Sorrell set to collect another share windfall

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The Independent Online
Martin Sorrell, chief executive of advertising giant WPP, is in line to scoop another share bonanza on Monday, worth pounds 3.2m at last night's closing price, under a reward scheme that could net him pounds 25m over five years. The issue of 1.2 million free shares, which Mr Sorrell must keep until September 1999, will represent the second of up to four bumper payouts that he will receive if WPP hits certain performance targets.

Mr Sorrell will collect his latest windfall because WPP's share price has been above 230p for 60 consecutive trading days. Last September Mr Sorrell picked up his first tranche of 1.2 million shares after WPP's shares stayed above a 198p trigger price for the same period. He could qualify for a third share bonus as early as June because another 60-day clock started ticking on Thursday when WPP's shares went back above a new trigger price of 265p. Last night WPP closed 3.5p lower at 272.5p, valuing the company at just over pounds 2bn.

However analysts said a third payout was not imminent. "The market will make sure he only gets one lot of shares each year, just to ensure he keeps performing," said one broker.

At the time the share incentive scheme was approved two years ago WPP's remuneration committee said the conditions attached would be "nearly impossible" to achieve.

Mr Sorrell, who has invested more than pounds 2m of his own money in WPP's shares, also has salary benefits, bonuses and previously awarded share options that could push his five- year total to pounds 25m, of which pounds 14m will be in free shares.

Some institutional investors have criticised the package as appearing to reward Mr Sorrell for merely returning WPP's shares to the level they were at when he joined the company in 1985. WPP's share price peaked at over 900p in 1987 before collapsing to just 27p five years later.

But a series of financial restructurings allowed WPP to stage a recovery and last year it reported pre-tax profits of pounds 153.3m compared to just pounds 8m in 1992.

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