For the second day running, the feature event here on Thursday was in the balance until its final moment as Unowhatimeanharry, the beaten favourite behind Nichols Canyon in the Stayers’ Hurdle at Cheltenham, turned around the form under a bold ride by Noel Fehily and held off his old rival by a head. Ruby Walsh threw everything into his finish […]
Sir Martin Sorrell received £48m in remuneration last year as WPP, the marketing and advertising company he founded and runs, moved to curb the level of his future payouts to avoid further clashes with investors.
Sorrell, who has been on the receiving end of a string of shareholder voting revolts at WPP’s annual meetings in recent years, received total pay, bonuses and incentive scheme payouts of £48.1m in 2016.
The figure is 31.6% lower than the £70.4m he received in 2015, one of the biggest pay deals in UK corporate history, which was opposed by one-third of WPP shareholders at last year’s AGM.
The payout, the last to be awarded under WPP’s controversial “Leap” scheme, means Sorrell has received about £210m in total remuneration since 2012.
WPP has introduced a less generous arrangement for Sorrell, which is expected to pay out £19m a year. It will be the subject of a binding vote at the company’s annual meeting in June.
However, WPP said on Friday that it intended to tighten the policy further with a potential payout band of £14.9m to £19.2m maximum this year. From 2018, that will fall to between £18m and £13m as dividend equivalent payments are scrapped.
The company has moved to stem further potential run-ins with investors at a time of renewed scrutiny of corporate Britain since the Brexit vote and the warning from Theresa May that she would curb boardroom excess.
WPP’s chairman, Robert Quarta, appointed at last year’s annual meeting, also said planning to identify the successor to Sorrell, 72, had intensified.
“Our succession planning process, which has always been rigorous, has become even more focused and detailed over the past year,” said Quarta, in WPP’s annual report published on Friday. “Whether it happens in the near or distant future, when Sir Martin leaves his role as chief executive, we will have an exceptional team of potential candidates on the bench.”
Sorrell shows no signs of slowing down, having celebrated the birth of another child on the day of the US presidential election last year. He has no plans to step aside and said, on the question of succession, that there is “nothing to see here”.
His pay has been a flashpoint in the past. In 2012, during what became known as the shareholder spring, nearly 60% of investors rejected his annual package for the previous year.
Last year, Sorrell defended his remuneration, arguing that he had put three decades of his life into turning WPP from a maker of wire baskets into a global marketing business worth £22bn.
“I’m not a Johnny-come-lately who picked a company up and turned it round [for a big payday],” he said. “If it was one five-year plan and we buggered off, fine [to criticise my pay]. Over those 31 years … I have taken a significant degree of risk. [WPP] is where my wealth is. It is long effort over a long period of time.”
The question of a successor has exercised investors in recent years, with Guy Jubb, the former head of governance at Standard Life Investments, using his final appearance at a WPP annual meeting in 2015 to criticise the apparent “Sorrellcentricity” at the company.
Quarta, writing in the annual report, said there is a list of internal and external candidates who could take over.
“As part of our continuous assessment of those individuals who might one day become chief executive of the group, we have invited a number of leaders within WPP companies to present to the board and attend board meetings,” he said. “This exercise gives me greater confidence than ever in the strength of our people and their potential to succeed at the very top.
“This internal pool is, of course, maintained alongside a constantly refined list of external candidates.”
Quarta said internal candidates include those who report directly to Sorrell, as well as “many who currently occupy the senior tier below”.