Shareholder revolt over WPP chief's £70m pay package grows
WPP boss Sir Martin Sorrell has been dealt a further blow after another shareholder advisory group urged the advertising giant's investors to vote against his £70 million pay deal at its annual meeting on Wednesday.
The Local Authority Pension Fund Forum (LAPFF) said it was against the "excessive payments offered to Sir Martin Sorrell, WPP's chief executive, which have been consistently increasing".
The LAPFF said Sir Martin's variable pay is more than 58 times his £1.15 million salary. The award would make the advertising boss the best paid chief executive in the FTSE 100.
The body 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.
The LAPFF is an association of 70 UK public sector pension funds with combined assets of approximately £175 billion.
LAPFF chairman Kieran Quinn said: "Most shareholders will, in the main, accept what they consider a reasonable level of pay for performance.
"However, with WPP, we consider there are several aspects of the payment which do not reflect this, and we are advising our member funds to oppose the remuneration report on this basis."
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, has also recommended shareholders vote down the report in protest.
It states: "We are concerned that the level of pay being awarded on an ongoing basis represents an inappropriate cost to the company and shareholders."
The vote will be closely watched, 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.
Sir Martin himself was embroiled in the so-called shareholder spring of 2012, which saw nearly 60% of WPP investors reject his £6.8 million pay packet.
Asked if he feared another rebellion ahead of this year's AGM, Sir Martin told the Press Association in April: "We have shareholder votes every year. It is what it is. Shareholders will decide. It's very democratic. We're always engaged with shareholders with anything and everything."
Sir Martin went on to defend his pay package, saying "if WPP does well, I do well".
It comes after WPP posted a 2.8% rise in full-year pre-tax profits to £1.49 billion.
The firm has received support from some quarters, with advisory group Institutional Shareholder Services (ISS) backing his pay deal last month, saying shareholders should approve WPP's remuneration report.
ISS said: "The quantum of the realised awards, while exceptional, is the output of a scheme which was approved by the vast majority of shareholders in 2009, and reflects the company's strong performance over the previous five years."