'Underperforming' WPP Likely to Lop Sir Martin's Bonus

08 June 2006

WPP Group ceo Sir Martin Sorrell, famed for his caution in matters financial, might today be pondering the wisdom of the personal bonus scheme he pushed through WPP's 2004 annual meeting - despite opposition from 22% of the group's shareholders.

The scheme, which could see Sir Martin and eighteen other executives share £112.5 million ($209.3m; €163.2m) over a five-year period, is tied to the share-price performance of WPP compared with eleven comparable enterprises.

In order to participate, Sorrell and his team have to invest a total of $30m of their own assets in cash and shares. Sorrell himself stands to gain up to £44m if WPP hits the target it has set.

However, the group's annual report published Tuesday reveals that during years one and two of the scheme, WPP's total shareholder return has been below the average of the eleven chosen advertising, marketing and research comparators. They are ...

  • Aegis
  • Arbitron
  • Dentsu
  • Gfk
  • Havas
  • Interpublic
  • Ipsos
  • Omnicom
  • Publicis
  • Taylor Nelson Sofres
  • VNU.
Unless the next three years see a marked improvement in WPP's share price performance (or Aegis is dismembered by Vincent Bolloré), Sorrell and his team might find online poker a more viable earnings option.

Data sourced from The Times Online (UK); additional content by WARC staff