ShareSoc Advises Investors to Vote Against WPP Plc Remuneration

PRESS RELEASE 79 18/05/2016

ShareSoc (the UK Individual Shareholders Society) is advising its Members to vote against the Remuneration Report resolution at the forthcoming Annual General Meeting of WPP in June 2016. WPP’s share price has performed well in in recent years. However, ShareSoc consider:

  • The remuneration of the CEO Sir Martin Sorrell is far too high (£70 million in 2015 and £191 million since 2009), and particularly so considering:

 his potential future equity incentives (his unvested 1.8 million share awards would be worth £78 million at today’s share price if they all vested). 

 Sir Martin owns £734 million of WPP shares (including shares from vested share incentive schemes).

 Sir Martin also received £18 million dividends or equivalents in 2015.

  • With these existing incentives, it is unnecessary to give him any more.

Commentary

Although Sir Martin claims that WPP has performed well in recent years, nevertheless the quantum of remuneration is too high. Sir Martin received £70 million in 2015, £191 million since 2009. He is estimated, by ShareSoc Director and remuneration spokesman Cliff Weight, to have been paid £300 million since he was appointed CEO. Cliff Weight commented “In my view, it should be significantly less than half this amount – that would be much more reasonable and certainly more than adequate.

It is yet another example of remuneration creep – remuneration creep has been criticised just recently by the Investment Association working party interim report. For example, Sir Martin received £1.5 million of dividend equivalent payments; and £460,000 of pension contributions, even though he is 71 and well past the normal retirement age.

He has an annual bonus maximum opportunity of 435% of salary and a long term incentive annual award of 974% of salary. Sir Martin owns £734 million of WPP shares (including shares from vested share incentive schemes), based on the recent £16.11 share price. Cliff Weight commented “In view of his shareholdings and existing incentive awards, I don’t see why he needs to be given any more incentives. I don’t think it will make him work any harder.

For further information, please contact:

Roger Lawson

Deputy Chairman, ShareSoc

Telephone: 020-8295-0378  

 

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