Despite the rising antagonism worldwide to excessive executive payments, WPP Group this week defended the mega-perks that continue to be enjoyed by its chief executive, Sir Martin Sorrell.
Not only does Sir Martin remain on a three-year rolling contract (compared with the twelve months recommended by the corporate governance code), he saw his total remuneration in 2002 rise by eighty percent to nearly £1.6 million ($2.62m; €2.23m) – fifty-one times the base salary of a US registered nurse.
According to the group’s annual report, WPP’s compensation committee agreed with Sir Martin’s L’Oréal-inspired credo: “Because I’m worth it!”
And despite the stated belief of committee chairman, former US investment banker Stanley Morton, that a twelve month contract should be the norm for executive directors, the committee unanimously agreed to except Sir Martin from the rules applying to lesser mortals.
Such largesse marks the committee’s appreciation of Sorrell’s investments made under WPP's leadership equity acquisition plan, plus other commitments including non-compete covenants.
£350,000-worth of warm appreciation was also extended to new WPP director Beth Axelrod, who toils under the arcane appellation ‘director of talent’. This pittance was supplemented by a ‘golden hello’ of restricted shares to the value of $314,330.
And now for the bad news.
WPP Group reported a 50% plunge in pre-tax profits to £205.5m after goodwill write-downs and other charges. Shorn of these exceptionals, headline pre-tax profits sagged 19% from £489.8m to £400.6m.
Data sourced from: Financial Times; additional content by WARC staff