Shareholders lash out at WPP annual general meeting

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At its annual meeting in London Wednesday, WPP leadership was faced with tough questions from shareholders about whether ex-chief executive Martin Sorrell should receive his long-term incentive plan given his controversial exit from the company — particularly considering recent allegations that he used company funds for a prostitute.

WPP released proxy vote results at the beginning of the meeting, which indicated about 27 percent opposed the company's compensation report, not including abstentions. That compensation report includes a long-term incentive plan entitlement for Sorrell, outlined in a contract from 2008.

The full results of the vote are expected in a stock exchange announcement "as soon as practically possible," executive chairman Roberto Quarta said at the end of the meeting.

Quarta began the packed meeting in London's Southbank Centre by attempting to head off Sorrell questions at the outset, saying nothing further could be "legally disclosed" about why Sorrell left the company.

"The contract was at-will and required Martin to be treated as having retired unless a definition of gross misconduct could be satisfied — which it could not — and on which the board had clear legal advice," Quarta said.

He continued: "I appreciate that some will find this unsatisfactory."

WPP general meeting
WPP general meeting Credit: Alexandra Jardine

During the question-and-answer period, one shareholder pointed out that without further information shareholders would not be able to assess whether a termination package is appropriate. Another asked why Sorrell's intention to start his own advertising company didn't constitute "gross misconduct" in and of itself.

WPP leaders cited Sorrell's claim that he didn't see himself as competition (In a recent interview in Montreal, Sorrell reportedly said "I can't believe that a $20 billion company would be worried about a peanut. No offense to peanut farmers.")

One dissenter did criticize WPP for not giving tribute to Sorrell "for the work he has done for this company over many decades," receiving light applause.

Quarta tried to give the last word on the circumstances surrounding Sorrell's departure, saying the company treated him just as any other employee would have been treated, and said the matter was financially wholly immaterial to WPP.

"We understand why some would like the company to disclose or confirm further details of the allegation," he said. But he said the company was legally advised that data protection laws prohibit them from disclosing more. "I know that question remains, but there is really and simply nothing further we can legally disclose."

He also touched on allegations about Sorrell's treatment of employees, discussed in a recent Financial Times report in which an anonymous executive said Sorrell's treatment of assistants was "brutal and inhuman."

"I want to make it clear that at WPP as in any other workplace everyone is entitled to be treated with respect," Quarta said. He said employees should feel able to raise concerns and have them listened to and acted on, and said the company would "redouble efforts" to make sure employees were aware of a helpline they could use to raise issues on a confidential basis.

Though issues around Sorrell took a front seat in the meeting, executives also discussed future plans. Mark Read, co-chief operating officer, who admitted it had been an "eventful" few weeks, announced WPP's intention to rid itself of a word it has used to describe collaboration across the network.

"I think we can retire the word horizontality, but each of our clients want to access all the wealth of talent inside WPP and we have to make it easier for them to do that," he said. "To get rid of the silos and organizational barriers and encourage people to work together."

One shareholder asked about the abrupt change and what WPP intended to replace it with. Read said the company was ditching the word because it wasn't well-understood by its people.

"We are in no way ditching the concept of working together across the business helping our clients find seamless solutions… That is what we hear from clients, clearly we need to collaborate more," he said.

Outside, shareholders were waylaid by cameramen eager for their views on Sorrell. However, one private shareholder anonymously told Ad Age: " I don't care what he's done -- as long as he didn't use company money to do it."

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