Over one third of WPP shareholders have failed to back Sir Martin Sorrell’s controversial £70m pay package at the network’s annual general meeting today (8 June).
While it was anticipated that the bumper pay deal would court revolt among investors at the event, over 33.5 per cent (excluding abstentions) have failed to back the salary – an uptick on the 22 per cent who voted against a similar deal last year which saw Sorrell pocket £43m.
Estimates of Sorrell’s take home wage for 2015 first emerged in March when the leader collected a share award of £62.78m, which when coupled with his salary and annual bonus has brought the total amount to £70.4m.
The amount is believed to be the second-largest granted to a FTSE 100 chief executive, with the most expensive being a £92m share sum which was given to Reckitt Benckiser chief executive Bart Becht in 2009.
Speaking earlier this year, the WPP boss said he would make no apology for his pay on the grounds that it was “geared to the success of the company”.
“I continue to hold in the company, so every time the company does well, I benefit. And of course, a large number of other people – because I’m not the only one involved in these plans – and every time we do badly, we all suffer,” he added.
Just last week, investor advisory group Piric issued a statement advising investors to vote against Sorrell’s pay – saying that the difference between his salary and the average WPP employee was “highly excessive”. It noted that the sum included variable pay that up to 58-times his base salary, a figure that it said exceeded “an acceptable” ratio of 200 per cent of salary.
WPP Shareholder Hermes has spoken out against the compensation, with co-head Hans-Christoph Hirt asserting: “Even considering the strong performance and pay practices at peers, the legacy equity incentive plan introduced in 2009 has once again led to what we regard as an excessive level of chief executive remuneration for 2015.”
The news comes as chief executive are increasingly scrutinised for their high salaries. In April, BP shareholders voted against chief executive Bob Dudley’s £14m takeaway following the company’s record annual loss.
Sorrell’s pay is likely to fall next year in light of a new WPP policy which will cap the maximum value of shares allotted to him at £11.2m.