By Rupert Steiner IN DUBLIN
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Senior executives at WPP are to embark on an urgent round of meetings with investors as shareholders railed against the firm’s pay report in the biggest FTSE 100 rebellion for a decade.
Investors followed through on a threat to give boss Sir Martin Sorrell ‘a bloody nose’ as the world’s biggest advertising group was the latest casualty of the so-called Shareholder Spring.
Around 60 per cent of investors refused to support WPP’s remuneration report, which proposed a near £13million package for the advertising chief.
Not a great advert for austerity: Sorrell is the latest in a line of big bosses snubbed by shareholders
This included a 30 per cent salary hike as well as a £2million cash bonus and bonus shares worth £3million that will pay out in two years’ time.
A raft of senior executives also received sizeable votes against their re-election to the board.
More than 15 per cent of investors refused to back chairman Philip Lader, with 25 per cent giving the thumbs down to Jeffrey Rosen, who heads WPP’s pay committee. Non-executive directors, including former Reckitt Benckiser finance chief Colin Day, and executive directors Ruigang Li, and Koichiro Naganuma, also received sizeable votes against their re-election.
The company claimed this was mainly due to their poor attendance at meetings.
Former White House deputy chief of staff Lader, who has been at the helm of WPP (down 15p at 753p) for 11 years, appeared to be in denial over the biggest pay revolt by shareholders since rules were changed in 2002 to give investors a vote.
He said: ‘We appreciate the support in re-election of all directors.’ However he did concede: ‘We take seriously the vote on the remuneration report. We will consult with shareholders and move forward with the best interests of the shareowners and our business.’ He refused to say whether he would adjust Sorrell’s pay following the consultation, and Sorrell indicated he was not considering his position, pointing to 98 per cent of investors backing his re-election.
Sorrell was unapologetic saying: ‘It’s a democracy and the shareholders have spoken, it’s their right. I am disappointed.’
He had previously made an extraordinary defence of his pay. But yesterday investors hit back. Guy Jubb, of Standard Life Investments, which holds just under 2 per cent of WPP shares, said: ‘The message was unambiguous and cannot be ignored.’
One City fund manager said: ‘The board made a serious error of judgment here, not least in disregarding the clear concerns shareholders have had. The message is unambiguous â€" come back down to earth and sort it!’
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If the share price had doubled every year for a decade, and paid a dividend yield keeping up with 10% all that time, then he might be justified in attempting to pay himself that much. Does this mean that unlike Bob Diamond, he now won't actually be getting this package, or is it about 60% of shareholders voted him down, but those 60% only hold less than 50% of the company, so the few institutional firms carry in his favour as was the case with Barclays? One holding should be One Vote. You don't get umpteen votes in a general election because you live in a better house, drive a better car, or have a better job do you? Emasculate the institutional investors the way Thatcher emasculated the Unions! PLC's would have to serve the shareholder at all times if this were the case, not rely on a bit of corporate hospitality for a few major-holding firms to swing their block vote as is the case at the moment.
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Soup kitchens in Greece. Double dip in UK. Spain, Portugual, Italy, USA in debt crises and we the people/investor are justifying sky rocket pay pay packet when all these CEO are massively under performing? It is time the investors took a "guillotine" to the shareholders meeting, lets see if the CEO justifying his outrageous pay packet then.
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I mean...really...how much does this greedy pig need? Has he cured cancer? is he god? has he solved the worlds problems? No no and no. You can live a nice lifestyle if youre lucky to be on 50k per year...let alone 6,7 million plus. And they wonder why people wont work for 6 pounds and hour....derrrr i wonder why?
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