An extraordinary general meeting of WPP Group shareholders on Friday gave the green light to Sir Martin Sorrell's controversial pocket-lining scheme for the company's top executives -- the nattily named Leadership Equity Acquisition Plan.
But chief executive Sorrell had none too easy a ride, with twenty per cent of votes either opposing the plan or abstaining. Among the dissidents were insurance giant Legal & General and shareholder group PIRC (Pensions Investments Research Consultants). But to all intents, the opposition was mere gesture politics, with an overwhelming majority of 80% endorsing the scheme.
Sorrell was eager to justify the likely £113 million ($204.56m; €169.59m) pay bonanza: "It's really a company investment plan," he insisted, "not a 'heads I win, tails you lose' option programme where you can sell your options and reload. This is truly an entrepreneurial plan. People are taking a risk."
The plan allows for nineteen WPP executives to use their own money to buy shares. This will then be matched by the company with an award of up to five shares for every one bought, depending on how WPP performs against its peers.
WPP will be ranked alongside fourteen other comparable companies. Its executives will receive the 'five shares for one' bonus only if WPP ranks first or second in the league table, reducing to zero shares if WPP is lower than seventh.
Quoth the bright knight: "If I was at Omnicom, all I would have to do is breathe for three years. This scheme is about maintaining a competitive position in the industry."
Data sourced from: Telegraph.co.uk; additional content by WARC staff