In a special meeting in London today,
Opposition to the plan
The proposal had run into opposition from the Association of British Insurers, the U.K.'s National Association of Pension Funds, and Pension Investment Research Consultants, an advisory services firm handling proxies for U.K. institutions. Additionally, one shareholder, Legal & General Group, unsuccessfully requested that WPP hold a separate vote on the incentive for Mr. Sorrell.
The groups had been only partly satisfied by a revision to the plan, eliminating a "relevance factor" that adjusted the rival companies' results before comparison, which shareholder groups argued made it easier to beat the performance targets.
5-to-1 share offerings
The plan would grant executives up to five shares of WPP stock for each share they own, if the company meets targets based on its shareholder return against 14 other companies. The plan is composed of a series of staggered five-year plans covering 2004 through 2013, with a top share match of four-to-one in the first year.
According to the plan, Mr. Sorrell's participation is capped at $18 million in WPP stock, of which he would commit $10 million in 2004, at the four-to-one match, then another $8 million over the next four years at five-to-one. The other executives are allowed to commit stock worth up to 400% of their combined annual salary and bonus figure.
Sorrell's $80 million
Mr. Sorrell would receive $80 million if WPP were to meet all its targets -- an unlikely event, since it reached 60% of the target in the last five-year plan, which covered the boom years of 1999 and 2000. Given the staggered five-year plan structure, his payout would be just under $9 million annually over the next nine years.
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