A major caucus of WPP Group shareholders is accelerating its campaign of protest at the pay and contractual terms enjoyed by chief executive Sir Martin Sorrell.
The Association of British Insurers, which speaks for some 20% of all UK shareholders, told The Times: “We have very serious concerns about Mr Sorrell’s contract – and have had for some time.”
[Whether its use of the plebeian ‘Mr’ is an expression of the ABI’s disapproval – or an unintentional oversight of Sorrell’s honorific ‘Sir’ – is not known.]
Either way, WPP’s canny ceo will continue to enjoy a package of benefits fit for royalty, his total remuneration in 2002 rising by eighty percent to nearly £1.6 million ($2.62m; €2.23m) – more than fifty times the median base salary of a newly qualified UK doctor.
Should Sir Martin abandon ship at any time, he is also is entitled to a £3 million payoff under the terms of his three-year rolling contract – justified, claims a WPP spokesperson, because of “Sir Martin’s personal investment in WPP”.
Meantime, the Blair administration is adopting its tried and tested cosmetic approach to ameliorate rising concern over so-called fat cat pay deals in general.
This poisoned chalice has been handed to trade and industry secretary Patricia Hewitt, no stranger to inflated salaries given her former employment as director of research at Andersen Consulting (rebranded Accenture after being tarnished by the Enron scandal).
She describes the recent glut of payoffs for executives who jumped or were pushed from failing companies as “insulting”. The government, Hewitt says, wants to ensure that boards “get directors’ contracts right in the first place”.
But the government also knows which side its bread is buttered. It opposes legislating to curb pay excesses, instead urging via a consultation document that company boards restrict payoffs, cut executives’ notice periods and reduce initial job contracts for directors to three years from five.
Data sourced from: Times Online (UK); additional content by WARC staff