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LONDON (Alliance News) - The UK Individual Shareholders Society is advising its members to vote against the WPP PLC Chief Executive Officer Martin Sorrell's pay package at the company's upcoming annual general meeting June 9.
In a statement, ShareSoc said that Sorrell's remuneration is "far too high", noting he was paid GBP70 million for 2015 and has netted GBP191 million since 2009.
On top of that, Sorrell has 1.8 million unvested share awards that would be worth GBP78 million at the company's current share price, he owns GBP734 million in WPP shares, and has received GBP18 million in dividends or equivalents in 2015.
With these incentives in place it is "unnecessary to give him any more", the society said.
ShareSoc Director and remuneration spokesman Cliff Weight estimates Sorrell has been paid GBP300 million since being appointed chief executive officer.
"In my view, it should be significantly less than half this amount - that would be much more reasonable and certainly more than adequate," Weight said in a statement.
"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," Weight added.
Sorrell's pay package has been a source of backlash in the past, with nearly 60% of shareholders voting against his remuneration package in 2012. After this revolt the company consulted with shareholders, and took steps to cut Sorrell's base salary and pension, and whilst that seems to have quelled some shareholders opposition there are still a portion who are unhappy.
At the company's last annual general meeting 20% of shareholders voted against WPP's remuneration report.
Whilst Sorrell's base salary for 2015 remained at GBP1.15 million, as a result of a jump in long-term incentives, his overall pay package will jump over 60% to GBP70.4 million for 2015, compared to GBP42.7 million in 2014, making him the highest paid chief executive in the FTSE 100 by a significant margin.
WPP's Compensation Committee Chair John Hood acknowledged the controversy surrounding Sorrell's pay package, noting in WPP's annual report that he expects "share owner and media focus in 2016 to be on the total compensation for Martin Sorrell", but defended that this pay is driven by the "outstanding performance of the company over the last five years relative to our peers".
Much of the jump in pay comes from the vesting of awards made in 2011 based on the company's performance in the past five years. In this time WPP more than doubled its market capitalisation, saw a 31% rise in revenue and delivered a compound annual growth in its dividend of over 20%, all reasons Hood set out to defend Sorrell's pay.
"While the value of Sir Martin Sorrell's award is very large, it was the result of an outstanding set of returns to share owners," Hood said in the report.
Whilst WPP is no stranger to criticism over its executive pay, 2016 has already seen a number of other major companies facing shareholder revolts, including Shire PLC, Smith & Nephew PLC, The Restaurant Group PLC, Regus PLC, Standard Life PLC, Man Group PLC, Ladbrokes PLC and Anglo American PLC.
Notably, industrial valve and pumps maker Weir Group PLC saw 72% of its shareholders vote against its remuneration policy, and 59% of BP PLC shareholders voted against a 20% pay rise for Chief Executive Bob Dudley last month.
Shares in WPP were down 0.5% at 1,580.00 pence Wednesday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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