Shareholders approve Sorrell package

Shareholders of WPP, the advertising company, yesterday approved what may be the richest remuneration package of any UK publicly-quoted company, voting in favour by a margin of three to one.

While the precise size of the pay package is still the subject of disagreement, Martin Sorrell, group chief executive, could earn between pounds 24m and pounds 29m over five years, provided the company's stock rises to 304p and earnings per share increase by at least the rate of inflation plus 1 percentage point.

The total return to shareholders (share price increase plus dividends) must also beat the average total return index of the FT-SE 100.

Mr Sorrell would earn considerably less at lower share price levels of 265p, 230p and 180p, and only his salary of pounds 750,000 a year plus bonus and pension contribution if the company's shares stay below 180p. WPP shares closed yesterday at 122p.

Peter Brown, chairman of the Top Pay Research Unit, said the package was certainly bigger than "any known pay at publicly quoted companies in the UK".

During the sometimes chaotic extraordinary general meeting, Graham Stevens, chairman, told shareholders that Mr Sorrell would have to "treble the company's value in order to hit the jackpot", a feat he said was "very unlikely".

He defended the package as being consistent with remuneration offered US-based chief executives of international competitors such as Omnicom.

A handful of small shareholders rose to criticise the package, with one saying it was reminiscent of the "corporate greed of the 1980s".

Pirc, the investor advisory service, was also critical of the plan, and called for a postponement of the meeting for at least 14 days to give shareholders a chance to consider the matter further.

Anne Simpson of Pirc argued that changes made to the package late last week, in the wake of criticisms from institutional investors, would take time to evaluate.

Mr Stevens said from the chair that proxy votes received in favour of Mr Sorrell's package would be voted against any motion to postpone the meeting, and said that he had enough votes to ensure defeat.

Ms Simpson told Mr Stevens, "You have left me no option but to abandon the motion."

In the end, the package was put to a show of hands, and was approved 36 to 3.

Pirc then called for a poll to be undertaken, in order to reveal the number of proxies lodged for and against the motion.

After hurried consultation with lawyers, Mr Stevens ordered the poll, while shareholders started to trickle out the door.

The final tally was 74 per cent in favour with 26 per cent against.