PARIS--WPP PLC Chief executive Martin Sorrell was paid close to
GBP30 million, or about $50 million, for last year, a record sum, a
year after the advertising company cut his base salary and scrapped
a controversial bonus plan in a bid to appease investor
outrage.
Mr. Sorrell's total pay package rose 70% to GBP29.85 million in
2013 from GBP17.54 million the previous year, boosted by a
long-term bonus program that has since been replaced with a new
plan, according to the group's annual report released
Wednesday.
WPP said the payout is linked mainly to the group's share price
performance and shareholder return. Shares in the ad-agency holding
company rose 243% between Jan. 1, 2009 and Dec. 31, 2013, while
total shareholder return rose 241%, the group said in the
report.
Mr. Sorrell's compensation has been the subject of outrage in
past years. In 2012, more than half of WPP shareholders voted
against his pay for 2011, which was up 60% on the prior year to
GBP6.77 million.
WPP then took steps to appease shareholders and consulted with
investors on how to change its pay plan. Last year, the company
decided to lower Mr. Sorrell's base salary for 2013 by GBP150,000
and changed its long-term bonus plan dubbed LEAP, which had been at
the heart of investor concern, to bring down maximum payouts.
"While the level of vesting will undoubtedly attract public
attention, the close relationship between WPP's pay and performance
is again demonstrated by the considerable value that has been
created for share owners during that period," noted Jeffrey Rosen,
chairman of WPP's compensation committee in a letter to
shareholders released as part of the annual report.
The old bonus system hasn't yet phased out completely. Three
more five-year periods under the program eventually end in 2016,
when the new long-term bonus plan will replace the old one, said a
WPP spokesman.
Shareholders appeared appeased with the changes last year as
more than 80% of shareholders approved Mr. Sorrell's pay package
for 2012, which had surged to over GBP17 million. Some 99.98% also
approved the reelection of Mr. Sorrell as CEO.
Still, some shareholders considered the changes didn't go far
enough. The Local Authority Pension Fund Forum, which controls
between 1% and 2% of WPP, had recommended its members to oppose the
2012 remuneration report and the new long-term incentive plan,
calling the payments or potential future payments "excessive."
No one at the LAPFF was immediately available to comment on Mr.
Sorrell's latest pay package.
(Correction: This item was correct to show that Martin Sorrell
was paid GBP29.85 million in 2013 from GBP17.54 million the
previous year. The original incorrectly stated the figures in
billions.)
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