Ad Agency WPP's CEO Sees Drop in Annual Pay

By Nick Kostov 

The flagging performance of WPP PLC, the world's biggest ad agency, is eating into the pay of one of the industry's best paid executives.

On Wednesday, WPP disclosed that Chief Executive Martin Sorrell received 10 million pounds ($13.9 million) in company shares as compensation for 2017, a significant drop from the GBP41.6 million in shares that Mr. Sorrell was awarded a year prior.

The payment is the first time Mr. Sorrell has been compensated under a five-year remuneration scheme that began in 2013 when WPP's board instated a cap on his pay in response to investor anger over executive salaries. The program, which is linked to company financial targets and share-price performance, rewarded Mr. Sorrell 73% of the total shares he would have received if the executive had hit all of his targets.

Shares in WPP, which owns ad agencies such as Grey and Ogilvy & Mather, rose 51% over the five-year period, the company said, outpacing the broader FTSE 100 index that rose 30% during that period.

Over the past year, however, WPP's share price has dropped by almost a third as Mr. Sorrell has wrestled with the loss of lucrative accounts. Consumer-goods giants and other companies are redirecting spending they once lavished on ad agency-led campaigns. Earlier this month, WPP shares dropped sharply after it logged its worst annual performance since the financial crisis and forecast no growth for 2018.

Mr. Sorrell's total pay package -- including his salary, a short-term bonus, pension payments and other benefits -- won't be known until WPP publishes its annual report next month.

Under WPP's previous incentive program, Mr. Sorrell received almost GBP210 million in compensation between 2012 and 2016, leading to run-ins with investors who argued the amount was exorbitant.

Write to Nick Kostov at [e-mail]

(END) Dow Jones Newswires

March 14, 2018 13:34 ET (17:34 GMT)

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