Sir Martin Sorrell, the longstanding chief executive of advertising company WPP, received £70.4m in cash and shares last year in one of the biggest pay deals in UK corporate history.
Estimates of his 2015 pay deal have been made since the disclosure last month that Sorrell received nearly £63m in share awards. The advertising company’s annual report on Friday showed that a £4.2m annual bonus and other payments had pushed the total to £70.4m.
“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,” said Sir John Hood, chairman of the WPP compensation committee.
Sorrell’s pay deal – which means he has received £190m since 2009 – is being announced at a time of renewed shareholder focus on executive pay, with two FTSE 100 firms – BP and Smith & Nephew – receiving “no” votes for the pay deals.
His figure for 2015 includes a £47,000 allowance for accommodation when he stays in his own home in New York.
Sorrell founded WPP in 1985 when he borrowed £250,000 to buy a stake in shopping basket maker Wire & Plastic Products. Through a series of acquisitions it is now the world’s biggest marketing and advertising group and an acquisitions machine, combining advertising agencies such as JWT and Ogilvy & Mather with PR companies including Finsbury and Hill & Knowlton.
Robert Quarta, WPP’s chairman, tackled the issue of when Sorrell, 71, might step aside. “At some point we all leave our jobs. The question is when. Whether, in Sir Martin’s case, that happens tomorrow, in one, two, three, four or five years, or even over a longer period, we have already begun to identify internal and external candidates who should be considered.
“Since joining your board, I have seen firsthand a rigorous and comprehensive process, where independent members of the board and the chairman regularly meet not just those who report directly to Sir Martin, but also the senior tier below,” said Quarta, in his first report to shareholders since becoming chairman.
“Share owners should have no doubt that we already have a strong pool of internal and external candidates to draw from,” said Quarta.
Sorrell’s pay is based on share awards dating back to 2010 when the share price was 644p. Since then the shares have risen to more than £15. Sorrell’s total pay is 1,444 the average of the 124,930 employed by WPP. His salary is 31 times the average.
Sorrell payouts derive from a scheme known as the Leap – the leadership equity acquisition plan - will has only one more year to run after a shareholder revolt in 2012 replaced it with a new scheme, called the executive performance share plan. At current share prices, the shares locked inside the Leap are worth more than £20m.
