WPP Chief Sorrell to Receive Multi-Million Pay Package Despite Revolt--2nd Update

By Nick Kostov 

WPP PLC shareholders approved the pay package of Martin Sorrell after the advertising group's founder and chief executive faced another sizable revolt over his pay packet.

Mr. Sorrell's received GBP70.4 million ($102.4 million) in compensation in 2015, up 65% on last year, a sum that some shareholder advisory groups labelled "excessive" and "unacceptable" ahead of the meeting.

At Wednesday's meeting, 33.5% of investors voted against the pay package, excluding abstentions. Among most institutional shareholders of U.K.-listed companies, the default vote is traditionally cast in favor of management for remuneration reports. Abstentions can be viewed as a milder form of protest.

John Hood, the head of WPP's compensation committee, said in the company's annual report that "while the value of Sir Martin Sorrell's award is very large, it was the result of an outstanding set of returns to share owners." WPP's shares rose 16% in 2015.

Shareholder revolts over a number of issues, not least pay, have become more common in recent years. A majority of Smith & Nephew PLC and BP PLC investors, for instance, symbolically voted against their executive pay packages for 2015, while Shire PLC said investors holding 49% of votes opposed its board's remuneration report.

"There's a broadly held view--perhaps not quite reflected by the [WPP shareholders] vote--that this is an extraordinary amount of money to give to one person," said Stefan Stern, Director of the U.K.'s High Pay Centre, an independent think tank in London.

WPP said the size of Mr. Sorrell's pay was linked to the formulaic application of a long-term incentive scheme that WPP investors overwhelmingly backed in 2009.

Mr. Sorrell, who has led WPP for more than 30 years, received a base salary of GBP1.15 million for 2014. His pay packet also included a hefty long-term incentive stock award of GBP62.8 million and a GBP4.3 million short-term bonus, as well as pension contributions and other benefits.

In 2014. Mr. Sorrell paid back GBP274,000 which had been spent on travel expenses for his wife, according to the company's annual report. The company said it would no longer pays spousal travel costs, adding that this had caused shareholder angst last year.

Ahead of the vote, Pensions & Investment Research Consultants Ltd., a proxy adviser, told WPP shareholders to oppose Mr. Sorrell's pay, while Institutional Shareholder Services Inc. said shareholders should back it.

Separately, WPP said sakes trends had slowed slightly in April. Comparable net sales--which strips out currency changes, acquisitions and disposals--rose 3.1% in the first four months of the year, compared with 3.2% in the first quarter.

Ian Walker and Nathalie Tadena contributed to this article

Write to Nick Kostov at [e-mail]

(END) Dow Jones Newswires

June 08, 2016 09:39 ET (13:39 GMT)

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