More than one in three shareholders voted against the remuneration package awarded by WPP Group to chief executive Sir Martin Sorrell – and a further 11.8% at Monday’s annual meeting abstained.
The straw that broke the camel’s back is Sir Martin’s three-year rolling contract under the terms of which he would receive a sum roughly equivalent to the UK national debt should he ever be required to walk the plank.
Following the meeting, a WPP spokesman loftily conceded that shareholders’ concerns would be discussed by the group’s remuneration committee in August.
The committee automatically reviews Sir Martin’s contract every year and is understood to have maintained permanently cosy relations with the ceo over the issue of pay and severance terms. Few believe this likely to change despite shareholder sentiment and the wind of corporate governance.
Two major shareholder groups – the National Association of Pension Funds and the Association of British Insurers – have recommended that directors’ rolling contracts be limited to one year.
Sir Martin’s contract has come under especial scrutiny because in 2003 he could receive a tranche of shares currently worth around £65 million ($107.52m; €93.21m).
Data sourced from: Times Online (UK); additional content by WARC staff