Third of shareholders rebel over WPP chief Sir Martin Sorrell's £70m pay deal


Advertising giant WPP has suffered a shareholder rebellion over boss Sir Martin Sorrell's mammoth £70 million pay deal after a third of investors voted against the group's executive pay plans.

WPP saw 33.4% of investor votes cast against its remuneration report ahead of the firm's annual general meeting (AGM) in London amid concerns over Sir Martin's controversial pay package, which has been branded "excessive" and "unacceptable".

Including votes that were withheld, more than 34% of shareholders failed to back the group's pay policy for top bosses, although the final vote count is due later today.

A raft of shareholder groups and major investors in the firm have hit out at Sir Martin's pay for 2015, which includes a £1.15 million base salary and £62.8 million in shares from a long-term incentive plan - making him the best paid chief executive in the FTSE 100.

While the group narrowly survived the vote at its AGM, with 66.6% backing the remuneration report, it marks its second major revolt over pay in four years.

Sir Martin was embroiled in the so-called shareholder spring of 2012, which saw nearly 60% of WPP investors reject his £6.8 million pay packet.

The Local Authority Pension Fund Forum (LAPFF) said ahead of Wednesday's AGM it was against the "excessive payments offered to Sir Martin Sorrell".

The LAPFF - an association of 70 UK public sector pension funds with combined assets of approximately £175 billion - said Sir Martin's variable pay is more than 58 times his £1.15 million salary.

It added that the WPP head has seen his pay jump by 56% a year over the last five years, almost twice the year-on-year 28.8% average increase in total shareholder returns at the firm over the same period.

Shareholder lobby group Pirc has also called Sir Martin's proposed pay "unacceptable" and urged shareholders to vote against it.

Another influential advisory group, Glass Lewis, had likewise recommended shareholders vote down the report in protest.

But Sir Martin has recently sought to defend his pay, telling the Press Association in April "if WPP does well, I do well".

His hefty pay deal comes after WPP posted a 2.8% rise in full-year pre-tax profits to £1.49 billion.

The vote has been highly anticipated, coming amid a period of increasing tension between investors and boards over pay.

BP faced a humiliating shareholder rebellion over executive pay in April, when almost 60% of BP shareholders rejected the oil giant's remuneration report, which awarded boss Bob Dudley £13.8 million.

WPP said recent UK trading had slowed, possibly as a result of Brexit fears, and reiterated warnings over the impact of a vote to quit the EU at the upcoming referendum. 

Sir Martin told shareholders at the AGM that a Brexit vote would have a "serious impact" on the prospects of the company in Europe.

He said: "Our biggest markets are western continental Europe. If Britain was to leave the EU that would have a serious impact on our markets.

"Obviously we have plans to deal with it, but it would have a serious impact, we think, certainly in the short to medium term, on the prospects of the company in the western continent."

WPP chairman Roberto Quarta asked if Britain was "sleepwalking into a black hole", given recent poll results showing gains for the Brexit campaign.

The group said UK like-for-like revenues growth in the first four months of the year had slowed to 3.2%, down from 4.7% in the first quarter.

Mr Quarta cautioned that, while there were "good prospects for the rest of the year", "2016 looks to be another demanding year".