WPP founder Sir Martin Sorrell has again defended his bumper pay package, saying shareholders had previously approved the advertising company’s incentive plans by a substantial margin.
Sorrell is likely to face anger from shareholders at the company’s annual meeting in June after collecting a share award of nearly £63m. In total, his remuneration for last year is estimated to reach £70m, one of the biggest pay cheques in British corporate history. Full details will be revealed in the company’s annual report on Friday.
Sorrell, 71, who started the company by taking a stake in Wire and Plastics Products in 1985 and built it into a global advertising powerhouse, argued that his remuneration reflected the success of WPP. “It’s really pay for performance over the long term, over 30-plus years,” he told the BBC’s Today programme.
Sorrell dismissed comparisons to retail tycoon Sir Philip Green, under fire for paying himself and his family millions in dividends as the value of high street chain BHS plummeted, as “specious”. The WPP chief said: “BHS has gone out of business. We are very much in business.”
Sorrell’s £70m remuneration is believed to be the second-largest ever granted to a FTSE 100 chief executive, behind only the £92m in shares and cash paid to Bart Becht while he was chief executive of Reckitt Benckiser in 2009.
“I’m not saying I’m worth it or not,” Sorrell said. “Shareholders will have a view … It’s a very democratic process.” He argued that the advertising firm’s incentive plans had been approved by investors by a margin of four or five to one, although he added: “Shareholders can change their minds, I accept that.”
Asked whether he was embarrassed by his pay package, he replied: “I’m not embarrassed about the growth of the company from two people in one room in Lincoln’s Inn Fields in 1985 to 190,000 people in 112 countries and a leadership position in our industry … a world leader that’s 50% bigger than its next competitor. I’m not embarrassed about that success.”
Sorrell has faced other pay revolts – in 2012, almost 60% of investors opposed the pay deals for WPP’s directors. This prompted the company to change the long-term bonus scheme, called Leap, to a less generous scheme that will come into force in 2018 and cap Sorrell’s pay at less than £20m, based on his existing salary.
Sorrell was speaking from New York, as figures from WPP showed a strong start to the year, reporting revenues of £3.1bn for the first quarter, up 3.2% on a like-for-like basis, with strong growth in the UK.
