Sir Martin Sorrell's personal bonus scheme is under renewed scrutiny after it emerged WPP Group rejected calls for a shareholder vote on the subject.
The agency giant has faced calls from several institutional shareholder groups to alter its controversial five-year remuneration package for top executives. Last week it bowed to this pressure, agreeing to revise the scheme and postponing the extraordinary general meeting at which shareholders will vote on it [WAMN: 02-Apr-04].
Under the proposals, senior executives use their own cash to buy shares in the group, then receive rewards according to WPP's performance relative to its nearest rivals. If all goes well, they will share £112.5 million ($204.4m; €169.5m) between them, with Sorrell taking £44m.
The latter payment is of particular concern to some investors. It has emerged that financial services giant Legal & General asked WPP to put Sorrell's personal remuneration package up for a separate vote (though it is unclear whether this request was made before or after WPP agreed to revisions).
Although Legal & General's demand was rebuffed, it highlights the sense of unease among some investors at the huge payout on offer.
The Association of British Insurers -- one of the investment groups to come out against the bonus scheme late last week -- said voting on Sorrell's share options separately was a "new issue" that it would raise with its members.
Data sourced from: Financial Times; additional content by WARC staff