WPP Group’s independent directors are on a collision course with leading shareholder groups after backing Sir Martin Sorrell’s remuneration package.

The agency giant’s non-executive board members have lent their unequivocal support to Sorrell’s three-year contract, which would see him paid two years’ salary if he were ousted from the group – twice the customary compensation for UK directors.

“All the details of Martin's current contract and remuneration package were approved not just by the board but also the company's shareholders,” declared Bud Morten, chairman of WPP’s compensation committee. “You cannot go back and retrade simply because some independent group decides in general that contracts should only be for 12 months.”

Such support raises the possibility of a showdown between directors and angry investors at WPP’s annual meeting next week. Sorrell’s pay package has been heavily criticised by the Association of British Insurers [WAMN: 05-Jun-03], while the National Association of Pension Funds is expected to call on shareholders to voice their disapproval.

Data sourced from: Telegraph.co.uk; additional content by WARC staff