WPP Stockholders Urged to Vote Against Sorrell Bonus Package

Plan Could Net Chief Executive Up to $95 Million Over Five Years

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LONDON (AdAge.com) -- Britain's leading corporate governance consultancy has urged WPP shareholders to vote against a plan that could see Chief Executive Martin Sorrell take home $95 million in bonuses in the next five years.

Martin Sorrell
Martin Sorrell Credit: Newscom
WPP executives who invest in company shares stand to gain up to five times as many free shares if WPP hits certain targets and performs in the top 10% of its sector.

A WPP spokesman pointed out that the bonus scheme is even more aligned to shareholders' interests than its predecessor because of extremely demanding performance targets. He also said that unlike many other schemes, WPP executives have to take a financial risk to gain the rewards, just like any other investor.

WPP would have to outperform 90% of its competitors, compared with 75% under the previous scheme. There is also a weighting element, with a greater emphasis on outperforming certain groups -- Omnicom in particular -- in order to reap maximum rewards.

The Pensions and Investments Research Consultants issued a statement saying: "Although we consider the maximum target set to be stretching, we have concerns that the potential awards to be excessive under the scheme on a stand-alone basis and also taking the overall potential reward under all schemes under operation. We therefore recommend shareholders vote against the scheme."

WPP shareholders will have a chance to vote on the bonus scheme at the company's annual meeting in Dublin on June 2. It will be the first annual meeting to be held in Ireland since the company moved its base there for tax reasons last year.

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