Advertising giant WPP was today braced for another revolt over chief executive Sir Martin Sorrell’s pay after a big group of local authority pension funds and a shareholder advisory group declared their opposition.
It is thought as many as a quarter of shareholders could fail to back his £17.6 million pay deal at next week’s annual meeting — although that would be less dramatic than the near-60 per cent vote against seen a year ago.
The Local Authority Pension Fund Forum, which acts for UK public-sector pension funds, will vote against the remuneration report because Sorrell’s pay was still “exceptionally high”, despite changes to his bonus scheme.
LAPFF said it had particular “concerns” about the new, long-term incentive plan because Sorrell could earn up to 9.74 times salary — a high level for a UK chief executive.
PIRC, which advises City shareholders including LAPFF, made its own call for investors to oppose the remuneration report and bonus plan, saying the rewards were “excessive”.
Both organisations welcomed WPP’s decision to change the bonus scheme after last year’s massive revolt but said the board was still being too generous.
“We recognise that WPP has sought to change its remuneration policy,” said LAPFF chairman Kieran Quinn. “However, the scale of reward available, and paid in the past year, remains very substantial.”
However, WPP’s decision to cut Sorrell’s salary by £150,000 to £1.15 million — thus reducing his bonus payout — and other steps appear to have won round several other past critics. American shareholder advisory group ISS, which opposed WPP’s pay a year ago, has backed this year’s deal.
The Association of British Insurers has also issued an “amber-top”, alerting investors to the issue, rather than last year’s “red-top” call to reject the remuneration report.
Last year, 60 per cent failed to back Sorrell’s £12.9 million package. In 2011, WPP was hit with a 42 per cent revolt.
WPP owns agencies JWT, Ogilvy & Mather and AKQA. Clients include HSBC, Barclays, Unilever and Nike.
Next Wednesday’s meeting will take place in London for the first time since the group moved its tax base back from Dublin.
WPP today signed a major global partnership with social media site Twitter which allows the companies to collaborate and share data. “Twitter’s relevance continues to grow,” said Sorrell.